The softer tone which permeated the DDGS market at the start of the week has firmed, with merchandisers reporting increased buying interest when FOB vessel prices dip below $150/MT. Prices for FOB Gulf DDGS increased $1/MT this week to $146, moving the DDGS/corn price ratio above 90 percent for the first time in two weeks. Prices for 40-foot containers to Southeast Asia were largely steady this week, except for those destined to Japan where prices increased $13/MT for April delivery. Prices to Vietnam were $5-8/MT higher as well. Finally, CNF containers to Southeast Asia from NOLA were quoted at $199/MT, up $5 for the week.
Movement of DDGS onto the export market is limited and suppliers are sending product to river markets at significantly better values than it can be put into shipping containers. Traders are reporting an $8/ton spread in the domestic market on trucks and a $12/MT spread on export business to Southeast Asia. Demand from this region has been limited as buyers work through their current inventories. Even so, steadiness in NOLA bulk prices brought support to the container market, noted above. While some further increase in demand is possible in the second quarter, expected freight rate increases maket for unattractive forward quotes.
In the U.S., FOB plant prices were softer again this week as increases in ethanol production prevented any supply drawdown. Still, softer pricing allowed DDGS to regain some pricing advantage against soybean meal and the per-protein unit cost advantaged held by DDGS increased above $3 this week. Looking forward, increased buying interest should buoy prices but if ethanol production continues to rise contrary to its seasonal decrease, the additional supply may limit upward price momentum.