U.S. DDGS prices are down $2.50/MT this week as buyers remain quiet with Q4 needs already filled. The recent surge in ethanol production has created ample domestic supplies amid a seasonal slowdown in purchases. Soymeal prices continue to strengthen amid strong end-user demand, sending Kansas City prices up $17/MT this week. The Kansas City soymeal/DDGS ratio fell to 0.49 this week, down from 0.51 last week but above the 3-year average of 0.42. The DDGS/cash corn ratio slipped to 0.90 this week, down from 0.93 last week and below the 3-year average ratio of 1.09.
DDGS prices are mixed on the export market with Barge CIF NOLA and FOB NOLA offers rising this week. Barge rates are up $8-10/MT this week while FOB Gulf offers are up $7/MT for December positions and up $5-6/MT for Q1 2022. Brokers report Asian destinations remain quiet despite the recent pullback in freight values. The average offer price for 40-foot containers to Southeast Asia hit $350/MT for December/January shipment this week, down $8/MT from last week.
Please note that FOB Gulf markets will likely be more volatile than normal as the industry works to recover full capacity in New Orleans area export facilities. There are significant questions about elevation capacity and availability and the DDGS market will have to compete with other grains as the U.S. new crop harvest approaches. Consequently, both flat prices and spreads versus other markets may see greater than normal volatility.