Ethanol Blog

Slow Demand Pushes DDG Prices Down Again

By Cheryl Anderson , DTN Staff Reporter

What was described by merchandisers as a "ho-hum" market with sluggish demand resulted in prices of dried distillers grains falling slightly again in the past week.

The DTN weekly DDG spot price average fell $2 per ton in the past week, from $129 per ton the prior week to $127 per ton last week. This is the second week in a row the average has fallen, from $130 per ton Feb. 19 to last week's average of $130. The average has remained fairly steady for the last 11 weeks, hovering between $126 and $130 per ton since the last week of December 2015.

Of the 36 Midwestern locations DTN collects spot prices from, 19 locations reported their spot prices decreased between $2 per ton and $10 per ton last week. Prices at 17 locations remained unchanged. No price increases were reported to DTN.

Merchandisers told DTN last week that local demand was slowing down a bit. Some buying is happening, but not to any great extent. Export interest is fair, but like local demand, is far from robust.

One merchandiser commented that a lot of plants likely did not have many sales beyond the end of March, and may drop prices a bit to bring in some sales.

Part of the reason for lackluster sales may be that some customers may be waiting as long as they can to purchase product to see if prices fall further. The strong U.S. currency relative to other currencies may also be pushing prices down.

The lower DDG values caused the value of DDG relative to corn last week to fall from about 102% the prior week to about 98% last week. The value of DDG relative to soybean meal also fell from about 49% two weeks ago to about 47% this week.

The cost per unit of protein for DDG held relatively steady last week at about $5, as did the cost per unit of protein for soybean meal at nearly $6.

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

(ES)

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