DDGS values are mixed but slightly firmer this week with support still coming from the rally in soymeal futures. Last week’s strength in corn futures helped support DDGS values as well, but the market’s retreat this week has not yet exerted much downward pressure. Ethanol and DDGS production continue to trend above year-ago and five-year average levels amid strong production margins. The latest USDA Cattle on Feed report surprised the market with larger-than-expected placements and on-feed inventories, which has sparked a firmer tone in the cash market as Q4 and Q1 DDGS consumption now looks to be above year-ago levels.
The DDGS/cash corn ratio of 1.23 is above last week’s value and the three-year average of 1.02. The DDGS/soymeal ratio is steady with the prior week at 0.43, which is below the three-year average of 0.51.
Rates for DDGS delivered by rail to key U.S. locations are down $7-8/MT this week and reversed most of last week’s gains. Barge CIF NOLA DDGS offers are $12/MT higher this week as barge rates firm amid the seasonal influx of grain shipments down the Mississippi River. Spot offers for Barge CIF NOLA DDGS averaged $253/MT this week and the carries to December and January positions narrowed to $2/MT. FOB Gulf offers are up $10-11/MT with November at $259 while offers for 40-foot containers to Southeast Asia are up $6/MT at $300/MT for November shipment.