Market Perspectives – March 30, 2023

Distiller’s Dried Grains with Solubles (DDGS)

DDGS Comments: DDGS values are $2/MT lower this week amid mixed influences from stronger soymeal values and an uptick in DDGS output. Soymeal values staged a rally this week as domestic supplies remain tight and concerns grow about Argentina’s crush output. While that has helped support DDGS values on the margin, supplies of the ethanol co-product remain adequate to meet near-term needs. Ethanol output rose 0.6 percent last week and returned above 1.0 million barrels despite the advent of the seasonal spring maintenance period.

The FOB ethanol plant DDGS/cash corn price ratio rose to 1.08 this week, up from 1.06 last week and above the three-year average of 1.06. The DDGS/Kansas City soymeal ratio slipped lower this week and hit 0.53, down from last week’s value of 0.55 but still above the five-year average of 0.50.

Barge CIF NOLA offers are $5-7/MT lower for Q2 positions this week as strong barge freight values soften alongside lower interior market offers. FOB NOLA offers are $1/MT lower for Q2 positions and average $338/MT for April. This week’s offers for 40-foot containers to Southeast Asia are $7-8/MT lower amid a pullback in ocean freight values and average $392 for Q2 shipment.