DDG Weekly Update
DDG Prices Lower Due to China Tariff
The DTN average DDG spot price was $5 per ton lower for the week ended Sept. 29 at $111 per ton with price drops ranging from $2 to $12. Of the 37 locations from which DTN collects spot prices, one location showed a slight increase, seven were unchanged from the prior week, and the balance of the prices were lower. A merchandiser told me domestic demand still seems to be good, although buyers only want to buy nearby with the softness in the market. Another merchandiser told me the drop in values is because of the tariffs put on by China and he thinks there are a lot of domestic end users needing to buy, but may not take the plunge yet in hope of cheaper prices. In the meantime, there is a large corn crop expected and, as harvest ramps up, there is potential for basis and cash corn prices to fall, adding to weaker prices for all corn by-product feed ingredients.
China's Ministry of Commerce (MOFCOM) said in a statement on Wednesday they will impose an anti-subsidy duty on imports of distillers' dried grains with or without solubles from the U.S. of 10 to 10.7 cents, in addition to an anti-dumping deposit of 33.8% imposed last week. A merchandiser told me rail and export markets took a "significant hit" this week after the China announcements. He told me it seems to be overdone as China wasn't taking that much tonnage the past few months, but the other Asia countries are using it as an excuse to drop their bids. Another merchandiser told me that many traders are still digesting this latest announcement and are unsure of what to think yet.
CIF NOLA prices were lower for the week ended Sept. 29 with October prices down seven cents to down four cents at $145 to $154 per ton and O/N/D was bid at $145-$153. Informa Economics reported, "There are other modestly bearish factors for weaker DDG prices, like higher freight cost on containers and rail cars. Prices at container yards and rail quotes to the Far West have shifted down more than local truck markets in the Midwest."
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The value of DDG relative to corn for the week ended Sept. 29 was lower at 94.40% vs. 96.45% the prior week and the value of DDG relative to soybean meal was lower at 32.26% vs. the prior week at 37.67%. The cost per unit of protein for DDG was lower at $4.44 vs. $4.64 the prior week, compared to the cost per unit of protein for soybean meal which was lower at $6.27 vs. the prior week of $6.48. Cash soybean meal prices have edged lower which should put some downward pressure on the value that protein in DDG brings to feed rations.
| CURRENT | PREVIOUS | ||||
| COMPANY | STATE | 9/29/2016 | 9/22/2016 | CHANGE | |
| Bartlett and Company, Kansas City, MO (816-753-6300) | |||||
| Missouri | Dry | $120 | $125 | -$5 | |
| Modified | $63 | $65 | -$2 | ||
| CHS, Minneapolis, MN (800-769-1066) | |||||
| Illinois | Dry | $118 | $125 | -$7 | |
| Indiana | Dry | $118 | $125 | -$7 | |
| Iowa | Dry | $105 | $115 | -$10 | |
| Michigan | Dry | $125 | $135 | -$10 | |
| Minnesota | Dry | $100 | $105 | -$5 | |
| North Dakota | Dry | $105 | $110 | -$5 | |
| New York | Dry | $145 | $145 | $0 | |
| South Dakota | Dry | $100 | $105 | -$5 | |
| MGP Ingredients, Atchison, KS (800-255-0302 Ext. 5253) | |||||
| Kansas | Dry | $115 | $120 | -$5 | |
| POET Nutrition, Sioux Falls, SD (888-327-8799) | |||||
| Indiana | Dry | $122 | $125 | -$3 | |
| Iowa | Dry | $125 | $115 | $10 | |
| Michigan | Dry | $115 | $120 | -$5 | |
| Minnesota | Dry | $103 | $110 | -$7 | |
| Missouri | Dry | $118 | $130 | -$12 | |
| Ohio | Dry | $123 | $125 | -$2 | |
| South Dakota | Dry | $112 | $110 | $2 | |
| United BioEnergy, Wichita, KS (316-616-3521) | |||||
| Kansas | Dry | $118 | $125 | -$7 | |
| Wet | $40 | $40 | $0 | ||
| Illinois | Dry | $130 | $135 | -$5 | |
| Nebraska | Dry | $118 | $125 | -$7 | |
| Wet | $40 | $40 | $0 | ||
| U.S. Commodities, Minneapolis, MN (888-293-1640) | |||||
| Illinois | Dry | $115 | $120 | -$5 | |
| Indiana | Dry | $115 | $120 | -$5 | |
| Iowa | Dry | $105 | $112 | -$7 | |
| Michigan | Dry | $115 | $120 | -$5 | |
| Minnesota | Dry | $95 | $102 | -$7 | |
| Nebraska | Dry | $100 | $108 | -$8 | |
| New York | Dry | $130 | $135 | -$5 | |
| North Dakota | Dry | $105 | $105 | $0 | |
| Ohio | Dry | $120 | $120 | $0 | |
| South Dakota | Dry | $100 | $100 | $0 | |
| Wisconsin | Dry | $110 | $112 | -$2 | |
| Valero Energy Corp., San Antonio, TX (402-727-5300) | |||||
| Indiana | Dry | $110 | $115 | -$5 | |
| Iowa | Dry | $105 | $105 | $0 | |
| Minnesota | Dry | $100 | $105 | -$5 | |
| Nebraska | Dry | $100 | $110 | -$10 | |
| Ohio | Dry | $120 | $125 | -$5 | |
| South Dakota | Dry | $95 | $100 | -$5 | |
| California | $160 | $170 | -$10 | ||
| Western Milling, Goshen, California (559-302-1074) | |||||
| California | Dry | $170 | $180 | -$10 | |
| *Prices listed per ton. | |||||
| Weekly Average | $111 | $116 | -$5 | ||
| 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 | 9/29/2016 | $3.2925 | $117.59 |
| Soybean Meal | 9/29/2016 | $297.90 | |
| DDG Weekly Average Spot Price | $111.00 | ||
| DDG Value Relative to: | 9/29 | 9/22/2016 | |
| Corn | 94.40% | 96.45% | |
| Soybean Meal | 37.26% | 37.67% | |
| Cost Per Unit of Protein: | |||
| DDG | $4.44 | $4.64 | |
| Soybean Meal | $6.27 | $6.48 | |
| Notes: | |||
| Corn and soybean prices take 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 her on Twitter @MaryCKenn
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