Going into Memorial Day, DDGS pricing is still being overly influenced by Chinese demand. There were a lot of tons booked earlier in the year for the first and second quarters, and a medium amount for the third quarter, and the resulting demand pushed prices above what made sense for U.S. domestic feeders. &nbsp;Since the middle of March, that demand has slowed, and the resulting price decline has created prices that have begun to work back into U.S. rations.
At the same time DDGS is getting cheaper, the market is also now being faced with the effects of the H5N1 bird flu, which is decimating the poultry industry, mostly in the Midwest.&nbsp; To date, it has resulted in the deaths of more than 34 million birds, which in the central part of the U.S., would have been potential consumers of the lower priced DDGS that is being seen there right now, as well as the corn and soymeal that normally competes with distillers grains in feed rations.&nbsp; This catastrophe has kept a lid on any big upward price moves in the U.S. market in the near future.
But the Chinese market is still going to be the biggest influence in the weeks ahead.&nbsp; DDGS are still well priced versus China&rsquo;s domestic corn that is being offered for sale, hence the reason for demand.&nbsp; But another good crop year would strain whatever storage capacity the Chinese have left, and current supplies will more than likely need to be priced to move.&nbsp; For a U.S. DDGS market that is being overly influenced by Chinese demand, that will determine prices as much, or more, than the condition of the U.S. crop.&nbsp;

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Going into Memorial Day, DDGS pricing is still being overly influenced by Chinese demand. However, demand has slowed, and the resulting price decline has created prices that have begun to work back into U.S. rations.

Commodities: Price decline brings DDGS back into US rations

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