DDGS prices have stabilized this week with buyers having filled nearterm needs and not wanting to chase the market higher. Barge CIF NOLA prices fell only $0.50/MT this week while FOB Gulf prices climbed $1/MT. Part of the reason for the slowdown is reduced Midwest feed demand, driven by warmer weather this week. Oddly, the Chicago market is reported as lagging other markets’ gains, though explanatory reasons are few. Internationally, 40-foot container prices to Vietnam jumped $14/MT this week for March shipment while those to Japan climbed $9/MT. Other Southeast Asia destinations experienced smaller pricing gains, rising $1/MT on average.
Soybean meal futures have retreated this week which is limiting merchandizers’ ability to ask for higher DDGS prices. The downturn in soybean meal prices reduced the per-protein unit advantage of DDGS, though the ethanol co-product retains a $1.60 advantage FOB U.S. Gulf. Additionally, traders are reporting tightness in equipment from the Chinese New Year slowdown that is typical for this time of year. The growth in U.S. ethanol stocks and deteriorating margins will likely increase ethanol plant downtime in the near future, helping reduce DDGS supplies and supporting prices.