Market Matters Blog

DDG Prices Sharply Higher

Mary Kennedy
By  Mary Kennedy , DTN Basis Analyst
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DTN's average weekly spot price for DDG was 4 cents higher at $117 per ton, thanks in part to an announcement by China overnight on Nov. 9. (DTN file photo by Elaine Shein)

OMAHA (DTN) -- The U.S. Grains Council (USGC) reported Nov. 9 that an announcement was posted on China's Ministry of Foreign Affairs' website that the country would again allow U.S. distiller's dried grains with solubles (DDGS) to be imported without charging an 11% value added tax (VAT), potentially altering global DDGS market dynamics for the better.

However, while the VAT has been removed, the anti-dumping and countervailing duties remain. But it's a start in the right direction.

The DTN average dried distillers grains (DDG) spot price from the 39 locations DTN collects bids from was $117 for the week ended Nov. 9, 4 cents higher from two weeks ago. Merchandisers noted that markets have been climber higher as demand is firming with the recent onset of colder temperatures, especially this week in parts of the U.S. where winter is expected to make an appearance through the weekend.

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However, some merchandisers were in agreement that support for prices came from the China news. One merchandiser told me the China announcement "priced itself in this week," moving the market higher on top of the strength seen in the domestic market the past few weeks.

Based on the average of bids collected by DTN, the value of DDG relative to corn for the week ended Nov. 9 was at 95.93%, and the value of DDG relative to soybean meal was at 37.52%. The cost per unit of protein for DDG was $4.33, compared to the cost per unit of protein for soybean meal at $6.56.

CURRENT PREVIOUS CHANGE
COMPANY STATE 11/8/2017 10/26/2017
Bartlett and Company, Kansas City, MO (816-753-6300)
Missouri Dry $132 $125 $7
Modified $68 $65 $3
CHS, Minneapolis, MN (800-769-1066)
Illinois Dry $118 $115 $3
Indiana Dry $117 $115 $2
Iowa Dry $116 $110 $6
Michigan Dry $112 $110 $2
Minnesota Dry $118 $110 $8
North Dakota Dry $128 $120 $8
New York Dry $122 $120 $2
South Dakota Dry $118 $110 $8
MGP Ingredients, Atchison, KS (800-255-0302 Ext. 5253)
Kansas Dry $128 $125 $3
POET Nutrition, Sioux Falls, SD (888-327-8799)
Indiana Dry $120 $110 $10
Iowa Dry $117 $105 $12
Michigan Dry $120 $110 $10
Minnesota Dry $115 $105 $10
Missouri Dry $125 $115 $10
Ohio Dry $120 $110 $10
South Dakota Dry $115 $105 $10
` `
United BioEnergy, Wichita, KS (316-616-3521)
Kansas Dry $140 $118 $22
Wet $60 $50 $10
Illinois Dry $0 $0 $0
Nebraska Dry $140 $118 $22
Wet $60 $50 $10
U.S. Commodities, Minneapolis, MN (888-293-1640)
Illinois Dry $120 $115 $5
Indiana Dry $110 $110 $0
Iowa Dry $118 $110 $8
Michigan Dry $110 $110 $0
Minnesota Dry $115 $110 $5
Nebraska Dry $135 $125 $10
New York Dry $125 $125 $0
North Dakota Dry $130 $115 $15
Ohio Dry $115 $110 $5
South Dakota Dry $120 $110 $10
Wisconsin Dry $115 $110 $5
Valero Energy Corp., San Antonio, TX (402-932-5901)
Indiana Dry $115 $110 $5
Iowa Dry $112 $110 $2
Minnesota Dry $115 $110 $5
Nebraska Dry $128 $125 $3
Ohio Dry $118 $115 $3
South Dakota Dry $105 $105 $0
California $188 $180 $8
Western Milling, Goshen, California (559-302-1074)
California Dry $0 $0 $0
*Prices listed per ton.
Weekly Average $117 $113 $4
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
VALUE OF DDG VS. CORN & SOYBEAN MEAL
Settlement Price: Quote Date Bushel Short Ton
Corn 11/9/2017 $3.4150 $121.96
Soybean Meal 11/9/2017 $311.80
DDG Weekly Average Spot Price $117.00
DDG Value Relative to: 11/9 10/26
Corn 95.93% 90.27%
Soybean Meal 37.52% 36.20%
Cost Per Unit of Protein:
DDG $4.33 $4.19
Soybean Meal $6.56 $6.57
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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