DDG Weekly Update

Lower Corn Prices Contribute to DDG Price Decline

Mary Kennedy
By  Mary Kennedy , DTN Basis Analyst
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Dry distillers grain. (DTN file photo by Cheryl Anderson)

Concern over China's next move on the anti-dumping investigation against the U.S and weaker corn prices pushed DDG prices lower this week.

The DTN average weekly spot price average fell $14 per ton since July 22 to $121 this week. Of the 36 Midwestern locations DTN collects spot prices from, all but one location reported spot prices decreased between $5 and $26 per ton in the past two weeks. As one merchandiser put it, it's a slow grind down.

DDG prices continue to be under pressure from lower corn and soybean meal prices. Both compete with DDG as a protein source in livestock rations so DDG prices need to be competitive to stay in rations. The recent heat wave did not help demand either. A merchandiser told me that a feed mill he does business with said tonnages were down because of the hot weather.

Another factor is that there is plenty of supply at plants as ethanol production has been steady week-over-week. Wednesday's EIA report showed that as of July 29 plant production increased 0.6% for an increase of 4.5% year-over-year.

CIF NOLA bids were lower Thursday with August down 3 to 4 cents and September down 1 to 3 cents. Container movement for export has been steady but slower since the end of July. Some of that can be due to oversupply causing cheaper prices as well as concern over what China will do next as it pertains to penalizing U.S. DDG exports.

As far as China's anti-dumping investigation which started on August 2 in Beijing, no decision has been made yet with expectations they will make it in mid-September. One merchandiser told me he really didn't know if it will make a lot of difference since they have so much corn in inventory.

The value of DDG relative to corn this week dropped to 105% vs. 113% vs. two weeks ago and the value of DDG relative to soybean meal was lower at 36% vs. 38% two weeks ago. The cost per unit of protein for DDG was about $4.84 this week, compared to the cost per unit of protein for soybean meal at $6.94.

CURRENT SPOT PRICES

CURRENT PREVIOUS
COMPANY STATE 8/4/2016 7/22/2016 CHANGE
Bartlett and Company, Kansas City, MO (816-753-6300)
Missouri Dry $150 $155 -$5
Modified $60 $67 -$7
CHS, Minneapolis, MN (800-769-1066)
Illinois Dry $135 $140 -$5
Indiana Dry $127 $140 -$13
Iowa Dry $110 $130 -$20
Michigan Dry $130 $140 -$10
Minnesota Dry $110 $125 -$15
North Dakota Dry $105 $120 -$15
New York Dry $110 $145 -$35
South Dakota Dry $105 $120 -$15
Hawkeye Gold, IA (515-663-6413)
Iowa Dry NA NA #VALUE!
Modified NA NA #VALUE!
MGP Ingredients, Atchison, KS (800-255-0302 Ext. 5253)
Kansas Dry $120 $130 -$10
POET Nutrition, Sioux Falls, SD (888-327-8799)
Indiana Dry $135 $150 -$15
Iowa Dry $120 $130 -$10
Michigan Dry $125 $130 -$5
Minnesota Dry $115 $125 -$10
Missouri Dry $135 $145 -$10
Ohio Dry $135 $155 -$20
South Dakota Dry $115 $125 -$10
United BioEnergy, Wichita, KS (316-616-3521)
Kansas Dry $118 $127 -$9
Wet $40 $30 $10
Illinois Dry $150 $150 $0
Nebraska Dry $118 $127 -$9
Wet $40 $30 $10
U.S. Commodities, Minneapolis, MN (888-293-1640)
Illinois Dry $130 $155 -$25
Indiana Dry $125 $145 -$20
Iowa Dry $115 $135 -$20
Michigan Dry $125 $145 -$20
Minnesota Dry $110 $130 -$20
Nebraska Dry $110 $115 -$5
New York Dry $125 $155 -$30
North Dakota Dry $120 $125 -$5
Ohio Dry $120 $145 -$25
South Dakota Dry $110 $115 -$5
Wisconsin Dry $120 $140 -$20
Valero Energy Corp., San Antonio, TX (402-727-5300)
Indiana Dry $125 $145 -$20
Iowa Dry $115 $130 -$15
Minnesota Dry $110 $130 -$20
Nebraska Dry $110 $125 -$15
Ohio Dry $135 $150 -$15
South Dakota Dry $110 $125 -$15
Western Milling, Goshen, California (559-302-1074)
California Dry $185 $195 -$10
*Prices listed per ton.
Weekly Average $121 $135 -$14
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.
VALUE OF DDG VS. CORN & SOYBEAN MEAL
Settlement Price: Quote Date Bushel Short Ton
Corn 8/4/2016 $3.2075 $114.55
Soybean Meal 8/4/2016 $329.70
DDG Weekly Average Spot Price $121.00
DDG Value Relative to: 8/4 7/22 7/15
Corn 105.63% 113.09% 106.67%
Soybean Meal 36.70% 38.30% 36.19%
Cost Per Unit of Protein:
DDG $4.84 $5.40 $5.52
Soybean Meal $6.94 $7.42 $8.03
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.

Mary Kennedy can be reached at mary.kennedy@dtn.com

Follow Mary Kennedy on Twitter @MaryCKenn

(CZ/SK)

Mary Kennedy

Mary Kennedy
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