DDGS market rebounds as winter weather returns

By Sean Broderick, CHS | November 25, 2014

With Thanksgiving around the corner, markets have rebounded a little, as colder-than-normal weather has induced more domestic feeding demand. The higher protein prices that existed at the end of last month did abate a little this month, but the tightness is still there and DDGS is being purchased as an alternative. Buyers also feel as though a Chinese solution is right around the corner, and don’t want to get caught with an empty pipeline, so they are buying with cautious optimism.

In spite of buyer optimism, there still is not a pathway established to easily import containers into China. Discussions are in progress and there have been windows of encouragement from the Chinese government. Imports are still occurring, according to the monthly statistics, and traders are hopeful of that continuing.  

Bulk exports have been on the rise, but during the month it was confirmed that some boats bound for Turkey were turned away, ostensibly because of a nonapproved genetic trait. Since that news, though, we still see boats being loaded on a fairly regular basis, so it appears that it has not hampered additional trades.

Rail movements domestically are still slow, but buyers have gotten used to it and are either ordering appropriately, or are using other products. Truck prices locally are still a wide discount to rail, which is a big benefit to Midwestern feeders, and inclusion rates are still high.

Looking ahead, weather is becoming a bigger part of the pricing picture, and the cold and snow in places like Buffalo, New York, are sure to affect the run times of ethanol plants whose ethanol railcars are trapped out there. Also, any Chinese news is sure to affect future prices.

 

 



DDGS Prices ($/ton)



LOCATION

January 2015

December 2014

January 2014

Minnesota

95

95

210

Chicago

125

100

245

Buffalo, N.Y.

130

130

220

Central Calif.

195

169

288

Central Fla.

160

145

274