DTN Distillers Grain Weekly Update
12 Aug 2016
By Mary Kennedy
DTN Cash Grains Analyst
The DTN average DDG weekly spot price was unchanged in the past week at $121 per ton. Of the 37 locations DTN collects spot prices from, three locations showed increases from last week's prices, 12 locations reported decreases between $5 and $7 per ton, and the balance of locations were unchanged. A few merchandisers told me DDG values were for the most part, pretty steady this week with not much trade ahead of the USDA report on Friday.
DDG prices remain under pressure from lower corn and soybean meal prices because both compete with DDG as a protein source in livestock rations along with competition from other protein feed products. DDG prices need to stay competitive or may see a decline in inclusion rates in feed products. A merchandiser told me buyers are coming to market on an as-needed basis for product as they watch the corn price move lower, hoping their next purchase will be cheaper.
An increase in plant production has added pressure to DDG prices because in some markets, supplies increased and demand right now is flat, especially after the return of hot weather this past week. The EIA report Wednesday estimated ethanol production was up from the previous week at 1,018,000 barrels per day, the second largest on record. Lower DDG prices are not helping ethanol plant margins. Informa Economics reported that central Illinois' margin was at $0.19 per gallon as of Aug. 3, after having been $0.44 per gallon in early July. Other locations ranged from $0.17 to $0.25 per gallon.
CIF NOLA bids were mostly steady Thursday compared to one week ago. Demand has slowed for barges as Gulf export demand slowed and offers for containerized DDGs became more competitive the past week in hope of attracting more business. Some of this weakness is due to abundant supplies, as well as China's antidumping case hanging over the head of U.S. DDG exporters.
The value of DDG relative to corn this week was unchanged at 105% and the value of DDG relative to soybean meal was higher at 36.24% vs. 35.99% last week. The cost per unit of protein for DDG was at $4.84 this week, compared to the cost per unit of protein for soybean meal at $7.03.
| CURRENT | PREVIOUS |
| COMPANY | STATE | 8/11/2016 | 8/4/2016 | CHANGE |
| Bartlett and Company, Kansas City, MO (816-753-6300) |
| Missouri | Dry | $140 | $150 | -$10 |
| | Modified | $65 | $60 | $5 |
| CHS, Minneapolis, MN (800-769-1066) |
| Illinois | Dry | $130 | $135 | -$5 |
| Indiana | Dry | $125 | $127 | -$2 |
| Iowa | Dry | $115 | $110 | $5 |
| Michigan | Dry | $130 | $130 | $0 |
| Minnesota | Dry | $110 | $110 | $0 |
| North Dakota | Dry | $105 | $105 | $0 |
| New York | Dry | $120 | $110 | $10 |
| South Dakota | Dry | $105 | $105 | $0 |
| MGP Ingredients, Atchison, KS (800-255-0302 Ext. 5253) |
| Kansas | Dry | $120 | $120 | $0 |
| POET Nutrition, Sioux Falls, SD (888-327-8799) |
| Indiana | Dry | $128 | $135 | -$7 |
| Iowa | Dry | $115 | $120 | -$5 |
| Michigan | Dry | $120 | $125 | -$5 |
| Minnesota | Dry | $110 | $115 | -$5 |
| Missouri | Dry | $135 | $135 | $0 |
| Ohio | Dry | $135 | $135 | $0 |
| South Dakota | Dry | $115 | $115 | $0 |
| United BioEnergy, Wichita, KS (316-616-3521) |
| Kansas | Dry | $118 | $118 | $0 |
| | Wet | $40 | $40 | $0 |
| Illinois | Dry | $145 | $150 | -$5 |
| Nebraska | Dry | $118 | $118 | $0 |
| | Wet | $40 | $40 | $0 |
| U.S. Commodities, Minneapolis, MN (888-293-1640) |
| Illinois | Dry | $130 | $130 | $0 |
| Indiana | Dry | $125 | $125 | $0 |
| Iowa | Dry | $115 | $115 | $0 |
| Michigan | Dry | $120 | $125 | -$5 |
| Minnesota | Dry | $105 | $110 | -$5 |
| Nebraska | Dry | $110 | $110 | $0 |
| New York | Dry | $120 | $125 | -$5 |
| North Dakota | Dry | $120 | $120 | $0 |
| Ohio | Dry | $120 | $120 | $0 |
| South Dakota | Dry | $110 | $110 | $0 |
| Wisconsin | Dry | $115 | $120 | -$5 |
| Valero Energy Corp., San Antonio, TX (402-727-5300) |
| Indiana | Dry | $125 | $125 | $0 |
| Iowa | Dry | $110 | $115 | -$5 |
| Minnesota | Dry | $105 | $110 | -$5 |
| Nebraska | Dry | $110 | $110 | $0 |
| Ohio | Dry | $130 | $135 | -$5 |
| South Dakota | Dry | $105 | $110 | -$5 |
| California | $175 |
| Western Milling, Goshen, California (559-302-1074) |
| California | Dry | $185 | $185 | $0 |
| *Prices listed per ton. |
| Weekly Average | | $121 | $121 | $0 |
| 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 | 8/11/2016 | $3.2100 | $114.64 |
| Soybean Meal | 8/11/2016 | $333.90 |
| DDG Weekly Average Spot Price | $121.00 |
| DDG Value Relative to: | 8/11 | 8/4 | 7/31 |
| Corn | 105.55% | 105.05% | 129.67% |
| Soybean Meal | 36.24% | 35.99% | 45.05% |
| Cost Per Unit of Protein: |
| DDG | $4.84 | $4.84 | $8.16 |
| Soybean Meal | $7.03 | $7.09 | $9.53 |
| 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 25. |
Mary Kennedy can be reached at mary.kennedy@dtn.com
Follow Mary Kennedy on Twitter @MaryCKenn
(SK)
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