Market Matters Blog

DDG prices remained mostly steady, with a few spots slightly higher

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

The DTN average dried distillers grains, or DDG, spot price was unchanged from one weeks ago, at $95, for the week ended April 27. Of the 39 locations from which DTN collects spot prices, eight bids were $2 to $5 higher, two bids were $2 to $8 lower and the balance of the prices were unchanged.

The value of DDG relative to corn, based on those bids for the week ended April 27, was at 73.48% and the value of DDG relative to soybean meal was at 30.59%. 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 $6.54.

DDG prices have been firm with some locations posting better bids based on slightly tighter availability. Ethanol production remains below the million gallons a week growth we saw in prior weeks, as plants take spring maintenance downtimes. However, this has not made a huge impact on supplies in most places and merchandisers have said they aren't seeing many supply issues; maybe at a few spots that are down, but overall, supply is not a problem. It is likely runtimes will increase once maintenance work is done, especially if processor margins remain strong. This may cause a slight downturn in prices if supplies build up in the next few weeks, but if the price relative to corn and soymeal remains competitive, inclusion rates will likely stay at levels similar to what they are now.

CIF NOLA (New Orleans, Louisiana) dried distillers grains with solubles, or DDGS, prices for the week ended April 27 were up 3 cents for April at $124 to $126. May prices were up 2 cents to unchanged at $124 to $125. Export demand is flat, but U.S. Grains Council continues to educate new buyers about the benefits of U.S. DDGS. The grains council organized a DDGS conference in South Korea on April 25 to provide local millers with additional technical expertise and logistical support.

Ninety-six percent of feed millers in South Korea now include U.S. distiller's dried grains with solubles (DDGS) in their rations for the country's livestock and poultry industries, thanks in part to work started by the Grains Council the in 2004 to introduce this feed ingredient.

The Grains Council noted that, "South Korea purchases of U.S. DDGS continue to grow. South Korea imported nearly 845,000 metric tons of U.S. DDGS in the 2015/2016 marketing year, up from about 621,000 metric tons the prior year. In the first six months of the 2016/2017 marketing year (Sep. 2016-Feb. 2017), South Korea imported nearly 516,000 metric tons of U.S. DDGS, up 31 percent from the same time period the previous year."

The Council projects that South Korea will continue to increase its imports of U.S. DDGS with the improvement of inclusion rates and more efficient supply systems between U.S. suppliers and South Korean buyers.

CURRENT CHANGE
COMPANY STATE 4/27/2017 4/20/2017
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 $98 $0
POET Nutrition, Sioux Falls, SD (888-327-8799)
Indiana Dry $95 $95 $0
Iowa Dry $93 $90 $3
Michigan Dry $95 $90 $5
Minnesota Dry $93 $90 $3
Missouri Dry $110 $108 $2
Ohio Dry $92 $92 $0
South Dakota Dry $92 $88 $4
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 $100 $95 $5
Indiana Dry $90 $90 $0
Iowa Dry $95 $92 $3
Michigan Dry $95 $95 $0
Minnesota Dry $85 $85 $0
Nebraska Dry $95 $100 -$5
New York Dry $120 $120 $0
North Dakota Dry $92 $100 -$8
Ohio Dry $98 $93 $5
South Dakota Dry $85 $85 $0
Wisconsin Dry $90 $90 $0
Valero Energy Corp., San Antonio, TX (402-932-5901)
Indiana Dry $85 $85 $0
Iowa Dry $90 $90 $0
Minnesota Dry $90 $90 $0
Nebraska Dry $105 $105 $0
Ohio Dry $95 $95 $0
South Dakota Dry $85 $85 $0
California $155 $155 $0
Western Milling, Goshen, California (559-302-1074)
California Dry $166 $166 $0
*Prices listed per ton.
Weekly Average $95 $95 $0

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.

VALUE OF DDG VS. CORN & SOYBEAN MEAL
Settlement Price: Quote Date Bushel Short Ton
Corn 4/27/2017 $3.6200 $129.29
Soybean Meal 4/27/2017 $310.50
DDG Weekly Average Spot Price $95.00
DDG Value Relative to: 4/27 4/20
Corn 73.48% 74.35%
Soybean Meal 30.59% 30.85%
Cost Per Unit of Protein:
DDG $3.80 $3.80
Soybean Meal $6.54 $6.48
Notes:
Corn and soybean prices take from DTN Market Quotes. DDG price
represents the average spot price from Midwest companies
collected on Thursday afternoons. Soybean meal cost per unit
of protein is cost per ton divided by 47.5. DDG cost per unit
of protein is cost per ton divided by 25.

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

Follow her on Twitter @MaryCKenn

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