U.S. DDGS prices are down $1.60/MT this week, despite seasonal reductions in ethanol run rates for plant maintenance. Brokers report rising barge freight rate is pushing more product into the domestic market. Kansas City soymeal prices are steady this week, putting the DDGS/Kansas City soymeal ratio at 0.56, unchanged from last week and above the three year-average of 0.47. The DDGS/cash corn ratio is higher this week at 1.03, up from 1.01 last week but below the three-year average of 1.10.
On the export market, DDGS values are slightly lower this week though the reasoning remains unclear. Barge CIF NOLA offers are down $2 for spot positions and $5-6 for deferred while FOB Gulf offers are down $5-7/MT at $260 for October/November shipment.
At the same time, brokers report strong demand from Southeast Asia with “buyers chasing values higher”. Offers for 40-foot containers to Southeast Asia are up $10/MT on average this week at $346/MT.
Please note that FOB Gulf markets will likely be more volatile than normal as the industry works to recover full capacity in New Orleans area export facilities. There are significant questions about elevation capacity and availability and the DDGS market will have to compete with other grains as the U.S. new crop harvest approaches. Consequently, both flat prices and spreads versus other markets may see greater than normal volatility.