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DDGS Market Perspectives February 18, 2016

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Publish time: 24th February, 2016      Source: Grains Council
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Distillers Dried Grains with Solubles (DDGS)

DDGS Comments: Prices for DDGS (minimum 35 percent Pro-fat combined) delivered March and April firmed up for all destinations this past week except one (Laredo, Texas). Prices increased an average of USD $2/container but were higher by over USD $3/container for Southeast Asia destinations. The highest prices were $224 to Malaysia, the Philippines and Vietnam for March delivery.

With the Chinese New Year out of the way, customers were ready to buy for March and April positions. New research showing the value of DDGS in aquaculture could stimulate some demand.

Ethanol Comments: The Energy Information Administration (EIA) reported that U.S. weekly ethanol output was up 6,000 barrels per day (bpd) last week to 975,000 bpd. U.S. weekly ethanol stocks were up 262,000 barrels for a total of 23.22 million.

Meanwhile, the margin between the corn price and the value of ethanol and coproducts pushed higher last week in all four tracked markets (see below).

     
  • Illinois differential is $1.36 per bushel, in comparison to $1.29 the prior week and $1.78 a year ago.
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  • Iowa differential is $1.26 per bushel, in comparison to $1.16 the prior week and $1.46 a year ago.
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  • Nebraska differential is $1.48 per bushel, in comparison to $1.39 the prior week and $1.41 a year ago.
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  • South Dakota differential is $1.50 per bushel, in comparison to $1.38 the prior week and $1.67 a year ago.

Country News

Africa: The drought has made transparent the policy problems in Sub-Saharan Africa. Zimbabwe is insisting corn imports must be non-GM, but has a loophole for milled maize. Zambia is refusing more corn exports to Zimbabwe, but black market corn is nonetheless making its way across the border. Malawi banned exports of its subsidized corn, but farmers reacted by cutting production. (WPI)

India: Prices offered (approximately $207/MT landed) on PEC’s latest tender for 240,000 of GMO free corn may be too high to complete the purchase. Imported corn appears to be priced around $10/MT higher than domestic corn now being delivered. (WPI)

Philippines: The government is scrambling to issue new regulations regarding biotech crops after a court sided with environmentalists and imposed a ban effective February 23. The new regulation is expected in time to avoid disruptions in production and imports. (WPI)

South Africa: Yellow corn prices fell for five days, the longest losing streak since August of 2014 but the failure of rains to develop pushed white corn prices higher ($315.71/MT).