Ethanol Blog

Recent snowstorms and freezing level temperatures have plagued merchandisers of dried distillers grains last week and keeping prices relatively steady.

The DTN weekly DDG spot price average remained relatively steady, increasing just $1 per ton during the week, from $111 per ton the week before to $112 per ton. This is the fifth week that the average has increased, rising from $97 per ton in mid-October to last week's average of $112. Still, this is a sharp contrast to one year ago. The average for the same week in 2013 was $212 per ton, exactly $100 dollars above this year's level.

Of the 36 Midwestern locations DTN collects spot prices from, 16 locations reported that their spot prices had increased between $2 and $8 per ton since the prior week. Prices at 5 locations decreased between $5 and $10 per ton, while 15 locations said their prices remained unchanged.

Merchandisers told DTN that the upper Mississippi River froze and is closed earlier that it has in many years. The weather has only served to worsen an already troubled rail system, with many in snow-plagued areas unable to get rail service at this time.

Overall demand continues to be good, but the weather-related logistic problems are driving the market down a little and causing a drag on truck transportation.

The value of DDG relative to corn rose nearly four points last week, from about 70% the prior week to 84% last week. The value of DDG relative to soybean meal also rose, but only about two points, from about 28% two weeks ago to about 30% last week.

The cost per unit of protein for DDG was at about $4.48 last week, compared to the cost per unit of protein for soybean meal, which was at $7.81 last week.

Cheryl Anderson can be reached at Cheryl.anderson@dtn.com.

(ES)

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