Distiller’s Dried Grains with Solubles (DDGS)
DDGS Comments: DDGS values continue to grind sideways alongside the corn market with minimal support from a stronger soymeal market. Spot supplies are tightening as the ethanol industry begins its seasonal fall maintenance period, which should start to support nearby values. Feed demand remains steady, but the advancing new crop harvest could start to change that.
The DDGS/cash corn ratio is up sharply from the prior week at 1.24 and remains above the three-year average of 1.02. The DDGS/soymeal ratio also strengthened from the prior week and hit 0.48, which is still below the three-year average of 0.50.
Rates for DDGS delivered by rail to key U.S. locations are up $2/MT this week as challenging logistics on the Mississippi River system push more product to the rail market. Additionally, the ethanol co-product is still competing for space with the new crop grain and oilseed harvests. Barge CIF NOLA DDGS offers are $6 higher for spot positions this week with barge rates rising as Mississippi River water levels fall. Offers for November and December barges are up just $5 and $3, respectively, from last week. FOB Gulf offers have followed a similar trend with October offers up $9/MT this week while November and December positions up $6-7/MT.
Two weeks ago, the U.S. Census Bureau reported July DDGS exports of 993.018 MT, up 4.5 percent from June but down 2 percent from July 2022. Mexico accounted for 19 percent of U.S. DDGS exports and was the top buyer, followed by Vietnam and Indonesia. YTD DDGS exports are down 9 percent.
