DTN Distillers Grain Weekly Update

DDG Prices Steady

Mary Kennedy
By  Mary Kennedy , DTN Basis Analyst
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DTN's average weekly spot price for DDG was up $2, at $96 per ton. (DTN file photo by Elaine Shein)

The DTN average DDG spot price was up $2 per ton from one week ago, at $96, for the week ended Feb. 9. Of the 39 locations from which DTN collects spot prices, nine bids were $5 to $10 higher, two bids were $2 lower and the balance of the prices were unchanged.

Merchandisers told DTN that domestic demand remains steady and prices have remained firm, even with the ample supply of product in most places on hand due to strong runtimes. There isn't much in the way of forward offers as processors aren't willing to go too far out due to current thin margins. Informa Economics reported that with production last week, the second largest on record, "ethanol production margins continued to feel pressure with Central Illinois at $0.02 per gallon as of Feb. 1. Other locations ranged from as low as negative $0.10 per gallon to as high as positive $0.17 per gallon."

CIF NOLA (New Orleans, Louisiana) DDGS prices for the week ended Feb. 9 were up 4 cents, to up 3 cents for February, at $128 to $134; March was up 6 cents, to up 4 cents, at $132 to $134. Barge and container yard offers were a little higher this week, but according to Informa Economics, there have been no large volume trades, suggesting fundamentals haven't changed enough to justify a price increase.

In a letter to President Donald Trump this week, the U.S. Grains Council (USGC), Renewable Fuels Association (RFA) and Growth Energy are asking for help "in urgently addressing China's recent implementation of protectionist trade barriers that are shutting out U.S. exports of ethanol and distillers dried grains (DDGS)."

Remember that in September 2016, after a nine-month investigation, China imposed a preliminary anti-dumping duty of 33.8% against U.S. DDGS and a countervailing duty of 10% to 10.7%. In a final ruling Jan. 10, 2017, China increased its DDGS anti-dumping duty to 42.2% to 53.7% and its DDGS countervailing duty to 11.2% to 12%. Additionally, the tariffs on U.S. ethanol have increased from 5% to 30% to 40%.

According to USGC, China had grown to be a top export market for U.S. DDGS. In 2015, the country imported 6.5 million metric tons of the ethanol co-product, worth $1.6 billion and accounting for 51% of total U.S. DDGS exports. China's recent actions have contributed to lower prices for ethanol and DDGS. Ethanol prices have fallen 15% since mid-December of 2016, while DDGS prices are currently approximately 40% lower than in June 2016. Here is a link to the entire letter: https://goo.gl/…

The value of DDG relative to corn for the week ended Feb. 9 was higher at 72.75% vs. 72.38% the prior week. The value of DDG relative to soybean meal was lower at 28.37 vs. 28.46% the prior week. The cost per unit of protein for DDG was 4 cents higher at $3.84 vs. $3.80 compared to the cost per unit of protein for soybean meal, which was 9 cents higher at $7.12 vs. $7.03 the prior week.

CURRENT CURRENT
COMPANY STATE 2/9/2017 2/2/2017 CHANGE
Bartlett and Company, Kansas City, MO (816-753-6300)
Missouri Dry $122 $122 $0
Modified $60 $60 $0
CHS, Minneapolis, MN (800-769-1066)
Illinois Dry $95 $95 $0
Indiana Dry $90 $90 $0
Iowa Dry $90 $85 $5
Michigan Dry $85 $85 $0
Minnesota Dry $90 $85 $5
North Dakota Dry $95 $95 $0
New York Dry $115 $110 $5
South Dakota Dry $90 $90 $0
MGP Ingredients, Atchison, KS (800-255-0302 Ext. 5253)
Kansas Dry $105 $105 $0
POET Nutrition, Sioux Falls, SD (888-327-8799)
Indiana Dry $90 $90 $0
Iowa Dry $98 $100 -$2
Michigan Dry $90 $90 $0
Minnesota Dry $95 $95 $0
Missouri Dry $115 $115 $0
Ohio Dry $90 $90 $0
South Dakota Dry $98 $98 $0
United BioEnergy, Wichita, KS (316-616-3521)
Kansas Dry $105 $105 $0
Wet $40 $40 $0
Illinois Dry $100 $100 $0
Nebraska Dry $105 $105 $0
Wet $40 $40 $0
U.S. Commodities, Minneapolis, MN (888-293-1640)
Illinois Dry $95 $85 $10
Indiana Dry $90 $80 $10
Iowa Dry $95 $95 $0
Michigan Dry $90 $80 $10
Minnesota Dry $90 $85 $5
Nebraska Dry $100 $100 $0
New York Dry $105 $105 $0
North Dakota Dry $105 $105 $0
Ohio Dry $90 $80 $10
South Dakota Dry $95 $90 $5
Wisconsin Dry $95 $95 $0
Valero Energy Corp., San Antonio, TX (402-932-5901)
Indiana Dry $90 $90 $0
Iowa Dry $100 $100 $0
Minnesota Dry $95 $95 $0
Nebraska Dry $100 $100 $0
Ohio Dry $100 $100 $0
South Dakota Dry $90 $90 $0
California $158 $160 -$2
Western Milling, Goshen, California (559-302-1074)
California Dry $172 $172 $0
*Prices listed per ton.
Weekly Average $96 $94 $2
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 2/9/2017 $3.6950 $131.96
Soybean Meal 2/9/2017 $338.40
DDG Weekly Average Spot Price $96.00
DDG Value Relative to: 2/6 2/1
Corn 72.75% 72.38%
Soybean Meal 28.37% 28.46%
Cost Per Unit of Protein:
DDG $3.84 $3.80
Soybean Meal $7.12 $7.03
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 Mary Kennedy on Twitter @MaryCKenn

(ES/BAS)

Mary Kennedy

Mary Kennedy
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