The five-month-long downward trend in prices of dried distillers grains appears to have finally ended; however, the cheaper prices seem to have stimulated demand and boosted prices upward.
The DTN weekly DDG spot price average rose another $5 in the past week, from $106 per ton last week to $111 this week. This marks the second week that the average has risen after an 18-week freefall that began in early April.
Of the 37 Midwestern locations DTN collects spot prices from, 25 locations reported their prices had increased between $5 and $15 since last week. Prices at nine locations remained unchanged since last week. Only one location reported a price decrease of $5 and two locations had no offers.
Merchandisers told DTN this week that the lower prices are stimulating demand, making DDG a value relative to soybean meal. Some renewed demand is also being seen from the swine and poultry industries that are beginning to add DDG back into their rations.
The renewed demand has also helped ethanol plants get excess supplies cleaned up as well, so plants no longer need to sell off product to clear inventory.
Some merchandisers said the barge market is alive and well after summer problems with flooding on the Mississippi River. That, and the fact that some of the export market lost to China's GMO debacle has found new homes in other countries, also contributed to the price turn-around.
The value of DDG relative to corn this week rose a few percentage points, from 82% last week to about 86% this week. However, that value is still ideal for the livestock sector seeking to find their least cost ration. The value of DDG relative to soybean meal also rose from about 23% last week to about 27% this week.
The cost per unit of protein for DDG was $4.44 this week, compared to the cost per unit of protein for soybean meal at $8.71.
Cheryl Anderson can be reached at Cheryl.email@example.com.
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