Ethanol Blog

Demand for dried distillers grains with solubles have declined for third quarter 2015 over first and second quarter levels, according to an article in Ethanol Producer (http://bit.ly/…), written by Sean Broderick, senior merchandiser for CHS in Minneapolis.

The lower prices have resulted in U.S. livestock producers beginning to include more DDGS into their rations.

Higher prices of DDGS had forced some U.S. livestock producers to substitute other ingredients than DDGS. According to DTN's weekly DDGS spot price average and value statistics, the value of DDGS relative to corn has hovered between 120% and 138% since mid-January.

Broderick said that the possible loss of demand from the deaths of more than 34 million birds, due to the H5N1 bird flu, may keep DDGS prices from any large upward movement in the near future.

The biggest influence on DDGS prices, Broderick said, is the Chinese market. Currently, DDGS are still priced at a value compared to China's domestic corn. However, another good crop year added to the country's existing surplus of corn could result in China pricing their corn lower in order to move out excess supplies and more seriously competing with U.S. DDGS.

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

(ES)

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