Distillers Dried Grains with Solubles (DDGS)
DDGS Comments: At the same time that ample grain supplies are pressuring markets, DDGS prices are having to take into account historically high put-through rates at the Gulf. Prices are expected to continue moving lower but that has not stifled near-term demand.
DDGS is still being viewed fully relative to its corn value in the feed ration. In fact, container values to Asian destinations were down very modestly (<$3/container) this past week. Uncertain will be the impact of a large crop coming in this fall relative to demand but, at this juncture, buyers are purportedly already bidding for fourth quarter purchases.
Ethanol Comments: Ethanol production this past week hit a record high of 1.029 million barrels per day, up 25,000 barrels from the prior week. Similarly, ethanol stocks grew by 26,000 barrels to 21.157 million barrels. However, gasoline usage recovered from the prior week’s fall and surpassed the usage observed at the beginning on July.
The margin between the corn price and the value of ethanol and coproducts was lower this past week in all of the four reference markets (see below), and the spread versus this time last year continues to widen.
- Illinois differential is $2.16 per bushel, in comparison to $2.40 the prior week and $1.53 a year ago.
- Iowa differential is $2.27 per bushel, in comparison to $2.37 the prior week and $1.56 a year ago.
- Nebraska differential is $1.94 per bushel, in comparison to $1.98 the prior week and $1.20 a year ago.
- South Dakota differential is $2.34 per bushel, in comparison to $2.42 the prior week and $1.55 a year ago.