The market has strengthened from what was a flat start to the week. Prices increased in Chicago; Savannah, Georgia; and the barge market. Barge prices were $2/MT higher this week and Chicago prices were $5-10 higher as well. FOB Gulf prices increased this week as international demand picked up.
Merchandisers are reporting June FOB Gulf shipments are becoming increasingly tight. Several are confirming trades in the low $160s and note that quotes below $155 are increasingly unrealistic. Steady/stronger demand and the final impacts of the spring maintenance closures are responsible for the market tightness.
Southeast Asian buyers were active purchasers this week following weeks of subdued inquiries. Traders sold loads to Korea for June shipment and Malaysia for LH June/FH July shipment. Shipments to Korea are up 83 percent YTD while Malaysia has imported 3 percent more DDGS.
Merchandisers are reporting increasing inquiries from Bangladesh, which is a small but growing market for U.S. DDGS. In 2016, the U.S. shipped 38,900 MT to Bangladesh, which was a 579 percent change from the prior year. So far in 2017 (latest data through March), U.S. DDGS exports to Bangladesh have totaled 17,800 MT, up 14 percent from this time last year.
Higher DDGS prices boosted the relative price of DDGS to corn, moving the market to 85 percent of cash corn values and 96 percent of FOB Gulf corn. DDGS carry a $2.01 per-protein unit cost advantage against Kansas City soybean meal and a $0.94 per-protein unit advantage against FOB Gulf soybean meal. Both figures are down from the prior week.