While it appeared the plummet in dried distillers grains prices may have slowed slightly last week, factors such as logistical problems and the approaching July 4th holiday kept prices on a downward trend.
The DTN weekly spot price average fell another $12 in the past week, from $160 per ton last week to $148 this week. This is the lowest point the average has hit since mid-October 2010 and is the twelfth consecutive week the average has fallen, dropping a whopping $91 per ton since the first week of April.
Of the 37 Midwestern locations DTN collects spot prices from, 24 reported their spot prices had decreased in the past week, most between $5 and $30 per ton. Prices at 11 locations remained unchanged since last week, while only two locations reported slight price increases of $5 per ton in the past week.
There had been some thoughts that the plummeting DDG prices were slowing and that the market had finally found its bottom, however, merchandisers told DTN that several factors contributed to further price declines.
One contributing factor is the flooding that is occurring in many areas, especially along the Mississippi River, making it impossible to get barges loaded in some areas. Flooding is also keeping some companies from getting railcars into flooded areas such as South Dakota. Also, the upcoming three-day Fourth of July weekend is prompting ethanol plants to sell-off inventory in order to empty out enough storage before the holiday.
The value of DDG relative to corn fell from about 99.5% last week to nearly 94% this week. That value had remained above 100%, hovering between 120%-130% for many weeks, since July 2013. However, the lower values brought good news, resulting in some end users to put DDG back in their livestock rations. The value of DDG relative to soybean meal was almost 32% this week.
The cost per unit of protein for DDG was at about $5.92 this week, compared to the cost per unit of protein for soybean meal at $9.80.
Cheryl Anderson can be reached at Cheryl.email@example.com.
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