Ethanol Blog

Ethanol producers found some strength in prices last week, as some tightness in the nearby pushed prices upward.

The DTN weekly DDG spot price average rose $3 per ton, from $120 per ton the prior week to $123 per ton last week. This is the third week in a row the average has increased, rising a total of $7 per ton in that time, from $116 per ton in mid-October to $123 last week. This follows a long downward trend that lasted approximately 12 weeks, from a high of $148 in late July.

Of the 36 Midwestern locations DTN collects spot prices from, a total of 22 locations reported their spot prices had increased between $2 per ton and $10 per ton, although most price increases were in the $3 to $5 per-ton range. Prices at 14 locations remained unchanged. No price decreases were reported.

Merchandisers told DTN the higher DDG values correlate to a jump in basis. Although DDG prices have been strengthening, the value is still in the same ballpark as corn.

There is some tightness in supplies in some areas, but it seems to be localized and somewhat spotty. Any tightness seems to be on the nearby, one merchandiser commented.

The recent rumors about China possibly beginning another anti-dumping lawsuit against the U.S. are not having as much of an effect on the market as in the past.

One merchandiser said the reaction might be different if China was pulling big volumes of DDG from the U.S., but it is not buying that much right now. He said that other countries like Korea and Vietnam are stepping up their DDG imports, so that is helping take up some of the slack.

The value of DDG relative to corn last week was at about 92%, up from the prior week's 88%. The value of DDG relative to soybean meal was at about 42% last week.

The cost per unit of protein for DDG was about $.92 last week, compared to the cost per unit of protein for soybean meal at $6.24.

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

(ES)

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