DTN Weekly Distillers Grains Update
Rail Markets, Exports Keep DDG Prices Low
In recent weeks, prices of dried distillers grains fell to the lowest level in more than five years, and in spite of a $5 ton-per-ton increase, a large rally is not expected in the immediate future.
The DTN spot price average has hovered between $97 and $98 per ton for the past three weeks, the lowest point since September 2009. This is a sharp contrast to the second week in August 2012 when the average reached $299 per ton. However, prices rose $5 per ton in the past week, reaching $103 per ton.
Several factors seem to be working together to cause this plunge in DDG prices in recent weeks, such as lagging exports, excess supply and falling prices of competing ingredients. But it is the rising prices of rail markets that are keeping prices low.
Warren Drew, senior merchandiser for Poet LLC in Sioux Falls, S.D., told DTN that rail markets to California have been up $10 to $15 in the past week, as well as mid-bridge pries to Mexico, which were up $10 to $12. Truck markets are still trading fairly level.
Barges loading for shipping down river are still weak, showing a little strength in the last week, Drew said, but is still weak compared to local truck markets.
Also keeping DDG prices low is the lack of exports to China since their demand for genetically-modified-organism-free certification brought trade to a standstill. That has resulted in excess product that needed to find new homes, he said.
Some railcars that shipped to the West Coast were unloaded, then sold back into the market in California instead of being loading onto containers for exports. However, that excess product has now worked its way out of the market, he said.
"The export market is still weak," he said. "A lot of containers on their way to China are working their way to other markets, and that is still affecting export markets."
Tightness in rail markets is keeping rail prices firm, especially with lack of rail car movement to destinations, especially to the West Coast.
"There's only so many railcars to ship," he said, adding that shippers can't use the railroad's own cars to ship DDG, but have to lease their own cars. With the delay in harvest and also the need for rail cars to move grain, cars are moving at a slower pace.
Domestic demand has stayed fairly strong, partially because of the delayed soybean harvest in some states like Indiana, Ohio and southern Illinois where farmers are held up by wet weather. That is helping keep soybean meal prices strong, and keeps DDGS an excellent price per unit of protein. Soybean meal prices have seen a big rally this week, he said.
Supplies are plentiful, allowing end-users to get what they need on truck. Ethanol plants are still running at a fairly good rate, Drew said, although production has backed off a little from earlier predictions.
In coming weeks, Drew said, he believes that rail will show more firmness because of the lack of car movements, which could put pressure on the truck market. Also, a rally in soymeal prices could firm DDG prices in both the rail and truck markets.
Cheryl Anderson can be reached at cheryl.anderson@dtn.com.
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IN THE NEWS
USDA to Resume Monthly Ethanol, DDG Report
Beginning in February 2015, the U.S. Department of Agriculture will resume a monthly U.S. ethanol production report, according to an article by Business Recorder (http://bit.ly/…).
The report is the first of several to be relaunched after being discontinued by the Census Bureau in 2011 due to Census budget cuts.
Hubert Hamer, director of the statistics division with the USDA's National Agricultural Statistics Services said the reports will be comparable to the previous reports and that reporting data to USDA will be mandatory.
The ethanol report will include data on ethanol feedstocks such as corn, wheat and sorghum, as well as statistics on production of co-products such as dried distillers grains. The first edition of the ethanol report will be released by USDA on Feb. 20, 2015, during its annual Agricultural Outlook Forum.
Other reports being re-launched include the monthly soybean crush report beginning in July, statistics for the flour milling and cotton industries in April, and a monthly report on the fats and oils industries beginning in July.
Demand for U.S. Grains, DDGS: Bullish
Rising population and rapidly growing incomes in emerging economics will continue to support demand for U.S. feed grains and agricultural products such as dried distillers grains with solubles, according to an article by the U.S. Grains Council (http://bit.ly/…).
Curtis Jones, global director of economic analysis for Bunge Global Agribusiness, spoke to attendees at the Council's Export Exchange 2014 recently, and said that the outlook for agricultural producers and trade is good, and growth in agricultural imports will likely continue, especially in countries in Asia, the Middle East and North Africa. Such areas are facing significant land, water and other constraints in food production expansion during great economic growth.
Since the world's fastest growing economies are abroad, growth in U.S. agriculture depends on exports. One product that has grown exponentially is DDGS, as more exports markets learn about the benefits of the high-protein feedstock.
Bob Dinneen, RFA president and CEO, said, "Just last year the United States exported a record 9.7 million metric tons of DDGS to nearly 50 countries. These exports accounted for approximately 28 percent of all U.S. produced DDGS, and I look forward to seeing what the future holds."
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Cheryl Anderson can be reached at cheryl.anderson@dtn.com.
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DTN WEEKLY DDG SPOT PRICES
| CURRENT | PREVIOUS | ||||
| COMPANY | STATE | 10/31/2014 | 10/24/2014 | CHANGE | |
| Bartlett and Company, Kansas City, MO (816-753-6300) | |||||
| Missouri | Dry | $122 | $120 | $2 | |
| Modified | $67 | $65 | $2 | ||
| CHS, Minneapolis, MN (800-769-1066) | |||||
| Illinois | Dry | $105 | $90 | $15 | |
| Indiana | Dry | $100 | $90 | $10 | |
| Iowa | Dry | $100 | $95 | $5 | |
| Michigan | Dry | $110 | $110 | $0 | |
| Minnesota | Dry | $95 | $90 | $5 | |
| North Dakota | Dry | $100 | $90 | $10 | |
| New York | Dry | $125 | $165 | -$40 | |
| South Dakota | Dry | $95 | $85 | $10 | |
| Hawkeye Gold, IA (515-663-6413) | |||||
| Iowa | Dry | $100 | $90 | $10 | |
| Modified | $48 | $37 | $11 | ||
| MGP Ingredients, Atchison, KS (800-255-0302 Ext. 5253) | |||||
| Kansas | Dry | $110 | $110 | $0 | |
| POET Nutrition, Sioux Falls, SD (888-327-8799) | |||||
| Indiana | Dry | $90 | $90 | $0 | |
| Iowa | Dry | $95 | $95 | $0 | |
| Michigan | Dry | $105 | $105 | $0 | |
| Minnesota | Dry | $95 | $95 | $0 | |
| Missouri | Dry | $104 | $95 | $9 | |
| Ohio | Dry | $98 | $95 | $3 | |
| South Dakota | Dry | $95 | $95 | $0 | |
| United BioEnergy, Wichita, KS (316-616-3521) | |||||
| Kansas | Dry | $110 | $110 | $0 | |
| Wet | $35 | $35 | $0 | ||
| Illinois | Dry | $105 | $105 | $0 | |
| Nebraska | Dry | $110 | $110 | $0 | |
| Wet | $35 | $35 | $0 | ||
| U.S. Commodities, Minneapolis, MN (888-293-1640) | |||||
| Illinois | Dry | $100 | $100 | $0 | |
| Indiana | Dry | $105 | $100 | $5 | |
| Iowa | Dry | $100 | $95 | $5 | |
| Michigan | Dry | $105 | $100 | $5 | |
| Minnesota | Dry | $95 | $90 | $5 | |
| Nebraska | Dry | $110 | $105 | $5 | |
| New York | Dry | $165 | $165 | $0 | |
| North Dakota | Dry | $110 | $105 | $5 | |
| Ohio | Dry | $105 | $105 | $0 | |
| South Dakota | Dry | $100 | $95 | $5 | |
| Wisconsin | Dry | $95 | $90 | $5 | |
| Valero Energy Corp., San Antonio, TX (402-727-5300) | |||||
| Indiana | Dry | $110 | $100 | $10 | |
| Iowa | Dry | $110 | $100 | $10 | |
| Minnesota | Dry | $105 | $95 | $10 | |
| Nebraska | Dry | $105 | $100 | $5 | |
| Ohio | Dry | $110 | $100 | $10 | |
| South Dakota | Dry | $105 | $95 | $10 | |
| Western Milling, Goshen, California (559-302-1074) | |||||
| California | Dry | $200 | $180 | $20 | |
| *Prices listed per ton. | |||||
| Weekly Average | $103 | $98 | $5 | ||
| The weekly average prices above reflect only those companies DTN | |||||
| collects spot prices from. States include: Missouri, Iowa, Nebraska, | |||||
| Kansas, Illinois, Minnesota, North Dakota, South Dakota, Michigan, | |||||
| Wisconsin and Indiana. Prices for Pennsylvania, New York and | |||||
| The weekly average prices above reflect only those companies DTN |
| collects spot prices from. States include: Missouri, Iowa, Nebraska, |
| Kansas, Illinois, Minnesota, North Dakota, South Dakota, Michigan, |
| Wisconsin and Indiana. Prices for Pennsylvania, New York and |
| California are not included in the averages. |
*The spot prices gathered by DTN are only intended to reflect general market trends and may vary. Please contact individual plant or merchandiser for exact prices.
If you would be willing to take a weekly phone call and have your distiller grains spot prices listed in this feature, please contact Cheryl Anderson at (308) 224-1527 or (800) 369-7875, or e-mail cheryl.anderson@dtn.com.
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| VALUE OF DDG VS. CORN & SOYBEAN MEAL | ||||
| Settlement Price: | Quote Date | Bushel | Short Ton | |
| Corn | 10/30/2014 | $3.7400 | $133.57 | |
| Soybean Meal | 10/30/2014 | $380.00 | ||
| DDG Weekly Average Spot Price | $103.00 | |||
| DDG Value Relative to: | 11/7 | 10/24 | 10/17 | |
| Corn | 77.11% | 76.28% | 77.10% | |
| Soybean Meal | 27.11% | 28.99% | 28.99% | |
| Cost Per Unit of Protein: | ||||
| DDG | $4.12 | $3.92 | $3.88 | |
| Soybean Meal | $8.00 | $7.42 | $7.04 | |
| Notes: | ||||
| Corn and soybean prices taken from DTN Market Quotes. DDG | ||||
| price represents the average spot price from Midwest | ||||
| companies collected on Thursday afternoons. Soybean meal | ||||
| cost per unit of protein is cost per ton divided by 47.5. | ||||
| DDG cost per unit of protein is cost per ton divided by 25. | ||||
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USDA MARKET NEWS/DISTILLER GRAINS PRICES
USDA WEEKLY DISTILLERS GRAINS SUMMARY (Oct 24, 2014)
| Dried | Modified | Wet | |
| FOB PLANT PRICES PER TON | |||
| Iowa | 90.00-120.00 | 40.00-50.00 | 22.00-32.00 |
| Minnesota | 88.00-100.00 | 35.00 | 35.00 |
| Nebraska | 98.00-120.00 | 45.00-65.00 | 38.00-47.00 |
| South Dakota | 87.00-100.00 | 45.00-55.50 | 23.00-25.00 |
| Wisconsin | 90.00-100.00 | 40.00-45.00 | NQ |
| Eastern Corn Belt | 81.00-110.00 | 40.00-52.00 | NQ |
| Kansas | 115.00-135.00 | NQ | 40.00-52.00 |
| Northern Missouri | 100.00-120.00 | NQ | 34.00-37.00 |
| DELIVERED PRICES PER TON | |||
| CIF NOLA | 148.00-160.00 | ||
| Pacific Northwest | 168.00-180.00 | ||
| California | 165.00-165.00 | ||
| Texas Border (metric ton) | 185.00-200.00 | ||
| Lethbridge AB | 135.00-155.00 | ||
| Chicago | 85.00-100.00 | ||
Dried Distillers Grain: 10% Moisture
Modified Wet Distillers: 50-55% Moisture
Wet Distillers Grains: 65-70% Moisture
CALIFORNIA WHOLESALE FEEDSTUFF PRICES (Tue Oct 28, 2014)
Distillers Dry Grains
Rail to California Points 197.00 up 29.00-20.00
FOB Truck to California Points 194.00 up 16.00-10.00
PACIFIC NORTHWEST WEEKLY FEED (Tue Oct 28, 2014)
Offers for Distillers Dried Grains delivered in September by rail to feed mills in the Pacific Northwest were 10.00 to 12.00 higher, from 185.00-195.00. Offers for distillers dried grains trans-loaded onto trucks and delivered during September to Willamette Valley dairies were also 10.00 to 12.00 higher, from 203.00-210.00.
*All prices quoted per ton unless otherwise noted.
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RFA WEEKLY U.S. LIVESTOCK FEED PRODUCTION
| CO-PRODUCT OUTPUTS (metric tons) | |||||
| Week Ending | Distillers Grains | Corn Gluten Feed | Corn Gluten Meal | Total Feed | Corn Oil (lbs.) |
| 10/03/14 | 89038 | 9205 | 1705 | 99947 | 5300612 |
| 10/10/14 | 87457 | 9041 | 1674 | 98173 | 5206484 |
| 10/17/14 | 88544 | 9154 | 1695 | 99393 | 5271197 |
| 10/24/14 | 92596 | 9572 | 1773 | 103941 | 5512401 |
*Information from 2010 Weekly U.S. Fuel Ethanol/Livestock Feed Production report (http://www.ethanolrfa.org/…)
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DDG LINKS/RESOURCES
Organizations
*Distillers Grains Technology Council
http://www.distillersgrains.org
*National Corn Growers Association Corn Distillers Grains Brochure
*Iowa Corn
Nebraska Corn Board
*Renewable Fuels Association - Ethanol Co-Products
*American Coalition for Ethanol
*U.S. Grains Council
*South Dakota Corn Utilization Council
http://www.drieddistillersgrains.com
Government Sites
*Iowa Department of Agriculture and Land Stewardship/Office of Renewable Fuels & Coproducts
http://www.distillersgrains.com
University Sites
*University of Minnesota - Distillers Grains By-Products in Livestock
and Poultry Feed
*University of Illinois - Illinois Livestock Integrated Focus Team Distillers Grains site
http://ilift.traill.uiuc.edu/…
*University of Nebraska - Beef Cattle Production By-Product Feeds site
*University of Nebraska Extension
*Iowa Beef Center - Iowa State University
http://www.iowabeefcenter.org/…
*University of Missouri - Byproducts Resource Page
*South Dakota State University - Dairy Science Department - Dairy cattle research
(select "Distillers Grains" from the topic menu)
*Purdue University Renewable Energy Web Site
http://www.extension.purdue.edu/…
(select "Biofuels Co-Products from the menu)
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DDG CONFERENCES
If you are sponsoring or know of any event, conference or workshop on distillers grains, and would like to list it in the DTN Weekly Distillers Grains Update, please contact Cheryl Anderson (see contact info below).
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We welcome any comments/suggestions for this feature. Please let us know what information is valuable to you that we could include in the Distillers Grains Weekly Update. Please feel free to contact Cheryl Anderson at cheryl.anderson@dtn.com.
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