Recent tightness in supplies of dried distillers grains, coupled with a shortage of railcars, pushed DDG prices on a continuing upward trend in the past two weeks.
The DTN weekly DDG spot price average rose $6 per ton in the past two weeks, from $212 the third week of November to this week's $218 per ton. This marks the fourth consecutive week the average has increased, rising a total of $13 per ton since early November, when the average was at $205 per ton.
Of the 30 Midwestern locations DTN collects prices from, 21 locations reported that in the past two weeks, their spot prices had increased between $4 and $30 per ton, though most increases were in the $5 to $10 range. Prices at seven locations remained unchanged in the past two weeks. Only one location reported a decrease of $3 per ton and one location had no offers.
Merchandisers told DTN that continuing tightness in DDG supplies caused the continuing rise in prices. Equally to blame for price spikes is a shortage of railcars. Merchandisers said shipments of DDG are backed up, so no new sales can be made until current contracts are completed. Also factoring in the equation is a surge in the price of proteins, forcing DDG to follow the trend.
The value of DDG relative to corn this week rose to a new record at more than 144%. The value of DDG relative to soybean meal this week was at 48.87%.
The cost per unit of protein for DDG was at $8.72 this week, compared to the cost per unit of protein for soybean meal at $9.39.
Cheryl Anderson can be reached at Cheryl.firstname.lastname@example.org.
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