Trade One key feature of commodity markets is that they are a “zerosum game.” Someone wins at someone else’s loss and only one of two opposing views can be right. This dichotomy was prevalent in the DDGS market this week: buyers are sitting tight, waiting for softer prices as the weather warms, while sellers are defending offers in anticipation of week-long “turnarounds” heading in to April and May. Consequently, the market was quiet and featured infrequent, lowvolume trading. Only time will tell which of these views will ultimately prove correct, but last year’s two-month-long bullish move started in April.
FOB NOLA DDGS prices remain competitive against FOB soybean meal, priced at 41 percent of soybean meal. This equates to a $1.55 per protein-unit cost advantage for DDGS on the export market. FOB corn prices came under pressure from Brazil this week which pressured FOB Gulf DDGS lower by $2/MT. The value of FOB DDGS versus FOB corn was down slightly but basically unchanged at 90 percent. Barge rates were essentially unchanged this week (down $1/MT) in line with price signals from the Gulf.
CNF Prices for 40-foot containers to Southeast Asia were higher this week, climbing $3/MT. Prices for containers destined for Vietnam rose $6/MT while product destined for Taiwan increased $3/MT. The forward curve for internationally-destined DDGS is looking stronger with prices for April, May, and June shipment all increasing ($1/MT on average). If FOB Gulf prices attract significant buying attention near $150/MT, it seems CNF prices to Southeast Asia have done the same at $175/MT