Distillers Dried Grains with Solubles (DDGS)
DDGS Comments: Container shipments of DDGS to Asian markets continued to decline in price with an average $6/container decline to Southeast Asia and a reportedly large $22/container drop in price for sales to Japan. Overall, sales were modest this past week but buyers have become more comfortable making bids as they perceive the market to have settled into terms that are concurrently more certain and attractive. However, that certainty may not last as rates for containers FOB Gulf jumped by $10/container this past week and that will now likely reverberate into overseas markets. Moreover, the impending Midwest heat wave will start rebuilding the weather premium into the futures market, and this may eventually become reflected in DDGS prices.
Ethanol Comments: Ethanol production this past week increased by 20,000 barrels per day to an average of 1 million barrels per day; stocks were reduced by 426,000 barrels to 21.13 million barrels. However, gasoline usage took a decline that is unusual for this time of year.
The margin between the corn price and the value of ethanol and coproducts was higher this past week in three of the four reference markets (see below), and the spread versus this time last year continues to widen.
- Illinois differential is $2.40 per bushel, in comparison to $2.20 the prior week and $1.62 a year ago.
- Iowa differential is $2.37 per bushel, in comparison to $2.23 the prior week and $1.59 a year ago.
- Nebraska differential is $1.98 per bushel, in comparison to $1.99 the prior week and $1.28 a year ago.
- South Dakota differential is $2.42 per bushel, in comparison to $2.22 the prior week and $1.42 a year ago.