Ethanol Blog

Lack of Demand Pushes DDG Prices Lower Once Again

Cheryl Anderson
By  Cheryl Anderson , DTN Staff Reporter

Prices of dried distillers grains continued on a downward track this week as lack of demand and hesitant buyers put a damper on purchasing.

The DTN weekly DDG spot price average fell another $4 per ton this week, from $135 per ton last week to $131 per ton this week. This is the sixth consecutive week the average has continued its downward trend, falling $17 per ton since late July.

Of the 36 Midwestern locations DTN collects spot prices from, 15 locations reported their spot prices had decreased in the past week between $2 and $10 per ton, although most price decreases reported were about $5 per ton. Prices at 11 locations said their spot prices remained unchanged since last week. Only one price increase of $2 per ton was reported.

Merchandisers described the market in the past week as slow, and told DTN that lack of demand from both domestic and export markets continues to put a damper on selling. Some buyers seem to either be just buying hand-to-mouth or waiting to make purchases in the hopes that prices will continue to decline.

With ideal temperatures and weather, the market seems to be awaiting harvest results to see if crops will produce the high yields expected. Also, decreases in the corn board also played a role in the DDG price decline, as many times DDG prices mirror movement in corn prices.

Another factor to watch may be the effect of scheduled fall maintenance shut-downs at some ethanol plants and whether any down time will affect inventories.

The value of DDG relative to corn this week rose slightly, from about 104% last week to about 105% this week, while the value of DDG relative to soybean meal remained relative unchanged at about 41% in the past week.

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

(ES)

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