Distiller’s Dried Grains with Solubles (DDGS)
DDGS Comments: The spring maintenance season for ethanol plants is drawing to a close, which will start to increase DDGS supplies. DDGS prices are higher yet again this week with FOB plant values up $10/MT. Merchandisers report that broad-based strength in nearly every commodity market is supporting DDGS values, but especially the rally soymeal prices and basis. The Kansas City soymeal/DDGS ratio increased to 0.55 this week and is above the three-year average of 0.47. The DDGS/cash corn ratio is at 1.09 this week, down from 1.11 last week but above the three-year average of 1.06.
Merchandisers indicate that offers for DDGS delivered to Lethbridge, Alberta are still sparse following the labor dispute between the Canadian Pacific railroad and its employees last week and early this week. Offers are near $387/MT this week, however, up from $375/MT two weeks ago.
U.S. barge freight rates have surged amid rising freight demand for spot and April positions. This has pushed Barge CIF NOLA offers for DDGS sharply higher with prices rising $36-48/MT for Q2 positions. The Gulf market has followed the increase and FOB NOLA offers are up $31-39/MT this week. Exporters indicate that the price increase has not spooked buyers, however, and buying interest remains strong.
Containerized DDGS exports to southeast Asia are higher this week with rates increasing $30/MT on average to $487. Offers for product to South Korea are down $4/MT, but that is the only market for which price decreases are quoted. Traders said demand and prices were steady early this week but that a late-week surge developed.