Distillers Dried Grains with Solubles (DDGS)
DDGS Comments: October exports of DDGS as reported by the U.S. Census show shipments to global destinations (aside from China) up 6 percent in October compared with a month earlier. Major buyers continue to be Mexico, Vietnam, Canada, Turkey and South Korea. In fact, U.S. DDGS exports for the year are forecast to hit a record 12.8 MMT.
Notably, the Middle East/North Africa (MENA) is a market for DDGS (see below) as its expanding animal protein demand, particularly poultry, and lack of feed supply drive demand. DDGS imports by Middle East/North Africa from January-October 2015 (MT) are shown below (sourced from USDA/FAS/GATS).
- Egypt: 88,600
- Israel: 106,500
- Morocco: 93,500
- Turkey: 81,400
Vietnam continues to be an aggressive buyer, followed by Korea and Thailand with prices ranging in the low 200s. While containers into China showed a 14 percent increase in price for December delivery and a 12 percent increase for February, Malaysia was not far behind in showing strength. However, shipments out to March show softer prices all around.
Ethanol Comments: The weekly ethanol production report through December 4 showed average daily production of 993,000 barrels/day, up 37,000 barrels/day from the prior week. Ethanol stocks declined slightly on increased demand. The EPA also announced that U.S. crude oil supplies actually dropped slightly last week, but stocks of distillates increased. Crude oil prices rallied briefly on the lower oil supplies before quickly turning lower again.
U.S. ethanol exports totaled 70.1 million gallons in October, a 16 percent increase over September’s level. Notably, China was the top customer for U.S. ethanol for the first time, taking nearly half (32.6 million gallons) the total amount exported by the U.S. Year-to-date ethanol exports remain up 4 percent over last year.
There were no ethanol imports reported for last week and imports were down in October to just 25 percent of the amount imported in September. Imports of ethanol are down for the year and October marked the 26th month in which the U.S. was a net exporter of the fuel. Meanwhile, for the week ending December 10, 2015 the differential between the price of corn and co-products for the four regions of the Corn Belt is as follows:
- Illinois differential is $1.67 per bushel, in comparison to $1.75 the prior week and $3.92 a year ago.
- Iowa differential is $1.43 per bushel, in comparison to $1.43 the prior week and $3.58 a year ago.
- Nebraska differential is $1.61 per bushel, in comparison to $1.59 the prior week and $3.71 a year ago.
- South Dakota differential is $1.50 per bushel, in comparison to $1.56 the prior week and $3.83 a year ago.