DDG Weekly Update

DDG Prices Continue Lower

Mary Kennedy
By  Mary Kennedy , DTN Basis Analyst
Connect with Mary:
DTN's average weekly spot price for DDG was lower at $108 the past week. (DTN file photo by Elaine Shein)

The DTN average DDG spot price was $3 per ton lower for the week ended Oct. 6 at $108 per ton with price drops ranging from $2 to $25 per ton. Of the 37 locations from which DTN collects spot prices, one location showed a slight increase, 22 were unchanged from the prior week, and the balance of the prices were lower. A merchandiser told me markets were lower this week on recent bearish news from Asia and also from other competing feed ingredients priced in sync with DDG values. Prices have weakened on slowing export buying interest with prices for export bid lower than local Midwest truck markets.

Informa Economics reported that maintenance schedules are expected to be winding down over the next couple weeks "which should mean an increase in supply coming to market since margins for ethanol producers remain favorable. Forward buying interest remains light domestically and for exports as buyers are waiting for a bottom to develop before covering their forward requirements. Once corn harvest progresses and if there is additional downward pressure on basis, there will likely be modest price declines."

There wasn't anything new to report out of China after last week's announcements since they are on an extended vacation through Oct. 9 to celebrate Chinese National Day Holiday. The final decision on the CVD/AD (countervailing duty and anti-dumping) penalty levied on U.S. DDG imports is expected between now and January 12, 2017, according to traders.

CIF NOLA (New Orleans, Louisiana) prices were lower for the week ended Oct. 6 with October prices down five cents to down ten cents at $140 to $144 per ton and November down five cents to down eight cents at $140 to $145. U.S. Grains Council said late last week that some sources in the trade believe "U.S. DDGS prices will still be on par with domestic Chinese product after the combined CVD/AD penalty is applied. This will make customer preference regarding quality a stronger variable. To the degree that China's DDGS imports decline, buyers in other destinations will see this as an opportunity -- including in Vietnam and Korea among other destinations."

The value of DDG relative to corn for the week ended Oct. 6 was lower at 88.81% vs. 94.40% the prior week and the value of DDG relative to soybean meal was lower at 35.82% vs. the prior week at 37.26%. The cost per unit of protein for DDG was lower at $4.32 vs. $4.44 the prior week, compared to the cost per unit of protein for soybean meal which was higher at $6.35 vs $6.27 the prior week.

CURRENT PREVIOUS
COMPANY STATE 10/6/2016 9/29/2016 CHANGE
Bartlett and Company, Kansas City, MO (816-753-6300)
Missouri Dry $120 $120 $0
Modified $63 $63 $0
CHS, Minneapolis, MN (800-769-1066)
Illinois Dry $115 $118 -$3
Indiana Dry $110 $118 -$8
Iowa Dry $105 $105 $0
Michigan Dry $125 $125 $0
Minnesota Dry $100 $100 $0
North Dakota Dry $100 $105 -$5
New York Dry $130 $145 -$15
South Dakota Dry $100 $100 $0
MGP Ingredients, Atchison, KS (800-255-0302 Ext. 5253)
Kansas Dry $110 $115 -$5
POET Nutrition, Sioux Falls, SD (888-327-8799)
Indiana Dry $120 $122 -$2
Iowa Dry $100 $125 -$25
Michigan Dry $112 $115 -$3
Minnesota Dry $100 $103 -$3
Missouri Dry $115 $118 -$3
Ohio Dry $120 $123 -$3
South Dakota Dry $100 $112 -$12
United BioEnergy, Wichita, KS (316-616-3521)
Kansas Dry $118 $118 $0
Wet $40 $40 $0
Illinois Dry $130 $130 $0
Nebraska Dry $118 $118 $0
Wet $40 $40 $0
U.S. Commodities, Minneapolis, MN (888-293-1640)
Illinois Dry $115 $115 $0
Indiana Dry $115 $115 $0
Iowa Dry $105 $105 $0
Michigan Dry $115 $115 $0
Minnesota Dry $95 $95 $0
Nebraska Dry $100 $100 $0
New York Dry $130 $130 $0
North Dakota Dry $105 $105 $0
Ohio Dry $120 $120 $0
South Dakota Dry $100 $100 $0
Wisconsin Dry $110 $110 $0
Valero Energy Corp., San Antonio, TX (402-727-5300)
Indiana Dry $100 $110 -$10
Iowa Dry $100 $105 -$5
Minnesota Dry $95 $100 -$5
Nebraska Dry $95 $100 -$5
Ohio Dry $115 $120 -$5
South Dakota Dry $90 $95 -$5
California $152 $160 -$8
Western Milling, Goshen, California (559-302-1074)
California Dry $175 $170 $5
*Prices listed per ton.
Weekly Average $108 $111 -$3
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 10/6/2016 $3.4050 $121.61
Soybean Meal 10/6/2016 $301.50
DDG Weekly Average Spot Price $108.00
DDG Value Relative to: 10/6 9/29/2016
Corn 88.81% 94.40%
Soybean Meal 35.82% 37.26%
Cost Per Unit of Protein:
DDG $4.32 $4.44
Soybean Meal $6.35 $6.27
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

(CZ/)

Mary Kennedy

Mary Kennedy
Connect with Mary: