Market Matters Blog

OMAHA (DTN) -- The domestic distillers dried grains (DDG) average spot price from the 40 locations DTN contacted was steady on average this week versus the prior week, at $121 per ton for the week ended May 16. Prices were mixed and the strength in the corn market at the end of the week was supportive.

DDG prices may find pressure if the corn market reverses lower as ethanol plant production continues to rise while demand slows. However, with delays in corn planting continuing as heavy rain falls on already soaked fields in Midwest over the next seven days, it is unlikely corn prices will fade.

The EIA said Wednesday that during the week ended May 10, ethanol plant production ramped up 15,000 barrels per day (bpd), or 1.4%, to 1.0151 million bpd, the fourth highest weekly output rate in 2019, while 7,000 bpd less than a year ago.

Based on the average of prices collected by DTN, the value of DDG relative to corn for the week ended May 16 was at 89.39% and is below the five-year average. The value of DDG relative to soybean meal was at 40.08%. The cost per unit of protein for DDG was $4.48, compared to the cost per unit of protein for soybean meal at $6.36.

The flooding along the Mississippi River has been plaguing sellers who ship DDGS for export on the river down to the Gulf. The St. Louis Harbor opened on May 16, along with most of the locks above there that had been closed because of flooding. The USACE in St. Paul has noted shoaling is creating problems above mile 615, closing parts of the river to be dredged. The Lower Mississippi River in to the Gulf is still in flood stage, and expectations are this will continue in to June, as more rain this weekend will add to the high water.

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

Follow her on Twitter @MaryCKenn

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