Market Perspectives January 17, 2014

Distillers Dried Grains with Solubles (DDGS)

DDGS Comments: In relation to DDGS market prices this past week, prices have stabilized. Merchandisers report that Vietnamese buyers are making active inquires as U.S. corn prices currently appear to be plateauing into a trading range. The preceding Outlook section discussions the assumption by some market participants that corn futures contracts could drift back down, but it also notes the possibility that disappointing South American weather in the next two weeks could trigger an additional increase in corn futures contracts – which would presumably influence DDGS prices.

Ethanol Comments: Week-to-week ethanol stocks were reported to be unchanged at 16.1 million barrels, which is down 21 percent below year-ago levels. Consequently, ethanol producer margins remain favorable. The differentials between corn and the co-products values for the week ending January 17, 2014 were lower in the four areas of the Corn-Belt, but all are well above year-ago levels:

– Illinois differential is $4.31 per bushel in comparison to $4.40 the prior week and $1.12 a year ago.
– Iowa differential is $2.79 per bushel in comparison to $3.00 the prior week and $1.11 a year ago.
– Nebraska differential is $2.98 per bushel in comparison to $3.06 the prior week and $1.47 a year ago.
– South Dakota differential is $3.21 per bushel in comparison to $3.25 the prior week and $1.50 a year ago.