Distillers Dried Grains with Solubles (DDGS)
DDGS Comments: DDGS prices were higher for almost all reference markets this week, rising $4/ton on average. U.S. prices in NOLA and other Gulf locations were higher. U.S. rail rates were $5/ton higher this week on average and Canadian rail-delivered DDGS rose $11/ton. Internationally, containers to Southeast Asia were $4/ton higher on average and prices for November delivery to Vietnam and Japan saw the highest increases. Prices for December and January delivery experienced more modest increases as buyers are still filling near-term needs while waiting to judge future market conditions before securing product for late winter/early spring.
A recent study conducted by South Dakota State University shows feeding higher concentrations of DDGS in feed rations has no detrimental impacts on the onset of puberty in dairy heifers. The study compared three groups of dairy heifers that were fed different concentrations of DDGS and grass hay for 16 weeks. The results showed heifers fed the higher DDGS rations experienced metabolic changes that led to improved feed gain efficiency. Importantly, the study also found, contrary to a priori expectations, feeding increased DDGS levels did not alter the onset of puberty.
Ethanol Comments: Ethanol margins are higher this week and that incentivized plants to expand production 36,000 barrels per day from last week, with production reaching 998,000 barrels per day. Despite the production increase, ethanol stocks fell 351,000 barrels this week even as gasoline consumption fell 466,000 barrels per day during the same time period. Ethanol exports remain strong and are largely responsible for the stocks drawdown.
The margin between the corn price and the value of ethanol and coproducts was higher this past week across all four reference markets (see below), with the largest gains noted in Nebraska and Illinois. Compared to this same week last year, the spread is $0.44-$0.76 higher in all reference markets.
- Illinois differential is $2.29 per bushel, in comparison to $2.18 the prior week and $1.53 a year ago.
- Iowa differential is $2.04 per bushel, in comparison to $2.03 the prior week and $1.40 a year ago.
- Nebraska differential is $2.09 per bushel, in comparison to $1.93 the prior week and $1.61 a year ago.
- South Dakota differential is $2.09 per bushel, in comparison to $2.05 the prior week and $1.65 a year ago.