DDGS prices under high export demand, price appreciation

In late November, distillers grains prices shook off whatever corn harvest pressure buyers expected and steadied, if not gotten stronger. The domestic market, in particular, has borne the brunt of this lack of price movement, as the majority had been waiting for falling prices as a percentage of corn. Now domestic feeders are paying up to keep DDGS in their rations but mainly for the protein aspect of it. Protein meals worldwide are expensive, and both domestic and export markets are buying more DDGS for that aspect.  

Export markets remain brisk, with much of the feature being the logistics piece of getting containers loaded and shipped. Containers are occasionally in short supply, trucks have been difficult to get since the middle of summer and the harvest did not make them any more available. We have seen additional container transloading capacity being utilized outside of Chicago in places like Kansas City, southeastern ports and even Omaha.

Politically, the renewable fuel standard discussion is sure to impact DDGS supply for 2014, especially since a pretty decent amount of Chinese business has already been booked through the summer. And in China, there are regulations that affect DDGS registration with the Ministry of Agriculture, and talk of new regulations from AQSIQ (the General Administration of Quality Supervision, Inspection and Quarantine) that have the potential to affect demand over there.