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DDG Weekly Update
Mary Kennedy 1/12 12:19 PM
OMAHA (DTN) -- The DTN average distillers dried grain (DDG) spot price from the 39 locations DTN collects bids from was $142 for the week ended Jan. 11, 4 cents higher than two weeks ago.
Based on the average of bids collected by DTN, the value of DDG relative to corn for the week ended Jan. 11 was at 114.00%, and the value of DDG relative to soybean meal was at 45.87%. The cost per unit of protein for DDG was $5.26, compared to the cost per unit of protein for soybean meal at $6.52.
Merchandisers noted that the market is higher in part due to tight supplies as ethanol plants have been running at a slower pace than normal. The EIA reported ethanol plant production in the United States fell 36,000 barrels per day (bpd) to a 996,000 bpd three-month low for the week ending Jan. 5. Higher drying costs and tight margins have been contributing factors to the slowdown.
Merchandisers told me that containers destined for Vietnam in the Midwest are still waiting to be fumigated but can't be because of the cold weather. As discussed last week, Vietnam requires temperatures (for this time of year) to be 50 to 59 degrees Fahrenheit for a minimum exposure period of five days. Also extreme ice conditions continue to plague the Illinois River where traffic is all but shut down.
American Commercial Barge Line noted Thursday that limited movement remains on the Illinois River with significant tow-size reduction. "The max tow size is nine barges below Hennepin and four barges above. One major trouble spot is the Marseilles Canal, around mile 245. There is significant ice buildup in this area, making it difficult to transit. The Marseilles Lock queue is building, currently 12 boats. Based on the current forecast, we don't anticipate returning to normal tow size for another 30 days." On top of these issues on the Illinois River, tow size southbound from St. Louis to Cairo on the Mississippi River has been reduced due to ice and low water conditions.
The U.S. Grains Council (USGC) said in its weekly price update that barge CIF NOLA prices are steady this week while FOB NOLA prices are $2/metric ton (MT) lower on light trading volume. "FOB NOLA prices are 124% of FOB NOLA corn values, which is at the upper end of the ratio's two-year trading range. Prices for 40-foot containers destined for Southeast Asia are $1/MT higher on average, but with light trading volume."
Mary Kennedy can be reached at firstname.lastname@example.org
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