Distillers Dried Grains with Solubles (DDGS)
DDGS Comments: The demand for corn by China’s feed millers remains very strong and prices are rising ($294.90/MT average), which should make DDGS more attractive. Still, it is Vietnam according to media reports that is going big for largely U.S. DDGS. Imports from the U.S. have reportedly skyrocketed.
At this juncture, DDGS buyers are as confused as others in the commodity markets. Some buyers hope the price will go lower, while others are stepping in now to take advantage of the recent price drop.
Ethanol Comments: Chinese demand for ethanol remains very strong with imports from the U.S. totaling nearly 131 million liters during April, a record, and at a FOB port value of $0.45/liter or $1.69/gallon. It has already reached an all-time annual record of 416 million liters at an average value of $0.44/liter or $1.66 per gallon for the first four months of 2016. The table below compares the details of the U.S. exports to China for those first four months of each year from 2011 through 2016.
Daily U.S. ethanol production fell slightly this past week to an average of 962,000 barrels per day. Stock levels also fell slightly to 21.1 million barrels.
The margin between the corn price and the value of ethanol and coproducts was up in all four key markets (see below) this past week, and are above levels recorded this time a year ago.
- Illinois differential is $1.93 per bushel, in comparison to $1.825 the prior week and $1.81 a year ago.
- Iowa differential is $1.92 per bushel, in comparison to $1.90 the prior week and $1.73 a year ago.
- Nebraska differential is $1.66 per bushel, in comparison to $1.60 the prior week and $1.51 a year ago.
- South Dakota differential is $2.13 per bushel, in comparison to $2.08 the prior week and $1.78 a year ago.