At the end of the first first week in December, the market had begun its appreciation in value, with the bulk market rising about $40 a ton, with widespread buying. Several weeks later, we started to see some stalling out of prices in the delivered markets like California, which had been demanding DDGS due to lack of competitive protein prices. Imports of things like canola meal from both Canada and Europe have dropped the basis about $75 a ton. Mexico, however, had not seen that kind of move, and still have been buying a lot of rail DDGS. There still has not been much, if any, container bookings to China, but the market is expecting it in the first quarter.
Looking ahead, we will have to see how the domestic market reacts to the price run up. DDGS is now priced well above the price of corn, in some places 120 to 130 percent (up from 90 percent in November). Another factor is how well railcars move in the system. &nbsp;Local trucks have been a huge discount to rail netbacks for ethanol plants due to the inability of plants to load everything out as rail. However, if cars move quicker&mdash;and we have seen them start to&mdash;it is less tons that must be sold to that local market. In the end though, the speed of the Chinese market&rsquo;s ability to begin shipping product again with regularity is going to influence prices the most.
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DDGS prices are, in some places, 120 to 130 percent above corn. Traders will keep an eye on how the domestic market reacts to the price run up, writes Sean Broderick of CHS Inc. 

DDGS priced well above corn

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