Distillers Dried Grains with Solubles (DDGS)
DDGS Comments: Price increases were impressive all around based on the weekly survey of traders, though this week the larger jump was for deliveries to Asian markets. Most of the interest is coming for near-term delivery and that is where price increases are sharpest. Containers delivered in June to Korea (+$25), Taiwan (+$23) and Vietnam (+$23) saw the largest jumps. The average change across all markets was up an average $16/container for June delivery. Deliveries for July were up an average $11/container and for August the average increase was $9/container. There is interest in deferred deliveries but mostly just because of the discounts.
Chinese demand has purportedly increased but overall buyer interest is also much better than it was. The strong upward pressure on soybean meal prices does not look like it will abate soon.
USDA’s Grain Crushings and Co-Products report issued on June 1, 2016 showed DDGS production in April at 1.702 MMT, up 2 percent for the same month a year earlier. Offsetting the increase is a decline in the production of DDG without solubles and non-modified wet DDG.
Ethanol Comments: USDA’s Grain Crushings and Co-Products report issued on June 1, 2016 indicates that 392.4 million bushels of corn were used for ethanol production in April, down from 407.7 million bushels used in April of last year.
U.S. ethanol production rose 1.5 percent last week to an average of 960 thousand barrels per day; stocks according to the Energy Information Administration (EIA) continue to decline (-0.2 percent) and now stand at 20.77 million barrels.
The margin between the corn price and the value of ethanol and coproducts was up this past week in all four key markets (see below).
- Illinois differential is $1.83 per bushel, in comparison to $1.78 the prior week and $2.39 a year ago.
- Iowa differential is $1.78 per bushel, in comparison to $1.63 the prior week and $2.14 a year ago.
- Nebraska differential is $1.75 per bushel, in comparison to $1.63 the prior week and $1.84 a year ago.
- South Dakota differential is $2.22 per bushel, in comparison to $2.15 the prior week and $2.33 a year ago.