Market Matters Blog

DDG Weekly Update: DDG Prices Firm

Mary Kennedy
By  Mary Kennedy , DTN Basis Analyst
Connect with Mary:
DTN's average weekly spot price for DDG was up $1, at $95 per ton. (DTN file photo by Elaine Shein)

The DTN average dried distillers grains, or DDG, spot price was up $1 from two weeks ago, at $95, for the week ended April 20. Of the 39 locations from which DTN collects spot prices, eight bids were $2 to $10 higher, three bids were $2 to $5 lower and the balance of the prices were unchanged.

The value of DDG relative to corn for the week ended April 20 was at 74.35% and the value of DDG relative to soybean meal was at 30.85%. The cost per unit of protein for DDG was at $3.80, compared to the cost per unit of protein for soybean meal, which was at $6.48.

Merchandisers told DTN that with some plants still down for spring maintenance, some areas are lighter on supply, causing prices to move higher in those areas. Also, with the long Easter weekend behind us, buyers are coming back to the market to refresh their supplies. The recent strength in cash corn basis should help keep DDG competitive in feed rations. Informa Economics reported, "The relative prices to corn and soybean meal futures are well enough below their average levels to ensure that end users will keep inclusion rates near maximum levels."

P[L1] D[0x0] M[300x250] OOP[F] ADUNIT[] T[]

CIF NOLA (New Orleans, Louisiana) dried distillers grains with solubles, or DDGS, prices for the week ended April 20 were unchanged to down 1 cent for April at $121 to $123. May/June prices are steady at $122 to $125. Export demand has been flat with the most demand coming from Mexico. Merchandisers noted that since it is the "only game in town" as far as exports right now, all the sellers want a piece of the action.

Javier Chavez, U.S. Grains Council (USGC) Mexico marketing specialist, said in the April 20 USGC newsletter that the North America Free Trade Agreement has helped U.S. DDGS become available and accessible in southeastern Mexico. While DDGS is a well-known and frequently used feed source in northern Mexico, it does not benefit from the same recognition seen in the southeastern region of the country. Chavez explained that this substantial market is largely undeveloped due a lack of knowledge of superior feeding practices and inefficient distribution of feed ingredients. USGC has identified the need in this area for higher-quality feed and an opportunity to create demand for U.S. DDGS.

"Without the trade agreement," said Chavez, "it would be harder, and more expensive, to get U.S. DDGS to this market with fewer suppliers willing to sell it." USGC also noted that this win-win scenario for U.S. farmers and Mexican producers is built on a strong trading relationship that benefits from advantageous trade policy and robust market development. "The trading preferences in the North American Free Trade Agreement (NAFTA) have incentivized the integration of logistics on both sides of the border, and the Council's work in Mexico over the past 30 years has helped expand the use of U.S. grain products throughout the country."

CURRENT CURRENT CHANGE
COMPANY STATE 4/20/2017 4/6/2017
Bartlett and Company, Kansas City, MO (816-753-6300)
Missouri Dry $120 $120 $0
Modified $60 $60 $0
CHS, Minneapolis, MN (800-769-1066)
Illinois Dry $95 $95 $0
Indiana Dry $95 $95 $0
Iowa Dry $92 $92 $0
Michigan Dry $90 $90 $0
Minnesota Dry $90 $90 $0
North Dakota Dry $90 $90 $0
New York Dry $130 $130 $0
South Dakota Dry $90 $90 $0
MGP Ingredients, Atchison, KS (800-255-0302 Ext. 5253)
Kansas Dry $98 $100 -$2
POET Nutrition, Sioux Falls, SD (888-327-8799)
Indiana Dry $95 $90 $5
Iowa Dry $90 $90 $0
Michigan Dry $90 $90 $0
Minnesota Dry $90 $88 $2
Missouri Dry $108 $100 $8
Ohio Dry $92 $90 $2
South Dakota Dry $88 $85 $3
United BioEnergy, Wichita, KS (316-616-3521)
Kansas Dry $105 $105 $0
Wet $45 $45 $0
Illinois Dry $105 $105 $0
Nebraska Dry $105 $105 $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 $92 $0
Michigan Dry $95 $95 $0
Minnesota Dry $85 $85 $0
Nebraska Dry $100 $100 $0
New York Dry $120 $120 $0
North Dakota Dry $100 $100 $0
Ohio Dry $93 $93 $0
South Dakota Dry $85 $85 $0
Wisconsin Dry $90 $90 $0
Valero Energy Corp., San Antonio, TX (402-932-5901)
Indiana Dry $85 $90 -$5
Iowa Dry $90 $85 $5
Minnesota Dry $90 $85 $5
Nebraska Dry $105 $95 $10
Ohio Dry $95 $100 -$5
South Dakota Dry $85 $85 $0
California $155 $158 -$3
Western Milling, Goshen, California (559-302-1074)
California Dry $160 $160 $0
*Prices listed per ton.
Weekly Average $95 $94 $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

(AG/BAS/CZ)

P[L2] D[728x90] M[320x50] OOP[F] ADUNIT[] T[]

Comments

To comment, please Log In or Join our Community .