Ethanol Blog

Prices of dried distillers grains leveled off for now from their previous upward trend amid more talk of DDG purchases by China.

The DTN weekly DDG spot price average remained unchanged since last week at $171 per ton. However, this is still the highest the average has reached since mid-June.

Of the 36 Midwestern locations DTN collects spot prices from, five said their prices had increased between $5 and $10 per ton, and two reported their prices had decreased. Prices at 21 locations were unchanged since last week and prices for eight locations were unavailable.

Merchandisers told DTN that rumors are circulating that China has jumped in and bought more vessels recently. Although prices have somewhat leveled off, logistics prices are up, including river traffic and western rail. In the meantime, the recent freezing weather is wreaking havoc on the truck market, as trucks find it difficult completing routes with fuel filters and other lines freezing in subzero temperatures.

More buying by China, higher shipping prices and cold weather woes could lead to another upswing in coming weeks, but as one seller said, "We just need it to warm up so we can get back to normal."

The value of DDG relative to corn jumped to more than 121% this week from 115% last week, while the value of DDG relative to soybean meal also rose from 43% to 47%.

The cost per unit of protein for DDG was $6.84 this week, compared to the cost per unit of protein for soybean meal at $7.61.

Cheryl Anderson can be reached at Cheryl.anderson@dtn.com.

(ES)

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