Distillers Dried Grains with Solubles (DDGS)
DDGS Comments: All DDGS markets moved up in price this past week, likely pulled by higher corn and soymeal pricing. Prices had dropped below the value of corn at the Gulf, but that was not sustainable. DDGS priced less than corn compels compounders to boost DDGS to maximum inclusion rates. For the first time in many weeks not a single position was in decline. The overall average increase was $17/container, but Jakarta for May delivery was plus-$28, and Asia deliveries overall were higher as they caught up with FOB Gulf pricing that began to feel the tighter market first.
There is even more potential in the market but there are also hurdles. India needs more plant proteins like DDGS for its livestock sector but the government has yet to liberalize its GM import policy. As a result, feed ingredients next door in Bangladesh are substantially cheaper.
Ethanol Comments: The Energy Information Administration (EIA) reduced the estimated stocks of ethanol to 22.05 million barrels (-1.2 percent) even as production increased by 1,000 barrels per day to 939,000 barrels per day.
The margin between the corn price and the value of ethanol and coproducts continued its climb upward in key markets (see below) with Nebraska coming close to matching the level of a year ago.
- Illinois differential is $1.65 per bushel, in comparison to $1.60 the prior week and $2.38 a year ago.
- Iowa differential is $1.72 per bushel, in comparison to $1.53 the prior week and $2.00 a year ago.
- Nebraska differential is $1.85 per bushel, in comparison to $1.71 the prior week and $1.89 a year ago.
- South Dakota differential is $1.94 per bushel, in comparison to $1.90 the prior week and $2.19 a year ago.