Distillers Dried Grains with Solubles (DDGS)
DDGS Comments: DDGS prices paused their climb higher this as ethanol plants began aggressively marketing forward months. International buyers are still present but bids are low with the market slowing. Traders are noting that a weaker corn price outlook and limited inventories are moving some locations to an inverted market.
Barge CIF NOLA values were $1/MT higher while FOB U.S. Gulf prices were unchanged to $2/MT lower. The sharp increase ethanol production during the past two weeks has added to DDGS supplies, making it more difficult for merchandisers to increase offers.
Domestically, DDGS prices are maintaining a firm tone. FOB ethanol plant prices are unchanged this week from their $1/MT move higher last week. DDGS are priced at 104% of cash corn and 40% of cash soybean meal, with both ratios higher than the previous week. The per-protein unit cost advantage of DDGS (versus soybean meal) is $1.46, down slightly from last week.
DDGS consumption has been solid so far this year and is expected to remain so. Large hog and cattle inventories have increased overall feedstuffs consumption, including that of DDGS. Tomorrow’s Cattle on Feed report from USDA will provide additional guidance as to what DDGS consumption will look like for that sector in the coming months.