Market Matters Blog

The DTN average dried distillers grains, or DDG, spot price was unchanged from one week ago, at $97, for the week ended June 1. Of the 39 locations from which DTN collects spot prices, six bids were $1 to $5 higher, three bids were $2 to $10 lower, and the balance of the prices were unchanged.

The value of DDG relative to corn, based on those bids for the week ended June 1, was at 73.31%, and the value of DDG relative to soybean meal was at 32.60%. The cost per unit of protein for DDG was at $3.88, compared to the cost per unit of protein for soybean meal, at $6.26.

Some merchandisers told me that spot prices were soft as the market was seeing slow demand this week, possibly due to some end users making sure they had enough supply over the long weekend. Runtimes are back to normal now that spring maintenance has been completed. End users aren't buying much deferred as they anticipate prices may go lower if supplies build. Also, the DDG market is faced with competition from other feed ingredients that are as good of a value as DDG in rations.

CIF NOLA (New Orleans, Louisiana) dried distillers grains with solubles, or DDGS, prices for the week ended June 1 were $129 to $132 for June, and July prices were at $129 to $131. Informa Economics reported that, "Exports from September through March are up 6% compared to last year's pace. Exports to China for this timeframe are roughly a third of year-ago results. Mexico is the largest export market, which has grown 12% compared to last year."

The U.S. Grains Council (USGC) reported that the prime minister and ag minister from Vietnam are currently in the U.S. and will meet with APHIS. At issue, of course, is the suspension of U.S. DDGS imports in to Vietnam due to a difference of opinion between APHIS and Vietnam's Plant Protection Department (PPD) as to what chemical will be acceptable for fumigation. On May 8, 2017, the PPD responded to a proposal sent by APHIS on March 23.

USGC reported to their members that no confirmation of the lifting of the methyl bromide requirement for corn and wheat has been received. "APHIS says that the only way to confirm the change is to see an import permit from the buyer. If the import permit is silent on fumigation, then APHIS will certify if fumigated with Phosphine using either the recirculation system defined in the FGIS Fumigation Handbook or the container fumigation procedure as defined for containerized DDG. However, until an import permit is received, APHIS cannot confirm a change in protocol." DDGS shippers are hoping that the meeting this week may bring the situation closer to a solution agreeable to both parties.

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

Follow her on Twitter @MaryCKenn

(BAS/AG)

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