Market Matters Blog

Cold Weather, Tight Supplies Keeps DDG Prices Firm

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 $138 per ton, as extreme cold weather and recent holiday slowdowns have pushed prices higher. (DTN file photo by Elaine Shein)

OMAHA (DTN) -- The DTN average distillers dried grain (DDG) spot price from the 39 locations DTN collects bids from was $138 for the week ended Jan. 4, 4 cents higher than two weeks ago.

Based on the average of bids collected by DTN, the value of DDG relative to corn for the week ended Jan. 4 was at 110.08%, and the value of DDG relative to soybean meal was at 43.70%. The cost per unit of protein for DDG was $5.11, compared to the cost per unit of protein for soybean meal at $6.65.

Merchandisers noted that the market is higher in part due to the demand from the extreme cold blanketing much of the U.S. Also, because of the cold weather, the natural gas prices have spiked, causing plants to slow run times. Natural gas is what plants use to run their dryers and with weak margins, many plants are slowing down a little, and in turn, are not producing as much dry product that is needed to meet the demand right now.

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The U.S. Grains Council (USGC) said in its weekly price update that internationally, FOB Gulf prices are steady on holiday-reduced demand. "The average price for January shipment is $203/metric ton with February shipments $3/MT lower. Prices for March shipment are just under $200/MT as DDGS supplies should increase heading into the spring. Prices for 40-foot containers to Southeast Asia are $226.5/MT, $3 above the pre-holiday (Dec. 21, 2017) weekly average. Merchandisers are reporting prices to Vietnam are the strongest of Asian destinations, rising $6/MT from Dec. 21."

However, merchandisers told me that there are containers out east just sitting, unable to be shipped because of the snow and cold weather. One of the main issues is that the due to the temperatures being below freezing the past week in the southeast, containers cannot be fumigated because it is too cold. Vietnam requires temperatures (for this time of year) to be 50 to 59 degrees Fahrenheit for a minimum exposure period of five days.

CURRENT CURRENT CHANGE
COMPANY STATE 1/4/2018 12/21/2017
Bartlett and Company, Kansas City, MO (816-753-6300)
Missouri Dry $165 $150 $15
Modified $82 $75 $7
CHS, Minneapolis, MN (800-769-1066)
Illinois Dry $142 $140 $2
Indiana Dry $140 $138 $2
Iowa Dry $130 $128 $2
Michigan Dry $145 $140 $5
Minnesota Dry $130 $130 $0
North Dakota Dry $145 $145 $0
New York Dry $155 $135 $20
South Dakota Dry $137 $137 $0
MGP Ingredients, Atchison, KS (800-255-0302 Ext. 5253)
Kansas Dry $150 $145 $5
POET Nutrition, Sioux Falls, SD (888-327-8799)
Indiana Dry $145 $130 $15
Iowa Dry $128 $125 $3
Michigan Dry $140 $130 $10
Minnesota Dry $128 $125 $3
Missouri Dry $142 $140 $2
Ohio Dry $145 $130 $15
South Dakota Dry $135 $135 $0
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United BioEnergy, Wichita, KS (316-616-3521)
Kansas Dry $140 $140 $0
Wet $65 $65 $0
Illinois Dry $148 $148 $0
Nebraska Dry $140 $140 $0
Wet $65 $65 $0
U.S. Commodities, Minneapolis, MN (888-293-1640)
Illinois Dry $140 $140 $0
Indiana Dry $130 $130 $0
Iowa Dry $130 $130 $0
Michigan Dry $135 $125 $10
Minnesota Dry $125 $118 $7
Nebraska Dry $145 $145 $0
New York Dry $140 $140 $0
North Dakota Dry $145 $145 $0
Ohio Dry $135 $135 $0
South Dakota Dry $135 $125 $10
Wisconsin Dry $130 $130 $0
Valero Energy Corp., San Antonio, TX (402-932-5901)
Indiana Dry $135 $125 $10
Iowa Dry $130 $125 $5
Minnesota Dry $125 $120 $5
Nebraska Dry $145 $140 $5
Ohio Dry $135 $135 $0
South Dakota Dry $125 $120 $5
California $200 $195 $5
Western Milling, Goshen, California (559-302-1074)
California Dry $206 $208 -$2
*Prices listed per ton.
Weekly Average $138 $134 $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
California are not included in the averages.
VALUE OF DDG VS. CORN & SOYBEAN MEAL
Settlement Price: Quote Date Bushel Short Ton
Corn 1/4/2018 $3.5100 $125.36
Soybean Meal 1/4/2018 $315.80
DDG Weekly Average Spot Price $138.00
DDG Value Relative to: 1/5 12/21
Corn 110.08% 106.81%
Soybean Meal 43.70% 42.65%
Cost Per Unit of Protein:
DDG $5.11 $4.96
Soybean Meal $6.65 $6.61
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

(BAS/SK)

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