Ethanol Blog

Merchandisers reported supplies of dried distillers grains to be a bit tighter this week, resulting in a slight increase in prices.

The DTN weekly DDG spot price average increased slightly in the past week, rising from $179 per ton last week to $181 per ton this week. Although spot prices were marginally higher, the average still continues on a fairly steady trend, having hovered between $178 and $181 per ton since mid-January.

Of the 36 Midwestern locations DTN collects spot prices from, 21 locations reported that their DDG spot prices remained unchanged last week. Spot prices at 14 locations increased between $5 and $10 per ton in the past week, and one location had no offers this week. No price decreases were reported this week.

Merchandisers told DTN supplies are a bit tighter this week than last, accounting for the slight price increases. Some sellers expected product to be snug through April. One merchandiser reported he has had to turn down requests for truckloads in recent weeks.

One factor contributing to the tightness in supply may be that some ethanol plants may be beginning their scheduled spring maintenance shut-downs and are cutting back production.

Also, logistics may play a role in tightness. The Ohio River was flooded for a week or so, snagging product movement for a time. Also, the mid-Mississippi River, from about St. Louis north is finally opened up after winter, resulting in resumed shipping and more product flowing out of Iowa.

Containers are starting to flow better to export markets, and there seems to be a decent supply of rail cars.

The value of DDG relative to corn this week actually fell about 4% in the past week, from about 134% last week to about 130% this week. Even though the price of corn remained relatively stable at about $3.90 per bushel, the slight increase in DDG prices seems to have served in pushing that value upward.

The value of DDG relative to soybean meal remained steady in the past week at about 56%.

The cost per unit of protein for DDG this week remained steady at about $7.24, compared to the cost per unit of protein for soybean meal at about $6.79.

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

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