Distillers Dried Grains with Solubles (DDGS)
DDGS Comments: The DDGS market has been active this week with buyers in Southeast Asia looking to secure product. Some sales to Vietnam have been noted this week while South Korea and China are actively seeking product as well. DDGS in 40-foot containers to Japan and China were priced $5 per container higher this week for August delivery. Running well above year-ago levels are U.S. DDGS export volumes to Vietnam (up 78 percent), South Korea (up 85 percent) and Thailand (up 62 percent), which may reduce the importance of other destinations to U.S. export interests. Notably, DDGS exports to Turkey have totaled 345,000 MT year-to-date which constitutes an increase of over 1,000 percent.
Prices for FOB Gulf and U.S. rail slots experienced declines this week as DDGS are still competing for space on the rail network. Sellers are reluctant to price their product much lower, however, given the expected demand in the coming winter months.
Ethanol Comments: Ethanol production this past week rose above the prior week’s production but remained below the record highs of two weeks ago. Last week’s production reached 1.004 million barrels per day, up 6,000 barrels from the prior week. Similarly, ethanol stocks grew by 213,000 barrels to 20.603 million barrels. The build-up in ethanol stocks was partly driven by a decline in gasoline usage which fell to 9.752 million barrels per day this week, down 25,000 from the prior week.
The margin between the corn price and the value of ethanol and coproducts was lower this past week in all of the four reference markets (see below), and the spread versus this time last year continues to widen.
- Illinois differential is $1.85 per bushel, in comparison to $2.04 the prior week and $1.80 a year ago.
- Iowa differential is 1.84 per bushel, in comparison to 1.93 the prior week and 1.69 a year ago.
- Nebraska differential is 1.52 per bushel, in comparison to 1.57 the prior week and 1.38 a year ago.
- South Dakota differential is 1.86 per bushel, in comparison to 2.01 the prior week and 1.8 a year ago.