DTN Weekly Distillers Grains Update
DDG Prices Rise Again
Prices of dried distillers grains rose $5 per ton for a second week in a row, as rising demand finally evened out the surplus product that ethanol plants had in store.
Last week, the DTN spot price average rose for the first time after an 18-week freefall in which the average fell a total of $138 per ton. The first week of August had brought the lowest point the average had seen in more than four years -- since the first week of April 2014.
After last week's increase of $106 per ton over the previous week's $101, this week the DTN spot price average rose another $5 to $111 per ton.
Part of the reason for the strengthening in prices is the ethanol plants have finally sold off some of their surplus product and are getting inventory under control. Consequently, there is no more need to sell-off DDG at lower prices.
However, the cheaper prices in recent months have served to help DDG recapture its place in many livestock rations. In fact, interest has strengthened recently from the swine and poultry segment, according to Michael Peterson, senior merchandiser for U.S. Commodities in Minneapolis.
"We are picking up some interest from the U.S. poultry and swine industries," he said. "After prices have been so high, DDG is beginning to work its way back into rations."
Others in the industry have told DTN the Mississippi River opening back up and barges moving once again are helping firm prices. Also, predictions that this year's corn crop may be slightly less than originally predicted is helping strengthen prices as well.
Peterson attributed some of the upward price trend to the fact that DDG once exported to China is finding new homes in other countries like Mexico.
China has been causing huge problems for the U.S. ethanol industry with its refusal to accept distillers grains containing the MIR 162 biotech trait. The country's latest move was a recent announcement that it would require each shipment of DDG into its ports to be accompanied by an official certification guaranteeing it contains none of the trait. Since no such certification exists and testing for the trait is largely unreliable, the U.S. is unlikely to agree to those terms.
The announcement brought trade of DDG with China to a virtual stop.
Peterson added that China is once again "honoring" their contracts of existing sales on the books, since the cost to cancel the contracts is so high.
"If China allows shipments to come into the country, and if it is able to get through customs and passes all the tests, it takes a lot of money on the table to do that," Peterson said. "DDG prices, even if taken at contract prices, can still make money -- as much as $80 to $100 over the market."
Peterson said for the time being he believes prices will stay steady to slightly higher, especially because of the lack of excess product.
He advised livestock producers needing to buy DDG that they should probably cover their needs for the next 30 days, and possibly consider locking up some product at least through December.
"There's still a lot of bearish consideration with the potential for such a large bean and corn crop," he said.
Cheryl Anderson can be reached at Cheryl.anderson@dtn.com.
-----------------------------------------------------------------------
IN THE NEWS
Court Supports Elevator in Biotech Clash
A federal appeals court has ruled that Syngenta cannot force the Bunge elevator company to accept its Agrisure Viptera biotech corn, according to an article by Capital Press (http://bit.ly/…).
Bunge told farmers it would not accept corn with the Viptera trait because it had not been accepted in some export destinations, mainly China. In response, Syngenta filed a lawsuit claiming Bunge violated a century-old law, the U.S. Warehouse Act of 1916, requiring elevators to treat depositors fairly. Syngenta also claimed Bunge's rejection of Viptera corn hurt the company's reputation and market share.
The court disagreed and ruled in favor of Bunge, stating that Syngenta lacked a "cause of action" to bring a case against Bunge in court.
The ruling will likely prevent other biotech seed companies from trying to force elevators to accept corn with biotech traits. Critics of biotechnology view the case as an example of how biotech crops can affect exports markets. Biotech proponents maintain the case emphasizes the need for a single method of approval of biotech crops to all importing countries, rather than approval being required by each country.
This is just the latest in a many battles over the genetically-modified corn, more commonly known as MIR 162. In recent months, the U.S. ethanol industry has engaged in many months of negotiations with China, which has been dragging its feet accepting the trait, even though it has been accepted as safe in the U.S. and most major export markets for some time. China's most recent move was an announcement that all shipments of DDGS to its ports must be accompanied by an official certification that it does not contain the MIR 162 trait. Since such certification does not exist and testing for the trait is somewhat unreliable, the mandate virtually brought DDGS exports to China to a stop. However, DTN has learned that China is still accepting some shipments from the U.S. from contracts still on the books.
U.S. DDGS, CGM Receive Malaysia Import Exemption
Malaysian trade officials announced recently the country will not permanently exempt imports of U.S. dried distillers grains with solubles and corn gluten meal from its new regulations for agricultural commodities, according to an article by the council (http://bit.ly/…).
Malaysia recently instituted more stringent sanitary, phytosanitary and inspection regulations that applied to all countries of origin, including the U.S. The regulations would have forced U.S. shipments of DDGS and CGM to be fumigated at the port of origin in order to meet strict phytosanitary certification.
P[L1] D[0x0] M[300x250] OOP[F] ADUNIT[] T[]
After the new regulations threatened to disrupt trade and possibly impose unnecessary costs on Malaysian buyers and consumers, Malaysia gave the U.S. a permanent exemption in May for July 31 through Dec. 31, 2014.
Adel Yusupov, the council's regional director for Southeast Asia, said that while Malaysia has experienced some problems with imports from some countries, U.S. DDGS and CGM have proved to be of high quality. That high quality has evidently convinced Malaysian officials that U.S. DDGS and CGM are safe and pose no threat to Malaysian agriculture.
Cheryl Anderson can be reached at Cheryl.anderson@dtn.com.
-----------------------------------------------------------------------
| CURRENT | PREVIOUS | ||||
| COMPANY | STATE | 8/22/2014 | 8/15/2014 | CHANGE | |
| Bartlett and Company, Kansas City, MO (816-753-6300) | |||||
| Missouri | Dry | $120 | $115 | $5 | |
| Modified | $65 | $60 | $5 | ||
| CHS, Minneapolis, MN (800-769-1066) | |||||
| Illinois | Dry | $125 | $120 | $5 | |
| Indiana | Dry | $125 | $120 | $5 | |
| Iowa | Dry | $125 | $110 | $15 | |
| Michigan | Dry | $125 | $130 | -$5 | |
| Minnesota | Dry | $100 | $100 | $0 | |
| North Dakota | Dry | $110 | $95 | $15 | |
| New York | Dry | $115 | $120 | -$5 | |
| South Dakota | Dry | $95 | $95 | $0 | |
| Hawkeye Gold, IA (515-663-6413) | |||||
| Iowa | Dry | NO | NO | #VALUE! | |
| Modified | NO | NO | #VALUE! | ||
| MGP Ingredients, Atchison, KS (800-255-0302 Ext. 5253) | |||||
| Kansas | Dry | $105 | $105 | $0 | |
| POET Nutrition, Sioux Falls, SD (888-327-8799) | |||||
| Indiana | Dry | $105 | $100 | $5 | |
| Iowa | Dry | $105 | $100 | $5 | |
| Michigan | Dry | $105 | $105 | $0 | |
| Minnesota | Dry | $105 | $100 | $5 | |
| Missouri | Dry | $125 | $120 | $5 | |
| Ohio | Dry | $100 | $95 | $5 | |
| South Dakota | Dry | $95 | $95 | $0 | |
| United BioEnergy, Wichita, KS (316-616-3521) | |||||
| Kansas | Dry | $110 | $105 | $5 | |
| Wet | $40 | $35 | $5 | ||
| Illinois | Dry | $130 | $125 | $5 | |
| Nebraska | Dry | $110 | $105 | $5 | |
| Wet | $40 | $35 | $5 | ||
| Wisconsin | Dry | NO | NO | #VALUE! | |
| U.S. Commodities, Minneapolis, MN (888-293-1640) | |||||
| Illinois | Dry | $120 | $120 | $0 | |
| Indiana | Dry | $120 | $120 | $0 | |
| Iowa | Dry | $110 | $105 | $5 | |
| Michigan | Dry | $120 | $120 | $0 | |
| Minnesota | Dry | $105 | $100 | $5 | |
| Nebraska | Dry | $100 | $100 | $0 | |
| New York | Dry | $125 | $125 | $0 | |
| North Dakota | Dry | $100 | $95 | $5 | |
| Ohio | Dry | $110 | $105 | $5 | |
| South Dakota | Dry | $100 | $95 | $5 | |
| Wisconsin | Dry | $105 | $100 | $5 | |
| Valero Energy Corp., San Antonio, TX (402-727-5300) | |||||
| Indiana | Dry | $120 | $110 | $10 | |
| Iowa | Dry | $110 | $100 | $10 | |
| Minnesota | Dry | $105 | $95 | $10 | |
| Nebraska | Dry | $110 | $100 | $10 | |
| Ohio | Dry | $120 | $110 | $10 | |
| South Dakota | Dry | $105 | $95 | $10 | |
| Western Milling, Goshen, California (559-302-1074) | |||||
| California | Dry | $190 | $175 | $15 | |
| *Prices listed per ton. | |||||
| Weekly Average | $111 | $106 | $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 | |||||
| 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.
-----------------------------------------------------------------------
| VALUE OF DDG VS. CORN & SOYBEAN MEAL | ||||
| Settlement Price: | Quote Date | Bushel | Short Ton | |
| Corn | 8/21/2014 | $3.6225 | $129.38 | |
| Soybean Meal | 8/21/2014 | $413.80 | ||
| DDG Weekly Average Spot Price | $111.00 | |||
| DDG Value Relative to: | 8/22 | 8/15 | 8/8 | |
| Corn | 85.80% | 81.99% | 78.66% | |
| Soybean Meal | 26.82% | 22.83% | 25.86% | |
| Cost Per Unit of Protein: | ||||
| DDG | $4.44 | $4.24 | $4.04 | |
| Soybean Meal | $8.71 | $9.77 | $8.22 | |
| 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. | ||||
-----------------------------------------------------------------------
USDA MARKET NEWS/DISTILLER GRAINS PRICES
USDA WEEKLY DISTILLERS GRAINS SUMMARY (Aug 15, 2014)
| Dried | Modified | Wet | |
| FOB PLANT PRICES PER TON | |||
| Iowa | 90.00-120.00 | 35.00-60.00 | 20.00-32.00 |
| Minnesota | 90.00-100.00 | 45.00 | 45.00 |
| Nebraska | 85.00-108.00 | 45.00-56.00 | 35.00-40.25 |
| South Dakota | 85.00-97.50 | 45.00-54.50 | 28.00-30.00 |
| Wisconsin | 90.00-110.00 | 40.00-50.00 | NQ |
| Eastern Corn Belt | 95.00-130.00 | 60.00-71.00 | NQ |
| Kansas | 110.00-125.00 | NQ | 40.00-50.00 |
| Northern Missouri | 120.00-125.00 | NQ | 35.00-38.00 |
| DELIVERED PRICES PER TON | |||
| CIF NOLA | 160.00-169.00 | ||
| Pacific Northwest | 161.00-168.00 | ||
| California | 165.00 | ||
| Texas Border (metric ton) | 175.00 | ||
| Lethbridge AB | 160.00 | ||
| Chicago | 120.00-130.00 | ||
Dried Distillers Grain: 10% Moisture
Modified Wet Distillers: 50-55% Moisture
Wet Distillers Grains: 65-70% Moisture
CALIFORNIA WHOLESALE FEEDSTUFF PRICES (Tue Aug 19, 2014)
Distillers Dry Grains
Rail to California Points 155.00-160.00 unch-dn 8.00
Truck to California Points 163.00-180.00 unch-up 15.00
PACIFIC NORTHWEST WEEKLY FEED (Tue Aug 19, 2014)
Offers for Distillers Dried Grains delivered in August by rail to feed mills in the Pacific Northwest were steady to 23.00 higher, from 163.00-195.00. Offers for distillers dried grains trans-loaded onto trucks and delivered during August to Willamette Valley dairies were also steady to 23.00 higher, from 181.00-210.00.
*All prices quoted per ton unless otherwise noted.
-----------------------------------------------------------------------
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.) |
| 7/25/14 | 94918 | 9746 | 1805 | 106469 | 4968721 |
| 8/01/14 | 89137 | 9215 | 1706 | 100058 | 5306495 |
| 8/08/14 | 92003 | 9511 | 1761 | 103275 | 5477103 |
| 8/15/14 | 92596 | 9572 | 1773 | 103941 | 5512401 |
*Information from 2010 Weekly U.S. Fuel Ethanol/Livestock Feed Production report (http://www.ethanolrfa.org/…)
-----------------------------------------------------------------------
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)
-----------------------------------------------------------------------
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).
-----------------------------------------------------------------------
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.
(AG/)
(PH/GH/ES/SKĂ‚Â)
Copyright 2014 DTN/The Progressive Farmer. All rights reserved.
