Distillers Dried Grains with Solubles (DDGS)
DDGS Comments: It’s been a quiet week for DDGS trading and prices are mixed. Prices for product delivered to the PNW and California held their value the best this week, with January delivery prices steady to $2/ton higher. FOB plant prices were strongest for producers in Nebraska, Kansas, Iowa, and Minnesota while Chicago area prices were weaker. International prices had a softer tone this week because of holiday-reduced demand.
This week’s drop in ethanol production and the seasonal decline expected in January should be supportive for FOB prices in the near term. Add to that the potential for increased Midwest feed demand motivated by cold January weather and the outlook is for prices to remain steady to higher for the near future.
Ethanol Comments: Ethanol margins were sharply down this week across all four reference markets. Producers in Illinois saw their margins slip the most this week as they fell $0.61/bushel. Ethanol producers are still enjoying comparatively good margins, which are up $0.95/bushel over last year on average, despite this week’s deterioration in margins. Ethanol production fell this week to 1.028 million barrels/day (-0.8 percent) while stocks dropped 377,000 barrels (-2 percent) to 18.683 million. Production is expected to fall seasonally heading into the new year but will remain well above historic norms.
- Illinois differential is $2.06 per bushel, in comparison to $2.67 the prior week and $1.29 a year ago.
- Iowa differential is $2.21 per bushel, in comparison to $2.59 the prior week and $1.12 a year ago.
- Nebraska differential is $2.20 per bushel, in comparison to $2.62 the prior week and $1.33 a year ago.
- South Dakota differential is $2.51 per bushel, in comparison to $2.88 the prior week and $1.45 a year ago.