Market Matters Blog

The DTN average dried distillers grains, or DDG, spot price was up $2 from one week ago, at $94, for the week ended April 6. Of the 39 locations from which DTN collects spot prices, 12 bids were $2 to $10 higher, two bids were $5 lower and the balance of the prices were unchanged.

The value of DDG relative to corn for the week ended April 6 was at 72.95% and the value of DDG relative to soybean meal was at 30.45%. The cost per unit of protein for DDG was at $3.76, compared to the cost per unit of protein for soybean meal which was at $6.50.

Merchandisers told DTN modest price increases were made at locations that are down for spring maintenance. A dryer fire and plant downtimes caused Minnesota prices to move higher. Since ethanol production margins remain favorable, plants are expected to get back online quickly because of the financial incentive. According to Informa Economics, ethanol production margins were steady to firmer as of March 29, with central Illinois at 15 cents per gallon, while other locations ranged from 7 cents per gallon to 20 cents per gallon. When plants are running full speed again, we could see prices start to slowly move lower as supplies build.

CIF NOLA (New Orleans, Louisiana) dried distillers grains with solubles, or DDGS, prices for the week ended April 6 were unchanged for April at $121 to $124. According to U.S. Census Bureau data released April 4, U.S. exports of distillers grains totaled 1,070,744 metric tons in February, up 36% from a year ago, up 14% since January and the highest monthly total in six months. Mexico, currently the top U.S. DDGS importer, accounted for 23% of the U.S. exports with purchases totaling to 241,249 metric tons. Turkey increased its purchases to 152,537 metric tons, Thailand purchased 71,838 metric tons, China purchased 64,534 metric tons and Japan purchased 62,562 metric tons.

Mexico and Turkey accounted for two-thirds of February exports with the remaining purchases distributed among 29 countries. Still absent is Vietnam, which still has not come to a decision on the fumigation issue. USDA's Animal and Plant Health Inspection Service, or APHIS, and Vietnam's Plant Protection Department have had communications about what fumigants can be accepted for use on containers, but there is no word that anything has been decided. In the first two months of 2017, exports of U.S. distillers grains were up 27% from a year ago. That is bullish news for the market.

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

Follow Mary Kennedy on Twitter @MaryCKenn

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