DTN Weekly Distillers Grains Update
China's MIR 162 Approval, Though Still Not Official, Pushes Up DDGS Prices
DAVENPORT, Neb. (DTN) -- After days of rumors that China had finally approved a controversial GMO trait, no official word has yet been received. However, talk in the industry of China purchasing dried distillers grains with solubles once again has caused DDGS prices to spike.
A number of media outlets and news releases from ag organizations and companies reported this week that Chinese Vice Premier Wang Yang had indicated the Ministry of Agriculture had ended its ban on several GMO traits -- including Syngenta's MIR 162, known as Agriculture Viptera, and two varieties of GMO soybeans.
The trade dilemmas began in mid-December 2013 as China began rejecting shipments of U.S. DDGS because of the presence of MIR 162, which it had not yet approved. Prices of DDGS began to plummet, but fell even more in June when China announced it would stop issuing permits for imports of DDGS. In July, China demanded that any DDGS arriving in Chinese ports be accompanied by an official letter of certification that it contained no trace of MIR 162. The U.S. did not comply as no such certification exists.
Several news sources reported this week that U.S. Agriculture Secretary Tom Vilsack appeared to have confirmed China's decision at a meeting Wednesday in Chicago between U.S. and Chinese officials. Vilsack said Vice Premier Yang told him the biotech events had been approved.
Other efforts to confirm that news have not been successful.
Melissa Kessler, director of communications for the U.S. Grains Council, told DTN Tuesday that the news has not been confirmed.
"Right now, what we can say is that we are encouraged by the news we are hearing out of China. It cannot yet be confirmed; we hope for confirmation in the coming days. We continue to work in Washington and Beijing on this issue," Kessler said.
Syngenta has not confirmed the approval either, telling DTN the company is still waiting to receive the official documentation from China. Syngenta will not make an official announcement until that documentation has been received.
The past week also brought other rumors that China was once again importing U.S. dried distillers grains with solubles. Some news sources even reported that a limited number of initial shipments had already arrived with no problems.
Joel Karlin, contributing DTN market analyst and commodity manager for Western Milling in Goshen, Calif., said last week that some rumors reported China may have already imported up to 500,000 tons of DDGS in recent weeks.
Those rumors seemed to play a large role in a steep price hike in DDGS in the past two weeks. With the market seeing China possibly re-emerging as a major player, prices have escalated.
The DTN weekly DDGS spot price average has risen a total of $40 per ton in the past week, rising from $124 per ton two weeks ago, to $140 per ton last week, to $164 this week.
Merchandisers told DTN this week that the price hikes are due largely to China re-launching its DDGS purchasing, creating more demand for product and tightening up supplies.
Although most U.S. DDGS exporters have found other homes for product formerly destined for China, resurgence in trade would be welcomed, as China has been the single largest buyer of U.S. DDGS in recent years.
Between January and October 2014, China imported 4.2 million metric tons of U.S. DDGS at a value of $1.2 billion. Mexico was the second-largest buyer, importing $1.3 million metric tons at a value of $315 million.
TRADE DISRUPTIONS IN TURKEY
Reports were received last week that Turkey had rejected several shipments of U.S. DDGS because of change in the country's laws restricting certain strains of GMO corn, which would also be present in DDGS.
The Grains Council reported Dec. 11 that Turkey would no longer accept imports of U.S. corn co-products due to stepped-up enforcement of laws restricting certain varieties of GM corn. The council reported that three shipments of U.S. DDGS had been rejected following detection of unapproved GM events, and at least one other vessel containing U.S. DDGS had been diverted from Turkey to another buyer.
The council alerted its members last week that shipments of DDGS and other corn co-products are likely to be rejects. While options for quick recourse are limited, the council expressed its intentions to work with contacts in Turkey and the U.S. Embassy in Ankara to find solutions and reopen the market.
Kessler told DTN Wednesday the Grains Council had no new information on the situation in Turkey since last week.
Turkey was the sixth largest importer of U.S. DDGS from January-October 2014, importing a total of about 385,431 metric tons at a value of about $98 million.
Cheryl Anderson can be reached at Cheryl.anderson@dtn.com.
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IN THE NEWS
New Cellulosic Ethanol Made From Corn Kernel Fiber
A new cellulosic ethanol system is being utilized by an Iowa company which produces ethanol from corn kernel fiber, according to an article by Farm Industry News (http://bit.ly/…).
The new technology, utilized by Quad County Corn Processors in Galva, Iowa, has been named Cellerate and is a collaboration between Syngenta and Cellulosic Ethanol Technologies, LLC, a subsidiary of QCCP. The concept began at QCCP in 2009 with a technology called Adding Cellulosic Ethanol (ACE). Syngenta signed an agreement to license the process and act as marketer in 2014 and the name was changed to Cellerate.
Cellerate uses the corn kernel, which is comprised of about 8% fiber. The fiber is taken out of the corn as it leaves the ethanol production process, and before it becomes dried distillers grains.
Other cellulosic ethanol plant in the U.S. use plant fibers like corn stover for ethanol production, but the Cellerate process uses the corn purchased to make ethanol, just adding a second fermentation process.
The process removes the kernel fiber, making the resulting distillers grains a high protein, low fiber feed product that resembles soybean meal in protein content.
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The technology is expected to boost ethanol production by about 6%, as well as increasing the amount of corn oil that can be extracted from each bushel of corn.
WASDE Report Predicts Slightly Higher Supplies of Corn-Based Feed
More corn-based feed will be available next year, according to commentary on the recent World Agricultural Supply and Demand Estimates Report in the Daily Livestock Report written by Steve Meyer and Len Steiner (http://bit.ly/…).
The total of corn available above the level used for ethanol has now returned to the levels seen in 2008-2009 when the 2007 energy act began. However, "non-ethanol" corn supplies currently remain at 1.227 billion bushels less than in 2004-2005.
Meyer and Steiner wrote, "To be fair, we must add in domestically available DDGS supplies and that puts the total supply of corn-based feed ingredients slightly higher than it was in 2004."
They continue to state that although not all DDGS are used to replace corn, "...their availability for whatever purpose in formulating feed rations is very important and must be recognized."
The two also predict that corn-based feed usage will remain relatively unchanged in 2015, similar to trends 10 year ago. However, total meat and poultry output will be significantly higher, they said.
Cheryl Anderson can be reached at Cheryl.anderson@dtn.com.
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DTN WEEKLY DDG SPOT PRICES
| CURRENT | PREVIOUS | ||||
| COMPANY | STATE | 12/19/2014 | 12/12/2014 | CHANGE | |
| Bartlett and Company, Kansas City, MO (816-753-6300) | |||||
| Missouri | Dry | $182 | $140 | $42 | |
| Modified | $85 | $75 | $10 | ||
| CHS, Minneapolis, MN (800-769-1066) | |||||
| Illinois | Dry | $175 | $160 | $15 | |
| Indiana | Dry | $180 | $155 | $25 | |
| Iowa | Dry | $160 | $130 | $30 | |
| Michigan | Dry | $165 | $140 | $25 | |
| Minnesota | Dry | $155 | $120 | $35 | |
| North Dakota | Dry | NA | $125 | ||
| New York | Dry | $205 | $160 | $45 | |
| South Dakota | Dry | $170 | $125 | $45 | |
| Hawkeye Gold, IA (515-663-6413) | |||||
| Iowa | Dry | NA | NA | ||
| Modified | NA | NA | |||
| MGP Ingredients, Atchison, KS (800-255-0302 Ext. 5253) | |||||
| Kansas | Dry | $165 | $150 | $0 | |
| POET Nutrition, Sioux Falls, SD (888-327-8799) | |||||
| Indiana | Dry | $160 | $140 | $20 | |
| Iowa | Dry | $160 | $120 | $40 | |
| Michigan | Dry | $155 | $150 | $5 | |
| Minnesota | Dry | $150 | $115 | $35 | |
| Missouri | Dry | $170 | $140 | $30 | |
| Ohio | Dry | $160 | $140 | $20 | |
| South Dakota | Dry | $160 | $120 | $40 | |
| United BioEnergy, Wichita, KS (316-616-3521) | |||||
| Kansas | Dry | $165 | $135 | $30 | |
| Wet | $70 | $55 | $15 | ||
| Illinois | Dry | $180 | $150 | $30 | |
| Nebraska | Dry | $165 | $135 | $30 | |
| Wet | $70 | $55 | $15 | ||
| U.S. Commodities, Minneapolis, MN (888-293-1640) | |||||
| Illinois | Dry | $170 | $145 | $25 | |
| Indiana | Dry | $160 | $145 | $15 | |
| Iowa | Dry | $160 | $145 | $15 | |
| Michigan | Dry | $160 | $145 | $15 | |
| Minnesota | Dry | $155 | $140 | $15 | |
| Nebraska | Dry | $170 | $150 | $20 | |
| New York | Dry | $200 | $195 | $5 | |
| North Dakota | Dry | $165 | $150 | $15 | |
| Ohio | Dry | $165 | $145 | $20 | |
| South Dakota | Dry | $165 | $145 | $20 | |
| Wisconsin | Dry | $165 | $148 | $17 | |
| Valero Energy Corp., San Antonio, TX (402-727-5300) | |||||
| Indiana | Dry | $180 | NA | ||
| Iowa | Dry | $150 | NA | ||
| Minnesota | Dry | $140 | NA | ||
| Nebraska | Dry | $170 | NA | ||
| Ohio | Dry | $180 | NA | ||
| South Dakota | Dry | $140 | NA | ||
| Western Milling, Goshen, California (559-302-1074) | |||||
| California | Dry | $235 | $235 | $0 | |
| *Prices listed per ton. | |||||
| Weekly Average | $164 | $140 | $23 | ||
| 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 | 12/18/2014 | $4.1100 | $146.79 | |
| Soybean Meal | 12/18/2014 | $365.30 | ||
| DDG Weekly Average Spot Price | $163.00 | |||
| DDG Value Relative to: | 12/19 | 12/12 | 12/5 | |
| Corn | 111.05% | 100.51% | 84.02% | |
| Soybean Meal | 44.62% | 34.47% | 30.20% | |
| Cost Per Unit of Protein: | ||||
| DDG | $6.52 | $5.60 | $4.48 | |
| Soybean Meal | $7.69 | $8.55 | $7.81 | |
| 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 (Dec 12, 2014)
| Dried | Modified | Wet | |
| FOB PLANT PRICES PER TON | |||
| Iowa | 112.00-140.00 | 55.00-70.00 | 28.00-40.00 |
| Minnesota | 110.00-120.00 | 50.00 | 40.00 |
| Nebraska | 140.00-157.00 | 60.00-77.00 | 43.00-55.00 |
| South Dakota | 105.00-122.00 | 52.00-64.00 | 38.00-42.00 |
| Wisconsin | 115.00-130.00 | 50.00-60.00 | NQ |
| Eastern Corn Belt | 125.00-160.00 | 50.00-53.00 | NQ |
| Kansas | 135.00-150.00 | NQ | 50.00-60.00 |
| Northern Missouri | 135.00-138.00 | NQ | 42.00-45.00 |
| DELIVERED PRICES PER TON | |||
| CIF NOLA | 195.00-227.00 | ||
| Pacific Northwest | 220.00-225.00 | ||
| California | 220.00-232.00 | ||
| Texas Border (metric ton) | 240.00-262.00 | ||
| Lethbridge AB | 200.00-210.00 | ||
| Chicago | 154.00-168.00 | ||
Dried Distillers Grain: 10% Moisture
Modified Wet Distillers: 50-55% Moisture
Wet Distillers Grains: 65-70% Moisture
CALIFORNIA WHOLESALE FEEDSTUFF PRICES (Tue Dec 16, 2014)
Distillers Dry Grains
Rail to California Points 225.00-248.00 dn 3.00-up 18.00
FOB Truck to California Points 240.00-257.00 up 25.00-32.00
PACIFIC NORTHWEST WEEKLY FEEDSTUFFS (Tue Dec 16, 2014)
Distillers Dried Grains: Offers for Distillers Dried Grains delivered in September by rail to feed mills in the Pacific Northwest were steady to 10.00 higher from 225.00-239.00. Offers for distillers dried grains trans-loaded onto trucks and delivered to Willamette Valley dairies were also steady to 10.00 higher from 244.00-254.00.
*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.) |
| 11/21/14 | 97043 | 10032 | 1858 | 108933 | 5777138 |
| 11/28/14 | 95066 | 9828 | 1820 | 106714 | 5659477 |
| 12/05/14 | 97636 | 10093 | 1869 | 109598 | 5812436 |
| 12/12/14 | 97833 | 10114 | 1873 | 109820 | 5824202 |
*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 (402) 364-2183, or e-mail cheryl.anderson@dtn.com.
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