Distillers Dried Grains with Solubles (DDGS)
DDGS Comments: Traders are noting greater pricing strength following corn and soybean futures’ move higher. Strong river/barge values have caused DDGS prices to bounce back to near-term highs. Prices for DDGS barge CIF NOLA rose $6/MT this week to $162 while FOB NOLA prices hit $175/MT. DDGS prices FOB ethanol plants are steady this week, averaging $108/short ton.
Domestically, DDGS are priced at 35 percent of KC soybean meal and 90 percent of cash corn. DDGS hold a $2.21 per-protein unit cost advantage to soybean meal, less than last week but in-line with values seen two weeks ago. On the export market, FOB Gulf DDGS are priced at 103 percent of FOB NOLA corn and 48 percent of FOB Gulf soybean meal. The per-protein unit cost between DDGS and soybean meal favors DDGS by $0.68 this week, nearly double last week’s recorded value.
Merchandisers are reporting higher prices are keeping international buyers sidelined for the time being. Container demand is weak and overseas buyers are making inquiries but are too far below domestic offers for trades to be completed. Should the CBOT rally continue, however, international buyers will be forced to increase bids and DDGS prices should have upward potential. Prices for 40-foot containers to SE Asia were lightly traded but quoted $2/MT higher at $192.10 this week.