Distillers Dried Grains with Solubles (DDGS)
DDGS Comments: The trade reports that the market is actually currently tight in nearby slots as traders move to ship product before a perceived start date to the Chinese anti-dumping tariffs. January supply tightness has now moved into February, especially for those close to the container loading markets – like Chicago. That nearby tightness is evident as container prices for DDGS to nine Asian markets this past week climbed an average (some markets higher than others) of $5.00 per container.
Testing of the new U.S. corn crop shows that it is of a better quality, which means that mycotoxins are not a concern and thus the DDGS quality should be good.
Meanwhile, the U.S. Department of Agriculture (USDA) is soliciting public comment through April 18 on how its standards and inspection process can be improved to boost exports of DDGS and other grains and products.
Ethanol Comments: At 1,003 million barrels, ethanol stocks were up again this past week as ethanol production has still not declined with the slower winter driving season. The weekly inventory is beginning to build and exports become more important in moving it as the price of gasoline gets lower.
In its latest Short-Term Energy Outlook, the U.S. Energy Information Administration (EIA) predicted that U.S. ethanol production will average 970,000 barrels per day in both 2016 and 2017. That is a 0.6 percent increase over its December forecast of 960,000 barrels per day in 2016. Until the slowdown for the slower winter driving months, production was around one million barrels per day. The corn crop harvested this past fall and headed for ethanol plants tested at a higher quality than the average of the past four growing seasons.
Ethanol production margin for the Corn Belt are as follows:
- Illinois differential is $1.13 per bushel, in comparison to $1.21 the prior week and $1.57 a year ago.
- Iowa differential is $1.02 per bushel, in comparison to $1.12 the prior week and $1.29 a year ago.
- Nebraska differential is $1.26 per bushel, in comparison to $1.36 the prior week and $1.22 a year ago.
- South Dakota differential is $1.20 per bushel, in comparison to $1.33 the prior week and $1.60 a year ago.