Distillers Dried Grains with Solubles (DDGS)
DDGS Comments: The DDGS market caught fire this past week due to higher soybean meal prices. One trader says prices jumped $15/container in one day and the survey average for the trading week showed a +$23/container increase based on June shipment. Some buyers paid up but others had sticker shock. However, the survey shows similar increased prices for July/August shipment and at least one major Asian buyer is looking to lock in August/September supplies.
Ethanol Comments: Daily U.S. ethanol production rose an average 46,000 barrels and hit a more seasonal level of 1.006 million barrels. Meanwhile, demand pushed stock levels down (-2.6 percent) to 20.2 million barrels. Ethanol exports are running 5 percent higher and hit a 52 month (since December 2011) high in April. The Oil and Gas Investments Bulletin is bullish on Chinese demand and estimates that crush margins will remain positive, though some worry higher prices could slow export demand.
The margin between the corn price and the value of ethanol and coproducts was variable this past week in the four key markets tracked (see below).
- Illinois differential is $1.75 per bushel, in comparison to $1.83 the prior week and $2.19 a year ago.
- Iowa differential is $1.82 per bushel, in comparison to $1.78 the prior week and $1.98 a year ago.
- Nebraska differential is $1.64 per bushel, in comparison to $1.75 the prior week and $1.67 a year ago.
- South Dakota differential is $2.22 per bushel, in comparison to $2.22 the prior week and $2.15 a year ago.