Market Matters Blog

Vietnam Lifts Suspension of US DDGS Imports

Mary Kennedy
By  Mary Kennedy , DTN Basis Analyst
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DTN's average weekly spot price for DDG was 1 cent lower at $106 per ton, but news of Vietnam lifting its import ban will likely lift prices in the coming week. (DTN file photo by Elaine Shein)

OMAHA (DTN) -- Vietnam will lift its suspension of U.S. distillers dried grains with solubles (DDGS) imports and ease fumigation requirements for U.S. corn and wheat imports, U.S. Grains Council President and CEO Tom Sleight told DTN on Friday.

In an official press release Friday, Sleight said, "We are very pleased to hear the news from Vietnam overnight that, as of today, import permits will be issued for U.S. DDGS and new phosphine fumigation protocols will be acceptable for shipments of U.S. corn, DDGS and wheat."

"Since the suspension on imports was put in place late last year, our staff has worked closely with industry and government both here in the United States and in Vietnam to find a resolution to this issue. This intense effort was strongly supported by the U.S. Department of Agriculture's (USDA's) leadership, officials in its Animal and Plant Health Inspection Service (APHIS) and the Office of the U.S. Trade Representative (USTR)," added Sleight.

"While we never want to see a market closed to our products for any reason, this was an example of how to effectively and comprehensively tackle a scientific challenge impeding trade flows. It was also a reminder of the importance of strong trade policy. Vietnam is one of the fastest-growing feed markets in the world, and the disruptions and losses this issue caused reinforce the need for agreements that ensure open access and outline resolution processes for mutual concerns," he said.

USGC thanked U.S. and Vietnam government officials and industries in both countries for their collaboration on resolving the issue.

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The news should help boost the U.S. DDG market, which has seen prices slump in the past few weeks.

The DTN average dried distillers grains (DDG) spot price from the 39 locations DTN collects bids from was $106 for the week ended Aug. 31, 1 cent lower on average from one week ago.

Based on the average of bids collected by DTN, the value of DDG relative to corn for the week ended Aug. 31 was at 86.72%, and the value of DDG relative to soybean meal was at 36.01%. The cost per unit of protein for DDG was $3.93, compared to the cost per unit of protein for soybean meal at $6.20.

Merchandisers noted again that the California market is feeling weak. Truck markets elsewhere have been mostly steady, but there were a few changes this week. The cash corn price has been dropping most of the week, but did see some recovery on Thursday.

CIF NOLA (New Orleans, Louisiana) DDGS prices weakened in the past week with August at $139 to $146, and September at $138 to $143. Barge movement slowed down after late July early August push, but if anything was trying to move the past week or next week, they will face slowdowns due to a major lock closure in the UMR.

On Wednesday, the Mel Price lock was closed, delaying all shipments to and from the Upper Mississippi River and Illinois River. At this point, the USACE has not given an estimate on the length of the closure, but they have indicated this closure could be several days. On top of that, repairs at the LaGrange Lock on the Illinois River is causing delays in each direction due to work being performed on the lock chamber.

CURRENT PREVIOUS CHANGE
COMPANY STATE 8/31/017 8/24/017
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 $115 $115 $0
Indiana Dry $110 $110 $0
Iowa Dry $105 $110 -$5
Michigan Dry $100 $105 -$5
Minnesota Dry $103 $105 -$2
North Dakota Dry $110 $115 -$5
New York Dry $120 $120 $0
South Dakota Dry $105 $105 $0
MGP Ingredients, Atchison, KS (800-255-0302 Ext. 5253)
Kansas Dry $105 $108 -$3
POET Nutrition, Sioux Falls, SD (888-327-8799)
Indiana Dry $108 $108 $0
Iowa Dry $105 $108 -$3
Michigan Dry $105 $105 $0
Minnesota Dry $105 $108 -$3
Missouri Dry $112 $120 -$8
Ohio Dry $108 $108 $0
South Dakota Dry $100 $103 -$3
` `
United BioEnergy, Wichita, KS (316-616-3521)
Kansas Dry $114 $114 $0
Wet $45 $45 $0
Illinois Dry $122 $125 -$3
Nebraska Dry $114 $114 $0
Wet $45 $45 $0
U.S. Commodities, Minneapolis, MN (888-293-1640)
Illinois Dry $110 $110 $0
Indiana Dry $103 $103 $0
Iowa Dry $103 $103 $0
Michigan Dry $100 $100 $0
Minnesota Dry $100 $100 $0
Nebraska Dry $102 $102 $0
New York Dry $120 $120 $0
North Dakota Dry $100 $100 $0
Ohio Dry $105 $105 $0
South Dakota Dry $100 $100 $0
Wisconsin Dry $105 $105 $0
Valero Energy Corp., San Antonio, TX (402-932-5901)
Indiana Dry $105 $105 $0
Iowa Dry $105 $105 $0
Minnesota Dry $105 $105 $0
Nebraska Dry $108 $108 $0
Ohio Dry $110 $110 $0
South Dakota Dry $95 $95 $0
California $172 $172 $0
Western Milling, Goshen, California (559-302-1074)
California Dry $176 $176 $0
*Prices listed per ton.
Weekly Average $106 $107 -$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.

VALUE OF DDG VS. CORN & SOYBEAN MEAL
Settlement Price: Quote Date Bushel Short Ton
Corn 8/31/2017 $3.4225 $122.23
Soybean Meal 8/31/2017 $294.30
DDG Weekly Average Spot Price $106.00
DDG Value Relative to: 8/31 8/24
Corn 86.72% 87.60%
Soybean Meal 36.01% 35.95%
Cost Per Unit of Protein:
DDG $3.93 $3.96
Soybean Meal $6.20 $6.27
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 27.

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

Follow Mary Kennedy on Twitter @MaryCKenn

(CZ)

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