Decreases in prices of competing feed ingredients and increased supplies of dried distillers grains allowed DDG prices to continue their downward march last week.
The DTN spot price average dropped $10 per ton last week from the week prior, from $286 per ton to $276.
During most of July and August, prices of DDG skyrocketed, pushing the DTN weekly spot price average to a record high of $299 per ton during the second week of August. Since then, prices had been slowly falling downward, dropping $16 per ton in recent weeks, from $292 during the first week of September to $276 last week.
Of the 30 Midwestern locations DTN collects prices from, 25 locations reported last week that their prices had increased from the week prior between $5 and $17 per ton, though most increases were in the $5 to $10 range.
Prices remained the same as the week prior at two locations, while only one location raised their prices $1 per ton. Two locations had no offers last week.
Merchandisers told DTN last week that much of the reason for the drop in DDG prices was a downward trend on the corn board, as well as decreases in prices of other feed ingredients. Also contributing to the price decline in DDG is increasing supplies, as many ethanol plants are up and running after summer shut-downs and scheduled maintenance.
With more production, inventories of DDG at many plants are building up, so companies are lowering prices to move out product. With more supply, prices are coming down.
Merchandisers also related that concerns regarding aflatoxin will continue as the new crop is harvested and tested and everyone sees just how high levels are.
The value of DDG relative to corn last week was at about 103.59%, slightly higher than the prior week's 102.55%. The value of DDG relative to soybean meal also rose to 57.23% from 54.91% the week prior.
The cost per unit of protein for DDG was $11.04 last week, compared to the cost per unit of protein for soybean meal at $10.15.
Cheryl Anderson can be reached at Cheryl.firstname.lastname@example.org.
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