Market Perspectives March 31, 2016

Distillers Dried Grains with Solubles (DDGS)

DDGS Comments: DDGS is a co-product of corn and so USDA’s prediction of a lot cheaper corn is a bearish factor on DDGS. Prices are being pushed downward with the average of $6 per container this past week. The average for a container of DDGS to destinations in Asia during April was $203, but that number falls below $200 to $199 per container for May and June shipment. Under the law of supply and demand, these lower prices should have some positive impact on demand. USDA forecasts that DDGS production will be 4 percent greater this year, and Chicago futures are indicating it will be less expensive to obtain. 

Please note that the U.S. Grains Council is pleased to release a grains conversion calculator app. The app converts English units to metric units and vice-versa for grains and related measures. It is available in the Apple’s App Store, Google Play Store, Amazon’s Appstore or Microsoft’s Windows Store by searching for “grain conversion calculator.” The iPhone app is available here

Ethanol Comments: Total stocks of ethanol were up 2.2 percent this past week to 23 million barrels, even though production fell by 3,000 barrels per day to an average 992,000 barrels per day.

The margin between the corn price and the value of ethanol and coproducts was up this past week in all four market basket states. (See below.) 

  • Illinois differential is $1.17 per bushel, in comparison to $1.33 the prior week and $1.93 a year ago.
  • Iowa differential is $1.17 per bushel, in comparison to $1.27 the prior week and $1.65 a year ago.
  • Nebraska differential is $1.59 per bushel, in comparison to $1.48 the prior week and $1.51 a year ago.
  • South Dakota differential is $1.40 per bushel, in comparison to $1.48 the prior week and $1.90 a year ago.