Distillers Dried Grains with Solubles (DDGS)
DDGS Comments: DDGS prices are higher again this week, buoyed by international demand and rising soybean meal prices. FOB U.S. Gulf DDGS reached over $190/MT this week. DDGS rail-delivered to the PNW rose $5/MT this week to end at $216.50, while barge CIF NOLA prices moved higher by an equal amount. FOB NOLA DDGS are priced at 52 percent of FOB NOLA soybean meal and 120 percent of FOB NOLA corn. Both ratios are moving towards the high end of their normal range, which could either pressure DDGS prices or bring additional support to the corn and soybean meal markets.
Domestically, DDGS FOB ethanol plants (averaging $132/MT) are valued at 40 percent of Kansas City soybean meal values and 119 percent of cash corn. Soybean meal prices have been rising quickly with the dry weather in Argentina, which is keeping DDGs competitive in feed rations. DDGS enjoy a per-protein unit cost advantage of $1.60 versus soybean meal, up from $1.47 last week as soybean meal prices rose faster than DDGS.
Merchandisers are reporting that shipments to Vietnam are slowing as all Midwest loading points are too cold for the required fumigation. Prices for 40-foot containers to southeast Asia rose $6/MT on average this week, with prices for Shanghai, China and Taiwan increasing the most. The forward curve for DDGS to southeast Asia is relatively flat, meaning the market appears to be well-supplied but in balance with demand.