Distillers Dried Grains with Solubles (DDGS)
DDGS Comments: DDGS prices are higher again this week on positive trade news from China. FOB ethanol plant DDGS rose $4/MT this week on a combination of trade news, increasing domestic demand from cold weather across the Plains, and increased export demand. FOB ethanol plant DDGS are valued at 40 percent of cash soybean meal and 104 percent of cash corn; both ratios are up from last week. DDGS are $1.54 per-protein unit more cost competitive than Kansas City soybean meal, though the spread narrowed this week due to strength in the DDGS market and softer soybean meal prices.
Barge CIF NOLA prices are steady this week after last week’s jump while FOB NOLA DDGS are $1/MT higher. Buyers, who pushed this market up last week, have moderated in their enthusiasm to chase prices higher. However, reports cite rising demand in the international market and this may increase prices further.
Internationally, DDGS demand has strengthened considerably as buyers around the world react to China’s recent VAT announcement. Buyers in other nations are procuring aggressively before any possible tightness is created by added Chinese buying. DDGS CNF Asia are $8/MT higher this week at $238/MT. Merchandisers are reporting Vietnam is an active buyer, and prices for 40-foot containers to this county are $7/MT higher. Other Southeast Asia nations bid prices higher by a similar amount. Prices to Shanghai increased only modestly, but if the tariff news develops according to current expectations these prices may too see additional strength.