DAVENPORT, Neb. (DTN) -- Due to increased ethanol production and better supplies of dried distillers grains, prices of DDG fell to their lowest level since last June.
The DTN weekly DDG spot price average fell $7 per ton in the past week, from $246 per ton to $239. This marks the fifth week in a row the spot price average has fallen, for a total of $26 per ton, with $22 of that decrease in the past two weeks alone.
The last time DDG prices were at such a low level was in late June 2012, when the average reached $230 per ton.
Of the 29 Midwestern locations DTN collects prices from, 27 locations reported their prices had decreased, with most decreases between $5 and $10 per ton. Only two locations reported their prices remained the same since the week prior. No price increases were reported.
Merchandisers told DTN this week that production at ethanol plants was stronger, resulting in more product on the market. Also contributing to the price decreases was a continuing downward trend in corn prices, leaving DDG prices trailing along for the ride.
Some merchandisers felt that DDG's value to corn had not dropped sufficiently in comparison to corn prices, so this week's price decreases was merely DDG finding the bottom and settling in.
This was evident in the value of DDG relative to corn, which fell from 109.51% last week to 102.76% this week. The value of DDG relative to soybean meal fell less dramatically, from 62.79% last week to 60.51% this week.
The cost per unit of protein for DDG this was $9.56, compared to the cost per unit of protein for soybean meal at $8.32.
Cheryl Anderson can be reached at Cheryl.email@example.com.
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