Distiller’s Dried Grains with Solubles (DDGS)
DDGS Comments: Rising soybean meal values are underpinning higher DDGS values this week. The past weeks’ reduction in ethanol output has led to tight nearby supplies and an inverse into the forward month. Buyers are waiting for cheaper prices while producers are not selling forward at discounts given the corn market’s carry and upside potential. Merchandisers report most activity is focused on nearby shipments.
DDGS prices FOB ethanol plants are down $2/MT higher this week while Kansas City soymeal is up $10/MT. Rising soymeal prices mean DDGS are more cost-effective in feed rations this week, with DDGS holding a $1.92/protein-unit cost advantage over soymeal.
Internationally, issues in Argentina are pushing soymeal prices higher which, in turn, are supporting DDGS values. Merchandisers are reporting international buyers were initially hesitant to book, but some then had to cover positions while others quickly bought before the market moved even higher. Barge CIF values are $130/MT higher this with FOB Gulf values rising $8/MT. Values for DDGS CIF Southeast Asia rose $4/MT this week with prices for product destined for Japan leading the market higher.