DTN Weekly Distillers Grains Update

DDG Price Freefall Begins to Slow Down

The long, downward fall in prices of dried distillers grains may indeed be ending, or at least slowing down, due to plentiful supplies, the falling corn board and the continuing absence of demand from China.

The DTN weekly DDG spot price average fell another $4 per ton in the past week, from $135 last week to $131 this week. This is the lowest point the average has reached since the first week of October 2010.

The average has now fallen for the past 15 weeks in a row, dropping a whopping $108 per ton during that time -- from $239 per ton during the first week of April to this week's average of $131 per ton.

Of the 37 Midwestern locations DTN collects spot prices from, 17 locations reported their prices had decreased between $5 and $10 per ton in the past week. Prices remained unchanged at 19 locations, while only one location reported a price increase of $5.

Merchandisers told DTN lower corn and soybean meal prices led to a slight drop in DDG prices, though most reported a slow week with not a lot of buying.

Also, decent weather and rain led to hopes for a plentiful harvest, which is keeping prices down.

However, the situation with China still has the market on edge. After China announced it would no longer issues permits for imports of U.S. DDG containing Syngenta's MIR 162 GMO trait, demand from China dropped considerably. Those decreases made a serious dent in U.S. DDG exports, as China is the U.S.' largest buyer. Consequently, DDG prices took an immediate and unprecedented nosedive.

Currently, existing permits are still being honored and contracts are still being written, but the lack of exports and China's more stringent inspections are still making the market uneasy as we await China's next move. China is still rejecting shipments of DDG containing the trait as well, forcing sellers to search for low-cost opportunities to re-route, and often at a lower price.

A bit of good news is that the lower prices have also renewed interest in DDG with livestock producers increasing inclusion rates and "using the heck out of it," as one merchandiser commented.

The value of DDG relative to corn this week was at about 97%, dramatically lower than the values that remained above 100%, sometimes rising as high as 140%, since April 2013. The value of DDG relative to soybean meal this week was about 35%.

The cost per unit of protein for DDG was at $5.24 this week, compared to the cost per unit of protein for soybean meal at $8.01.

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

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IN THE NEWS

China's DDGS Stance Opens New Markets

Interest in U.S.-produced dried distillers grains with solubles has increased after China's ban on Syngenta's MIR 162 GMO trait began a new regiment of stringent inspections and a ban on new exports permits.

According to an article by the U.S. Grains Council (http://bit.ly/…), the disruption in DDGS trade with China, has sparked interest in other markets which are seeking to take advantage of DDGS which has been rejected by Chinese authorities.

The first country to look to the U.S. for DDGS imports was Taiwan, which increased its imports of U.S. DDGS in June, about 13% of which was rejected in China and rerouted. The council reported that it is in close contact with the Taiwanese feed industry, which is aware of the opportunity of buying DDGS rejected by China.

Mexico, a major market for U.S. DDGS, is also snatching up product because of the uncharacteristically low prices at present.

Interest from buyers in Europe, the Middle East and North Africa is also rising, and the Council is working to establish new contacts in these regions. The council is also continuing to focus on its efforts to normalize the situation in China.

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

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DTN WEEKLY DISTILLERS GRAIN SPOT PRICES

CURRENT PREVIOUS
COMPANY STATE 7/18/1900 7/11/1900 CHANGE
Bartlett and Company, Kansas City, MO (816-753-6300)
Missouri Dry $140 $150 -$10
Modified $70 $75 -$5
CHS, Minneapolis, MN (800-769-1066)
Illinois Dry $150 $155 -$5
Indiana Dry $140 $150 -$10
Iowa Dry $130 $140 -$10
Michigan Dry $175 $185 -$10
Minnesota Dry $110 $110 $0
North Dakota Dry $110 $115 -$5
New York Dry $150 $155 -$5
South Dakota Dry $110 $115 -$5
Hawkeye Gold, IA (515-663-6413)
Iowa Dry $127 $135 -$8
Modified $44 $50 -$6
MGP Ingredients, Atchison, KS (800-255-0302 Ext. 5253)
Kansas Dry $130 $135 -$5
POET Nutrition, Sioux Falls, SD (888-327-8799)
Indiana Dry $140 $150 -$10
Iowa Dry $120 $120 $0
Michigan Dry $170 $170 $0
Minnesota Dry $115 $115 $0
Missouri Dry $145 $145 $0
Ohio Dry $145 $155 -$10
South Dakota Dry $110 $115 -$5
United BioEnergy, Wichita, KS (316-616-3521)
Kansas Dry $145 $145 $0
Wet $50 $50 $0
Illinois Dry $165 $175 -$10
Nebraska Dry $145 $145 $0
Wet $50 $50 $0
Wisconsin Dry $165 $165 $0
U.S. Commodities, Minneapolis, MN (888-293-1640)
Illinois Dry $145 $140 $5
Indiana Dry $140 $140 $0
Iowa Dry $115 $115 $0
Michigan Dry $150 $150 $0
Minnesota Dry $105 $105 $0
Nebraska Dry $115 $115 $0
New York Dry $160 $160 $0
North Dakota Dry $105 $105 $0
Ohio Dry $150 $155 -$5
South Dakota Dry $105 $105 $0
Wisconsin Dry $128 $130 -$2
Valero Energy Corp., San Antonio, TX (402-727-5300)
Indiana Dry $145 $150 -$5
Iowa Dry $110 $110 $0
Minnesota Dry $105 $105 $0
Nebraska Dry $110 $110 $0
Ohio Dry $150 $155 -$5
South Dakota Dry $100 $100 $0
Western Milling, Goshen, California (559-302-1074)
California Dry $195 $200 -$5
*Prices listed per ton.
Weekly Average $131 $135 -$4
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 7/17/2014 $3.7950 $135.54
Soybean Meal 7/17/2014 $380.50
DDG Weekly Average Spot Price $131.00
DDG Value Relative to: 7/18 7/11 7/4
Corn 96.65% 94.38% 96.69%
Soybean Meal 34.43% 31.08% 32.21%
Cost Per Unit of Protein:
DDG $5.24 $5.40 $5.76
Soybean Meal $8.01 $9.14 $9.41
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 (July 11, 2014)

Dried Modified Wet
FOB PLANT PRICES PER TON
Iowa 100.00-145.00 45.00-70.00 30.00-40.00
Minnesota 110.00-125.00 60.00 40.00-45.00
Nebraska 125.00-145.00 58.00-72.00 38.00-50.00
South Dakota 105.00-119.50 60.00-63.00 28.00-38.00
Wisconsin 150.00-170.00 68.00-90.00 NQ
Eastern Corn Belt 140.00-175.00 80.00-90.00 NQ
Kansas 138.00-155.00 NQ 49.00-60.00
Northern Missouri 140.00-150.00 NQ 47.00-60.00
DELIVERED PRICES PER TON
CIF NOLA 160.00-180.00
Pacific Northwest 175.00-187.00
California 175.00-197.00
Texas Border (metric ton) 215.00-235.00
Lethbridge AB 155.00
Chicago 165.00-180.00

Dried Distillers Grain: 10% Moisture
Modified Wet Distillers: 50-55% Moisture
Wet Distillers Grains: 65-70% Moisture

CALIFORNIA WHOLESALE FEEDSTUFF PRICES (Tue Jul 15, 2014)

Distillers Dry Grains 
  Rail Delivered California Points    184.00  dn 19.00-41.00
  Truck California Points             190.00  dn 31.00-35.00
PACIFIC NORTHWEST WEEKLY FEED (Tue Jul 15, 2014)
Offers for Distillers Dried Grains delivered in June by rail to feed mills in the Pacific Northwest were 20.00 to 28.00 lower, from 170.00-185.00.  Offers for distillers dried grains trans-loaded onto trucks and delivered during June to Willamette Valley dairies were 20.00 to 30.00 lower, from 188.00-200.00.

*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.)
6/20/14 93326 9583 1775 104684 4885388
6/27/14 94819 9736 1803 106358 4963513
7/04/14 92232 9470 1754 103456 4828097
7/11/14 93824 9634 1784 105242 4911430

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*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

http://ncga.com/…

*Iowa Corn

http://www.iowacorn.org/…

Nebraska Corn Board

http://www.nebraskacorn.org/…

*Renewable Fuels Association - Ethanol Co-Products

http://www.ethanolrfa.org/…

*American Coalition for Ethanol

http://www.ethanol.org/…

*U.S. Grains Council

http://www.grains.org/…

*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

http://www.ddgs.umn.edu

*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

http://beef.unl.edu/…

*University of Nebraska Extension

http://ianrpubs.unl.edu/…

*Iowa Beef Center - Iowa State University

http://www.iowabeefcenter.org/…

*University of Missouri - Byproducts Resource Page

http://agebb.missouri.edu/…

*South Dakota State University - Dairy Science Department - Dairy cattle research

http://dairysci.sdstate.edu/…

(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 (402) 364-2183-1527, or e-mail cheryl.anderson@dtn.com.

(PH/GH/ES/SK­)

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