DDG Weekly Update
5 Aug 2016
By Mary Kennedy
DTN Cash Grains Analyst
Concern over China's next move on the anti-dumping investigation against the U.S and weaker corn prices pushed DDG prices lower this week.
The DTN average weekly spot price average fell $14 per ton since July 22 to $121 this week. Of the 36 Midwestern locations DTN collects spot prices from, all but one location reported spot prices decreased between $5 and $26 per ton in the past two weeks. As one merchandiser put it, it's a slow grind down.
DDG prices continue to be under pressure from lower corn and soybean meal prices. Both compete with DDG as a protein source in livestock rations so DDG prices need to be competitive to stay in rations. The recent heat wave did not help demand either. A merchandiser told me that a feed mill he does business with said tonnages were down because of the hot weather.
Another factor is that there is plenty of supply at plants as ethanol production has been steady week-over-week. Wednesday's EIA report showed that as of July 29 plant production increased 0.6% for an increase of 4.5% year-over-year.
CIF NOLA bids were lower Thursday with August down 3 to 4 cents and September down 1 to 3 cents. Container movement for export has been steady but slower since the end of July. Some of that can be due to oversupply causing cheaper prices as well as concern over what China will do next as it pertains to penalizing U.S. DDG exports.
As far as China's anti-dumping investigation which started on August 2 in Beijing, no decision has been made yet with expectations they will make it in mid-September. One merchandiser told me he really didn't know if it will make a lot of difference since they have so much corn in inventory.
The value of DDG relative to corn this week dropped to 105% vs. 113% vs. two weeks ago and the value of DDG relative to soybean meal was lower at 36% vs. 38% two weeks ago. The cost per unit of protein for DDG was about $4.84 this week, compared to the cost per unit of protein for soybean meal at $6.94.
CURRENT SPOT PRICES
| CURRENT | PREVIOUS |
| COMPANY | STATE | 8/4/2016 | 7/22/2016 | CHANGE |
| Bartlett and Company, Kansas City, MO (816-753-6300) |
| Missouri | Dry | $150 | $155 | -$5 |
| | Modified | $60 | $67 | -$7 |
| CHS, Minneapolis, MN (800-769-1066) |
| Illinois | Dry | $135 | $140 | -$5 |
| Indiana | Dry | $127 | $140 | -$13 |
| Iowa | Dry | $110 | $130 | -$20 |
| Michigan | Dry | $130 | $140 | -$10 |
| Minnesota | Dry | $110 | $125 | -$15 |
| North Dakota | Dry | $105 | $120 | -$15 |
| New York | Dry | $110 | $145 | -$35 |
| South Dakota | Dry | $105 | $120 | -$15 |
| Hawkeye Gold, IA (515-663-6413) |
| Iowa | Dry | NA | NA | #VALUE! |
| | Modified | NA | NA | #VALUE! |
| MGP Ingredients, Atchison, KS (800-255-0302 Ext. 5253) |
| Kansas | Dry | $120 | $130 | -$10 |
| POET Nutrition, Sioux Falls, SD (888-327-8799) |
| Indiana | Dry | $135 | $150 | -$15 |
| Iowa | Dry | $120 | $130 | -$10 |
| Michigan | Dry | $125 | $130 | -$5 |
| Minnesota | Dry | $115 | $125 | -$10 |
| Missouri | Dry | $135 | $145 | -$10 |
| Ohio | Dry | $135 | $155 | -$20 |
| South Dakota | Dry | $115 | $125 | -$10 |
| United BioEnergy, Wichita, KS (316-616-3521) |
| Kansas | Dry | $118 | $127 | -$9 |
| | Wet | $40 | $30 | $10 |
| Illinois | Dry | $150 | $150 | $0 |
| Nebraska | Dry | $118 | $127 | -$9 |
| | Wet | $40 | $30 | $10 |
| U.S. Commodities, Minneapolis, MN (888-293-1640) |
| Illinois | Dry | $130 | $155 | -$25 |
| Indiana | Dry | $125 | $145 | -$20 |
| Iowa | Dry | $115 | $135 | -$20 |
| Michigan | Dry | $125 | $145 | -$20 |
| Minnesota | Dry | $110 | $130 | -$20 |
| Nebraska | Dry | $110 | $115 | -$5 |
| New York | Dry | $125 | $155 | -$30 |
| North Dakota | Dry | $120 | $125 | -$5 |
| Ohio | Dry | $120 | $145 | -$25 |
| South Dakota | Dry | $110 | $115 | -$5 |
| Wisconsin | Dry | $120 | $140 | -$20 |
| Valero Energy Corp., San Antonio, TX (402-727-5300) |
| Indiana | Dry | $125 | $145 | -$20 |
| Iowa | Dry | $115 | $130 | -$15 |
| Minnesota | Dry | $110 | $130 | -$20 |
| Nebraska | Dry | $110 | $125 | -$15 |
| Ohio | Dry | $135 | $150 | -$15 |
| South Dakota | Dry | $110 | $125 | -$15 |
| Western Milling, Goshen, California (559-302-1074) |
| California | Dry | $185 | $195 | -$10 |
| *Prices listed per ton. |
| Weekly Average | | $121 | $135 | -$14 |
| 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 | 8/4/2016 | $3.2075 | $114.55 |
| Soybean Meal | 8/4/2016 | | $329.70 |
| DDG Weekly Average Spot Price | | | $121.00 |
| DDG Value Relative to: | 8/4 | 7/22 | 7/15 |
| Corn | 105.63% | 113.09% | 106.67% |
| Soybean Meal | 36.70% | 38.30% | 36.19% |
| Cost Per Unit of Protein: |
| DDG | $4.84 | $5.40 | $5.52 |
| Soybean Meal | $6.94 | $7.42 | $8.03 |
| Notes: |
| Corn and soybean prices taken 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 25. |
Mary Kennedy can be reached at mary.kennedy@dtn.com
Follow Mary Kennedy on Twitter @MaryCKenn
(AG/CZ)
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