Distillers Grains: Tightening Supplies from Reduced Ethanol Production – DTN

Large Pile of Dried Distillers Grains (DDGS) at Golden Grain Energy in Mason City, Iowa. Photo: Iowa Renewable Fuels Association

The domestic distillers dried grains average spot price from the 40 locations DTN contacted was $3 higher, at $164 per ton, for the week ended Dec. 20, versus one week ago. Prices ranged from unchanged to higher at the locations contacted, while California prices moved lower at the two spots listed in the table below.

DTN’s weekly DDG average price continued to rise for the month in part due to tight supplies as ethanol output the past few weeks has slowed. The EIA report at midweek showed ethanol production for the week ended Dec. 14 unchanged from the previous week, but 4% lower than the same week one year ago. In addition, some plants have idled, adding to the tight inventory situation.

Based on the average of prices collected by DTN, the value of DDG relative to corn for the week ended Dec. 20 was at 122.37%. The value of DDG relative to soybean meal was at 53.30%. The cost per unit of protein for DDG was $6.07, compared to the cost per unit of protein for soybean meal at $6.48. Informa Economics noted in their weekly DDG price update, “DDG prices are at a key juncture where it is possible that livestock rations start to shift towards lower inclusion of DDGs in favor of soymeal.”

In their weekly DDGS update, the U.S. Grains Council (USGC) noted, “DDGS at the U.S. Gulf are at $223/metric ton (mt) for January 2019 delivery. On average, 40-foot containers to Southeast Asian destinations were up $3/mt this week from last week. Prices for 40-foot containers to Malaysia ($250/mt) and Vietnam ($258/mt) are up $4/mt from last week’s figures. Prices for other international routes are firm to slightly higher.”

There have been reports of mycotoxin issues in parts of the Eastern Corn Belt and, according to merchandisers I spoke to, some areas in Michigan and Ohio that have higher DON levels are areas that are prone to higher DON corn. Plants are diligent in checking DDG samples to be sure the allowable tolerance is met before shipping to feeders; merchandisers said it has been manageable at this point.

In their 2018/2019 Corn Harvest Quality Report, USGC reported, “All but one sample, or 99.5% of samples, tested below the U.S. Food and Drug Administration (FDA) action level for aflatoxin (20 parts per billion). One-hundred percent of the samples tested below the FDA advisory level for deoxynivalenol (DON), or vomitoxin, for chicken, cattle, hogs and other animals.”

ALL PRICES SUBJECT TO CONFIRMATION CURRENT PREVIOUS CHANGE
COMPANY STATE 12/20/2018 12/13/2018
Bartlett and Company, Kansas City, MO (816-753-6300)
Missouri Dry $185 $185 $0
Modified $93 $93 $0
Show Me Ethanol LLC, Carrollton, MO (660-542-6493)
Missouri Subject Dry $180 $180 $0
Wet $90 $87 $3
CHS, Minneapolis, MN (800-769-1066)
Illinois Dry $165 $165 $0
Indiana Dry $160 $160 $0
Iowa Dry $160 $160 $0
Michigan Dry $155 $155 $0
Minnesota Dry $160 $160 $0
North Dakota Dry $170 $170 $0
New York Dry $165 $165 $0
South Dakota Dry $160 $160 $0
MGP Ingredients, Atchison, KS (800-255-0302 Ext. 5253)
Kansas Dry $170 $165 $5
POET Nutrition, Sioux Falls, SD (888-327-8799)
Indiana Dry $167 $160 $7
Iowa OUT* Dry* $180 $175 $5
Michigan Dry $145 $145 $0
Minnesota Dry $175 $175 $0
Missouri Dry $180 $180 $0
Ohio Dry $160 $158 $2
South Dakota Dry $165 $165 $0
United BioEnergy, Wichita, KS (316-616-3521)
Kansas Dry $150 $150 $0
Wet $60 $60 $0
Illinois Dry $160 $160 $0
Nebraska Dry $150 $150 $0
Wet $60 $60 $0
U.S. Commodities, Minneapolis, MN (888-293-1640)
Illinois Dry $155 $155 $0
Indiana Dry $155 $150 $5
Iowa Dry $170 $160 $10
Michigan Dry $155 $150 $5
Minnesota Dry $175 $160 $15
Nebraska Dry $180 $175 $5
New York Dry $180 $160 $20
North Dakota Dry $180 $165 $15
Ohio Dry $155 $150 $5
South Dakota Dry $170 $165 $5
Wisconsin Dry $150 $145 $5
Valero Energy Corp, San Antonio Texas (210-345-3362)
Indiana Dry $160 $155 $5
Iowa Dry $150 $150 $0
Minnesota Dry $160 $160 $0
Nebraska Dry $160 $155 $5
Ohio Dry $160 $155 $5
South Dakota Dry $160 $155 $5
California $225 $228 -$3
Western Milling, Goshen, California (559-302-1074)
California Dry $228 $232 -$4
*Prices listed per ton.
Weekly Average $164 $161 $3
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.
VALUE OF DDG VS. CORN & SOYBEAN MEAL
Settlement Price: Quote Date Bushel Short Ton
Corn 12/20/2018 $3.7525 $134.02
Soybean Meal 12/20/2018 $307.70
DDG Weekly Average Spot Price $164.00
DDG Value Relative to: 12/20 12/13
Corn 122.37% 120.05%
Soybean Meal 53.30% 52.03%
Cost Per Unit of Protein:
DDG $6.07 $5.96
Soybean Meal $6.48 $6.51
Notes:
Corn and soybean prices take 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 27.

Mary Kennedy can be reached at mary.kennedy@dtn.com

Follow her on Twitter @MaryCKenn


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