Distillers Dried Grains with Solubles (DDGS)
DDGS Comments: Container values fell this past week with the sharpest decline for containers headed to Japan. Some sources in the trade believe that U.S. DDGS prices will still be on par with domestic Chinese product after the combined CVD/AD is applied. This will make customer preference regarding quality a stronger variable. To the degree that China’s DDGS imports decline, buyers in other destinations will see this as an opportunity – including in Vietnam and Korea among other destinations. Indeed, there is likely to be a bottom in the near-term given that market demand for product historically increases toward the end of the calendar year and in the early months of a new one.
Ethanol Comments: U.S. ethanol production was up 8,000 barrels per day this past week, incentivized by some of the best margins in two years. However, stocks grew by 600,000 barrels to reach 20.6 million barrels, up 10 percent from a year ago.
China’s imports of ethanol continue to be sluggish relative to past volumes. The margin between the corn price and the value of ethanol and coproducts across the four reference markets is detailed below.
- Illinois differential is $2.26 per bushel, in comparison to $2.19 the prior week and $1.58 a year ago.
- Iowa differential is $2.05 per bushel, in comparison to $2.23 the prior week and $1.58 a year ago.
- Nebraska differential is $1.82 per bushel, in comparison to $1.81 the prior week and $1.64 a year ago.
- South Dakota differential is $2.21 per bushel, in comparison to $2.20 the prior week and $1.86 a year ago.