Market Matters Blog

DDG Prices Lower as Supplies Outweigh Demand

Mary Kennedy
By  Mary Kennedy , DTN Basis Analyst
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DTN's average weekly spot price for DDG was down $1, at $91 per ton. (DTN file photo by Elaine Shein)

The DTN average dried distillers grains, or DDG, spot price was down $1 per ton from one week ago, at $91, for the week ended March 23. Of the 39 locations from which DTN collects spot prices, 11 bids ranged from $2 to $5 lower and the balance of the prices were unchanged.

The value of DDG relative to corn for the week ended March 23 was at about 71% and the value of DDG relative to soybean meal was at about 28%. The cost per unit of protein for DDG was at $3.64 compared to the cost per unit of protein for soybean meal which was at $6.75.

Prices moved slightly lower on average because of lackluster demand and cheaper corn prices according to one merchandiser. Supplies remain plentiful in most markets except a few where some plants have started spring maintenance downtimes. Wednesday's U.S. Energy Information Administration report showed ethanol production continues to run at a historically high level and with cheaper corn prices helping margins improve, plants likely won't slow down much. Informa Economics said maintenance downtimes in the coming weeks "shouldn't be enough of a DDG supply disruption to cause prices to climb given the abundance of supply and the seasonal slowdown in usage."

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CIF NOLA (New Orleans, Louisiana) dried distillers grains with solubles, or DDGS, prices for the week ended March 23 were unchanged to down 2 cents for March vs. last week, at $120 to $123 per ton and down 2 cents for April at $120 to $123. Export buying interest for containerized supplies has been weak with fewer than normal bids. Prices for export markets are at competitive levels, yet buyers are reluctant to book forward in anticipation of prices continuing to soften, according to Informa Economics.

Dry mill coproduct production of distillers dried grains with solubles (DDGS) was 23.2 million tons during 2016, up 4% from 2015, according to USDA's grain crushings and co-products production annual summary released earlier this month. It also showed distillers wet grains, with 65% or more moisture, was 15.3 million tons in 2016. The number was down about 5% from 2015. DDG was 4.86 million tons in 2016, down 5% from 2015. Here is a link to the complete report: https://goo.gl/…

CURRENT CURRENT CHANGE
COMPANY STATE 3/23/2017 3/16/2017
Bartlett and Company, Kansas City, MO (816-753-6300)
Missouri Dry $115 $118 -$3
Modified $60 $60 $0
CHS, Minneapolis, MN (800-769-1066)
Illinois Dry $90 $95 -$5
Indiana Dry $90 $90 $0
Iowa Dry $90 $90 $0
Michigan Dry $85 $85 $0
Minnesota Dry $85 $85 $0
North Dakota Dry $90 $90 $0
New York Dry $105 $105 $0
South Dakota Dry $85 $85 $0
MGP Ingredients, Atchison, KS (800-255-0302 Ext. 5253)
Kansas Dry $100 $103 -$3
POET Nutrition, Sioux Falls, SD (888-327-8799)
Indiana Dry $90 $90 $0
Iowa Dry $90 $93 -$3
Michigan Dry $90 $90 $0
Minnesota Dry $88 $90 -$2
Missouri Dry $110 $115 -$5
Ohio Dry $90 $90 $0
South Dakota Dry $90 $90 $0
United BioEnergy, Wichita, KS (316-616-3521)
Kansas Dry $100 $100 $0
Wet $45 $45 $0
Illinois Dry $100 $100 $0
Nebraska Dry $100 $100 $0
Wet $35 $35 $0
U.S. Commodities, Minneapolis, MN (888-293-1640)
Illinois Dry $95 $95 $0
Indiana Dry $90 $90 $0
Iowa Dry $92 $95 -$3
Michigan Dry $95 $95 $0
Minnesota Dry $80 $85 -$5
Nebraska Dry $95 $95 $0
New York Dry $120 $120 $0
North Dakota Dry $100 $100 $0
Ohio Dry $93 $98 -$5
South Dakota Dry $85 $90 -$5
Wisconsin Dry $90 $90 $0
Valero Energy Corp., San Antonio, TX (402-932-5901)
Indiana Dry $80 $80 $0
Iowa Dry $85 $85 $0
Minnesota Dry $80 $80 $0
Nebraska Dry $85 $85 $0
Ohio Dry $90 $90 $0
South Dakota Dry $80 $80 $0
California $150 $150 $0
Western Milling, Goshen, California (559-302-1074)
California Dry $160 $163 -$3
*Prices listed per ton.
Weekly Average $91 $92 -$1
The weekly average prices above reflect only those companies DTN
collects spot prices from. States include: Missouri, Iowa, Nebraska,
Kansas, Illinois, Minnesota, North Dakota, South Dakota, Michigan,
Wisconsin and Indiana. Prices for Pennsylvania, New York and
California are not included in the averages.

Mary Kennedy can be reached at mary.kennedy@dtn.com

Follow Mary Kennedy on Twitter @MaryCKenn

(TN)

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