Distillers Dried Grains with Solubles (DDGS)
DDGS Comments: DDGS exports have gone well thus far this year and exporters report that they are now raising prices to be closer in line with the value of corn. Indeed, reported export pricing for this past week was up to all locations, including a $20/container increase to Japan and double digit increases to Southeast Asian markets. U.S. Census Bureau export data for U.S. exports of DDGS show a decline in sales to China but sales to Mexico remain on pace with last year and exports to Vietnam, South Korea, Indonesia, Turkey as well as other select markets are all sharply higher this year (see table below). Despite the declining exports to China, U.S. total DDGS exports to the world in the first half of 2015/16 at 5,366,764 MT are 17.5 percent higher than 4,567,106 MT exported during the first half of 2014/15.
Ethanol Comments: U.S. exports of ethanol were up 14 percent from March of 2015 with China the leading destination, which fits the central government’s plan to reduce pollution. The U.S. achieved another high-water mark in ethanol exports to China in February with a total of 33.653 million liters (valued at $18.21 million) compared with just 10,770 liters for the same month a year ago. Although February’s numbers are only 30 percent of January’s total, the total for just those two months is more than half of the volume that the U.S. sent to China in all of 2015.
The Energy Information Administration (EIA) increased the estimated stocks of ethanol to 22.2 million barrels (+572,000) as production fell by 4,000 barrels per day to 923,000 barrels per day, likely due to routine plant maintenance.
The margins between the corn price and the value of ethanol and coproducts were up in three out of the four key markets from a week ago (see below).
- Illinois differential is $1.57 per bushel, in comparison to $1.55 the prior week and $2.52 a year ago.
- Iowa differential is $1.64 per bushel, in comparison to $1.58 the prior week and $2.23 a year ago.
- Nebraska differential is $1.76 per bushel, in comparison to $1.82 the prior week and $2.11 a year ago.
- South Dakota differential is $2.02 per bushel, in comparison to $1.74 the prior week and $2.45 a year ago.