Prices of dried distillers grains took a dramatic fall in the past week, fueled by similar decreases in corn and soybean meal prices.
The DTN weekly spot price average fell a total of $8 per ton in the past week, from $168 per ton last week to $160 this week. This follows a $48 increase during the past consecutive nine weeks that had brought DDG prices to their highest point since late May of 2015.
Of the 36 Midwestern locations DTN collects spot prices from, a total of 31 locations reported decreases between $5 and $25 per ton in the past week. However, most price decreases were in the $5 to $10 per ton range. Prices at only five locations were unchanged in the past week. No price increases were reported.
Merchandisers told DTN the falling prices of corn and soybean meal were driving down other commodities, especially DDG which competes with both for a source of protein in livestock rations. Some felt that with prices rising so dramatically in recent weeks, a pullback in prices was inevitable.
Some merchandisers mentioned that reduced export demand was contributing to the price decline as well.
Domestic demand seems to be hesitant, as some buyers may be waiting to see if DDG prices drop any further in coming weeks.
In spite of the falling prices, the value of DDG relative to corn this week actually rose from about 111% last week to about 116% this week. The value of DDG relative to soybean meal remained unchanged at about 42%.
The cost per unit of protein for DDG was about %6.40 this week, compared to the cost per unit of protein for soybean meal at $8.07.
Cheryl Anderson can be reached at Cheryl.firstname.lastname@example.org.
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