Distillers Dried Grains with Solubles (DDGS)
DDGS Comments: U.S. DDGS prices are mostly unchanged this week and lack clear direction. Near-term supplies remain tight but buying interest is quiet with plenty of cheap corn available. The U.S. market is showing a small carry and feed mills are waiting for a more bearish scenario to develop before purchasing. The domestic market’s carry, combined with a neutral/bearish outlook from overseas buyers, is creating a growing spread and light trading volumes.
Domestically, CIF NOLA barge DDGS prices are flat this week while FOB Gulf prices fell $0.75/MT in sympathy with lower corn prices. FOB Gulf product quotes averaged $176.25 this week. DDGS rail-delivered to the PNW increased $2.50/MT to their last quote of $195/MT, likely in response to growing Chinese demand. FOB ethanol plant prices are 37 percent of Kansas City soybean meal values and 101 percent of cash corn values, a 1 percent increase in each ratio from last week. DDGS maintained a $1.86 per-protein unit cost advantage over soybean meal, which will keep the ethanol co-product competitive in feed rations this fall.
Internationally, DDGS prices CIF Southeast Asia were steady/higher this week, posting a $1/MT gain on average. Prices for 40-foot containers to China increased $7/MT for nearby shipments while December and January shipment prices rose $9/MT. The rising prices for China-destined product is likely indicative of that country’s increasing protein demand, which could signal increased imports of feed grains and soybeans/soy products later this year. While Chinese prices increased the most, $3/MT gains were noted for product destined for South Korea and the Philippines. Notably, prices increased for all nearby shipments to Southeast Asia this week.