DTN Weekly Distillers Grains Update

DDG Price Decline Slows as Corn Prices Rise

The significant declines in distillers dried grains prices seen in recent weeks seem to have slowed somewhat this week, as the corn board rose slightly.

The DTN weekly DDG spot price average fell another $4 per ton in the past week, from $142 per ton last week to $138 this week. This is the fourth consecutive week that the spot price average has decreased, falling $30 in that time period -- from $168 per ton in mid-June to $138 per ton this week. This is the lowest level the average has reached since early May. In each of the three weeks prior to this week, the average spot price fell between $6 and $12.

Of the 36 Midwestern locations DTN collects spot prices from, a total of 15 locations reported to DTN that their spot prices had decreased between $3 per ton and $15 per ton in the past week, although most price changes were in the $5 to $10 per ton range. Prices at 15 locations remained unchanged since last week, while only three locations increased prices $5 each.

Most merchandisers told DTN that with corn prices rising too much and too fast, followed by prices falling too much and too fast, this week's slowdown in the DDG price decreases is likely just a market correction, trying to find a bottom as far as prices are concerned. The slowdown may also be from ethanol plants attempting to realign their prices with the changing market.

The corn board increase this week causing DDG prices to slow their price decline, since DDG prices tend to mirror movement in corn, bean and meal prices, as all compete for places in livestock rations. Some merchandisers, however, thought that DDG prices may experience a little uptick in reaction to corn prices in coming days, bringing a little firmer numbers.

Domestic demand has been steady. The market has not seen a lot of new demand on the export side.

There has been some Chinese DDG purchasing, but merchandisers told DTN that Chinese buyers are only purchasing about a month out in case the country's anti-dumping DDG investigation against the U.S. ends with tariffs being instituted on DDG exports to China.

There is some talk that a big meeting is being held in early August and that a decision on the investigation and possible tariffs will be announced following that meeting.

The value of DDG relative to corn this week fell substantially, from about 119% last week to about 107% this week. This gives DDG a much better value and is the lowest percentage since mid-June. The value of DDG relative to soybean meal fell only slightly in the past week, from about 38% last week to about 36% this week.

The cost per unit of protein for DDG was about $5.52 this week, down slightly from $5.68 last week. The cost per unit of protein for soybean meal rose slightly, from about $7.79 last week to about $8.03 this week.

Cheryl Anderson can be reached at cheryl.anderson@dtn.com

Follow Cheryl Anderson on Twitter @CherylADTN

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NEWS IN BRIEF

Ethanol Exports Fall, While DDGS Exports Grow

During the month of May, exports of U.S. ethanol fell to 55.7 million gallons, a 42% drop from April and a nine-month low. However, exports of U.S. distillers dried grains with solubles saw a substantial increase, according to an article on the Refined Fuels Association website (http://bit.ly/…).

The RFA reports that monthly ethanol exports have only fallen twice in the past two years.

Exports of DDGS increased for the third month in a row, rising 20% to 1.06 million metric tons. RFA credits the majority of that growth to export volumes to China nearly doubling from April to May. In fact, in May, China imported nearly 292,000 metric tons of DDGS in May, approximately 27% of total exports.

Exports of DDGS also increased in May to Mexico, who purchased 158,702 metric tons. Approximately half of the remaining DDGS exports were sent to 29 countries, with the largest buyers being Vietnam, South Korea, Thailand and Canada.

Cheryl Anderson can be reached at cheryl.anderson@dtn.com.

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DTN WEEKLY DDG SPOT PRICES

*The spot prices gathered by DTN are only intended to reflect general market trends and may vary. Please contact individual plant or merchandiser for exact prices.

CURRENT PREVIOUS
COMPANY STATE 7/15/2016 7/8/2016 CHANGE
Bartlett and Company, Kansas City, MO (816-753-6300)
Missouri Dry $155 $170 -$15
Modified $67 $70 -$3
CHS, Minneapolis, MN (800-769-1066)
Illinois Dry $145 $145 $0
Indiana Dry $145 $145 $0
Iowa Dry $140 $145 -$5
Michigan Dry $150 $150 $0
Minnesota Dry $125 $130 -$5
North Dakota Dry $125 $130 -$5
New York Dry $150 $150 $0
South Dakota Dry $120 $120 $0
MGP Ingredients, Atchison, KS (800-255-0302 Ext. 5253)
Kansas Dry $140 $140 $0
POET Nutrition, Sioux Falls, SD (888-327-8799)
Indiana Dry $155 $165 -$10
Iowa Dry $130 $140 -$10
Michigan Dry $140 $155 -$15
Minnesota Dry $125 $130 -$5
Missouri Dry $145 $145 $0
Ohio Dry $160 $165 -$5
South Dakota Dry $130 $135 -$5
United BioEnergy, Wichita, KS (316-616-3521)
Kansas Dry $135 $130 $5
Wet $40 $40 $0
Illinois Dry $160 $160 $0
Nebraska Dry $135 $130 $5
Wet $40 $40 $0
U.S. Commodities, Minneapolis, MN (888-293-1640)
Illinois Dry $155 $150 $5
Indiana Dry $145 $145 $0
Iowa Dry $135 $138 -$3
Michigan Dry $150 $150 $0
Minnesota Dry $130 $130 $0
Nebraska Dry $120 $125 -$5
New York Dry $155 $155 $0
North Dakota Dry $130 $130 $0
Ohio Dry $145 $145 $0
South Dakota Dry $125 $125 $0
Wisconsin Dry $140 $140 $0
Valero Energy Corp., San Antonio, TX (402-727-5300)
Indiana Dry $145 $150 -$5
Iowa Dry $130 $140 -$10
Minnesota Dry $130 $135 -$5
Nebraska Dry $125 $135 -$10
Ohio Dry $150 $160 -$10
South Dakota Dry $125 $130 -$5
Western Milling, Goshen, California (559-302-1074)
California Dry $198 $195 $3
*Prices listed per ton.
Weekly Average $138 $142 -$4
The weekly average prices above reflect only those companies DTN
collects spot prices from. States include: Missouri, Iowa, Nebraska,
Kansas, Illinois, Minnesota, North Dakota, South Dakota, Michigan,
Wisconsin and Indiana. Prices for Pennsylvania, New York and
California are not included in the averages.

If you would be willing to take a weekly phone call and have your distiller grains spot prices listed in this feature, please contact Cheryl Anderson at (308) 224-1527 or (800) 369-7875, or e-mail cheryl.anderson@dtn.com.

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VALUE OF DDG VS. CORN & SOYBEAN MEAL
Settlement Price: Quote Date Bushel Short Ton
Corn 7/14/2016 $3.6225 $129.38
Soybean Meal 7/14/2016 $381.30
DDG Weekly Average Spot Price $138.00
DDG Value Relative to: 7/8 7/1 6/24
Corn 106.67% 118.51% 120.20%
Soybean Meal 36.19% 38.38% 38.00%
Cost Per Unit of Protein:
DDG $5.52 $5.68 $6.16
Soybean Meal $8.03 $7.79 $8.53
Notes:
Corn and soybean prices taken from DTN Market Quotes. DDG
price represents the average spot price from Midwest
companies collected on Thursday afternoons. Soybean meal
cost per unit of protein is cost per ton divided by 47.5.
DDG cost per unit of protein is cost per ton divided by 25.

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USDA MARKET NEWS/DISTILLER GRAINS PRICES

USDA WEEKLY DISTILLERS GRAINS SUMMARY (July 7, 2016)

Dried Modified Wet
FOB PLANT PRICES PER TON
Iowa 120.00-160.00 49.00-75.00 34.00-42.00
Minnesota 142.00-150.00 63.00 32.00-45.00
Nebraska 125.00-150.00 55.00-70.00 32.00-45.00
South Dakota 125.00-140.00 55.00-65.00 36.00-40.00
Wisconsin 142.00-175.00 68.00 NQ
Eastern Corn Belt 142.00-165.00 66.00-75.00 NQ
Kansas 140.00-170.00 NQ 45.00-55.00
Northern Missouri 160.00-170.00 69.00 45.00-49.00
DELIVERED PRICES PER TON
CIF NOLA 165.00-180.00
Pacific Northwest 179.00-187.00
California 175.00-195.00
Texas Border (metric ton) 195.00-210.00
Lethbridge AB 150.00
Chicago 155.00-170.00

Dried Distillers Grain: 10% Moisture

Modified Wet Distillers: 50-55% Moisture

Wet Distillers Grains: 65-70% Moisture

CALIFORNIA WHOLESALE FEEDSTUFF PRICES (Tue July 12, 2016)

Distillers Dry Grains

  Rail to California Points           Ltd 190.00       dn 8.00
  FOB Truck to California Points      190.00-205.00    unch

PACIFIC NORTHWEST WEEKLY FEEDSTUFFS (Tue July 12, 2016)

Offers for Distillers Dried Grains delivered by rail to feed mills in the Pacific Northwest were steady to 10.00 lower from 183.00-218.00. Offers for distillers dried grains trans-loaded onto trucks and delivered to Willamette Valley dairies were also steady to 10.00 lower from 201.00-233.00.

*All prices quoted per ton unless otherwise noted.

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NASS/USDA MONTHLY CO-PRODUCTS PRODUCTION

Dry and Wet Mill, Co-products and Products Produced - United States

April 2016 - May 2016

July 1, 2016

Highlights:

Dry mill co-product production of distillers dried grains with solubles (DDGS) was 1.84 million tons during May 2016, up 7 percent from April 2016 but down 1 percent from May 2015. Distillers wet grains (DWG) 65 percent or more moisture was 1.23 million tons in May 2016, down 2 percent from April 2016 and down 10 percent from May 2015.

Wet mill corn gluten feed production was 333 thousand tons during May 2016, up 9 percent from April 2016 but down 4 percent from May 2015. Wet corn gluten feed 40 to 60 percent moisture was 306 thousand tons in May 2016, up 2 percent from April 2016 but down 5 percent from May 2015.

Co-products and Products May 2015 Apr 2016 May 2016
Dry Mill tons
Condensed distillers solubles (CDS-syrup) 148,757 130,324 131,318
Corn oil 117,049 111,077 121,699
Distillers dried grains (DDG) 418,448 374,750 411,467
Distillers dried grains with solubles (DDGS) 1,861,795 1,717,024 1,842,182
Modified distillers wet grains (DWG) <65% moisture 1,368,926 1,264,745 1,234,315
Modified distillers wet grains (DWG) 40-64% moisture 414,956 429,972 425,532
Wet Mill
Corn germ meal 69,274 67,530 63,859
Corn gluten feed 348,355 306,464 332,975
Corn gluten meal 97,139 84,916 88,177
Corn oil 53,208 51,455 50,262
Wet corn gluten feed 40-60% moisture 323,436 301,283 306,424

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DDG LINKS/RESOURCES

National Organizations:

Distillers Grains Technology Council (www.distillersgrains.org)

Renewable Fuels Association (www.ethanolrfa.org)

U.S. Grains Council (www.grains.org)

National Corn Growers Association (www.ngfa.org)

American Feed Industry Association (www.afia.org)

Government/Regulatory:

National Grains and Feed Association (www.ngfa.org)

Association of American Feed Control Officials (www.aafco.org)

USDA Animal Feed Safety System (http://1.usa.gov/…)

USDA Food Safety Modernization Act (http://1.usa.gov/…)

University Websites:

Corn Processing Coproducts Manual, Nebraska Corn Board and Nebraska Corn Board and the University of Nebraska-Lincoln Institute of Agriculture and Natural Resources Agricultural Research Division Cooperative Extension Division (http://bit.ly/…)

University of Minnesota Biofuels Coproducts in Animal Feed (www.biofuelscoproducts.umn.edu)

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DDG CONFERENCES

*Distillers Grains Technology Council Inc.'s 21th Annual Distillers Grains Symposium

The Distillers Grains Technology Council will hold its 21st Annual Distillers Grains Symposium on May 17-18, 2017 at the downtown Marriott in Indianapolis, IN. For information, contact the DGTC office at (515) 294-4019 or (800) 759-3448, or check the DGTC website (http://www.distillersgrains.org).

(If you are sponsoring or know of any event, conference or workshop on distillers grains, and would like to list it in the DTN Weekly Distillers Grains Update, please contact Cheryl Anderson (see contact info below).

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We welcome any comments/suggestions for this feature. Please let us know what information is valuable to you that we could include in the Distillers Grains Weekly Update. Please feel free to contact Cheryl Anderson at (402) 364-2183, or e-mail cheryl.anderson@dtn.com.

(CZ/)