DDGS prices are unchanged from last week, with lack of news limiting the market’s activity. Merchandisers are reporting broken locks on the Ohio river and low water in the Mississippi are forcing DDGS off the water and into rail cars. Accordingly, rail rates are rising quickly for regions upriver. DDGS prices for product delivered via rail to the PNW, California, or Laredo, TX are $5-6/MT higher this week.
Merchandisers noted some buying interest as DDGS came under pressure from the corn market’s WASDE-induced turn lower, but limited near-term supplies are supporting pricing. Ethanol plants are still in the seasonal fall maintenance schedule which is keeping supplies low.
On the international front, higher ocean freight rates are pushing the threat of a general rate increase (GRI) from October to November. Traders are reporting current pricing is limiting demand for forward tonnage. Prices for 40-foot containers to Southeast Asia averaged $198.5/MT this week, a gain of $2/MT higher, with prices for product sent to Japan and Shanghai, China leading the way.
FOB ethanol plant prices are steady with last week and are priced at 103 percent of cash corn values. This valuation is up 5 percent from the prior week as corn prices have weakened. Strength in the soybean meal market, however, has left DDGS more competitive against that feed ingredient and the ethanol co-product is valued at 38 percent of soybean meal. DDGS retain a $1.66 per-protein unit cost advantage against soybean meal, down from last week.