Despite speculation that dried distillers grains prices are rebounding from last week's plunge, price levels may have recovered slightly from the downward trend. However, prices overall have fallen slightly again this week.
The DTN weekly DDG spot price average fell $4 per ton since last week, have fallen a total of $34 per ton since the third week in December. This is also the lowest point the average has reached since the first week of February 2012.
Of the 30 Midwestern locations DTN collects spot prices from, 14 locations reported their prices had decreased between $5 and $35 per ton in the past week, though most decreases were in the $5 to $20-per-ton range. Only five locations said prices increases of $5 to $20 per ton since last week, while prices at 10 locations remained unchanged. One location reported no offers.
While China has begun accepting some shipments of DDG previously held under quarantine for carrying the MIR 162 GMO trait, it is not enough to solve the problem of excess supply that had built up in recent weeks. Also, freezing conditions and wintery weather have caused snags in logistics that are also causing problems with plants getting rid of excess supply.
Merchandisers told DTN this week that it may take several weeks to alleviate some of the backlog and for pricing to recover. Some expect prices to trend higher as logistics get back under control and that the markets should strengthen as soon as plants sell-off inventory a little cheaper to clear out supplies.
The value of DDG relative to corn this week remained fairly steady at nearly 126%, while the value of DDG relative to soybean meal fell slightly to about 43%.
The cost per unit of protein for DDG was at about $7.40 this week, compared to the cost per unit of protein for soybean meal at $9.12.
Cheryl Anderson can be reached at Cheryl.firstname.lastname@example.org.
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