Higher prices of soybean meal and low Chinese import levies have pushed prices of dried distillers grains to record high values compared to corn, according to an article by Agrimoney.com (http://bit.ly/…).
According to statistics from the U.S. Grains Council, March sales from the U.S. Gulf export market reached $325 per ton, the highest level in a year. Corn export prices, on the other hand, have dropped considerably in the past year to about $220 a ton for March.
Statistics compiled by DTN show DDG spot prices trading between 132% and 139% of the value of corn. Those values are high, but lower than 140% to 145% values seen in December 2013 when railcar availability and logistics issues began to push prices higher.
The value of DDG relative to soymeal, according to DTN's statistics, has hovered between 48% and 52% during March.
Demand from Chinese buyers is continuing to grow, using DDG to replace corn most in hog and poultry feed. The popularity of DDG is boosted by a relatively low import tax rate of just 5%, as DDG is exempt from the 13% VAT tariff applied to both corn and soymeal buy-ins.
Another benefit of DDG for Chinese buyers is the decreases in transportation costs, since DDG is backhauled to Asia in shipping containers empty after being used for exports to the U.S.
Cheryl Anderson can be reached at Cheryl.email@example.com.
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