Distillers Dried Grains with Solubles (DDGS)
DDGS Comments: The average of prices for DDGS delivery in February at 16 delivery points fell an average of less than 1 percent last week. The price change for March/April delivery was -2.8 percent. There was a 1 percent increase for DDGS designated FOB Gulf. Larger declines for container deliveries in February/March/April were experienced in Laredo, Texas and Ho Chi Minh City, Vietnam. Prices were stronger overall for product delivered for rail shipment at Elwood, Illinois. This is a relatively firm market, especially in the nearby given the usual supply/demand dynamics experienced during this time of year.
Merchandisers reported small sales to Taiwan during the past week. U.S. DDGS exports to China for 2015 through the end of November (6.1 MMT) were up nearly 42 percent from the full 12-month total in 2014 (4.3 MMT).
Ethanol Comments: Ethanol production was down last week by an average 2 thousand barrels per day. However, that was not enough to offset the winter drop in demand for gasoline, especially during the record East Coast blizzard. As a result, surplus stocks were pushed higher by 4.3 percent to 22.4 million barrels for the week ending January 29, 2016. That is the highest level of stocks since March of 2012. However, some in the trade says that prices around the Gulf are up, likely due to export demand. Meanwhile, the Energy Information Agency reported that ethanol exports were down in November 2015, a 12 percent decline on the monthly average for the first 11 months of the year.
Meanwhile, the margin between the corn price and the value of ethanol and coproducts jumped last week in all four tracked markets (see below).
- Illinois differential is $1.35 per bushel, in comparison to $1.10 the prior week and $1.81 a year ago.
- Iowa differential is $1.21 per bushel, in comparison to $0.98 the prior week and $1.56 a year ago.
- Nebraska differential is $1.41 per bushel, in comparison to $1.17 the prior week and $1.43 a year ago.
- South Dakota differential is $1.55 per bushel, in comparison to $1.19 the prior week and $1.68 a year ago.