Distillers Dried Grains with Solubles (DDGS)
DDGS Comments: For the same reasons that U.S. DDGS exports have been up the past few months (+6 percent in August over July), the decline in prices this past week was fully anticipated due to market conditions. That is why it was a relatively modest drop. Product destined to Yokohama took the biggest hit, but most other Asian market destinations were down an average $1-5/container, or around 2 percent or less. Some importers may game market softness to rewrite contracts but demand remains strong in top markets such as Mexico, Vietnam and South Korea.
Ethanol Comments: U.S. ethanol exports were up 12 percent in August over July, with Brazil the top monthly customer (+65 percent) followed by Canada and India. Brazil incurred its fourth month in a row of declining ethanol exports. Despite some of the best margins in two years, U.S. ethanol production was down 9,000 barrels per day this past week to 980 thousand barrels per day. In a related fashion, stocks fell by 401,000 barrels dropping the overall total to 20.18 million barrels. The margin between the corn price and the value of ethanol and coproducts across the four regularly tracked reference markets is detailed below.
- Illinois differential is $2.34 per bushel, in comparison to $2.26 the prior week and $1.72 a year ago.
- Iowa differential is $2.24 per bushel, in comparison to $2.05 the prior week and $1.54 a year ago.
- Nebraska differential is $1.93 per bushel, in comparison to $1.82 the prior week and $1.70 a year ago.
- South Dakota differential is $2.41 per bushel, in comparison to $2.21 the prior week and $1.74 a year ago.