Pricing strength has returned to the DDGS market. Ethanol plants sold most of their September inventories last week and, in the face of tightening supplies, domestic prices have risen. Barge CIF NOLA prices rose again after last week’s pause in the market, gaining $1.50/MT to reach $161.50/MT. FOB U.S. Gulf DDGS prices did not follow in lock step, falling $3/MT to $174/MT as international interest waned in the face of higher prices. Merchandisers are defending asking prices, however, despite trades being completed at the low end of current values.
Merchandisers are reporting “difficult” container sales on the international front this week as overseas buying interest is not yet ready to follow U.S. prices higher. Prices for 40-foot containers to Southeast Asia increased $1/MT this week, on average, reaching $193.30/MT. August shipments to the Philippines rose $7/MT while those to Indonesia rose $2/MT. Other August shipment prices were largely steady. For September shipment, price increases were noted for almost every route.
Domestically, DDGS are priced at 95 percent of cash corn values and 38 percent of soybean meal, both down modestly from the week prior. The per-protein unit cost analysis favors DDGS by a $1.80/unit margin this week, equal to last week’s value.
The latest export data from USDA FAS shows June U.S. DDGS exports rose nearly 20 percent from May. June’s exports reached 889,114 MT which was lower than the volume shipped in June 2016. Mexico was the largest buyer in June, taking 175,000 MT, followed by South Korea (which imported 123,000 MT).