May 19—Exports are making up the bulk of activity on the DDGS market prior to the Memorial Day holiday. Demand for both Midwest containers and bulk product out of the Gulf has been unsurpassed, with regard to both price appreciation and volume. Asian customers that had been taking product in containers have shifted some of their demand into bulk shipments, creating some great shipping opportunities for U.S. plants. Trucks are being profitably shipped to the Mississippi River from as far away as South Dakota to feed the export market. Typical destinations for western Corn Belt DDGS—California, the Southwest, and the Pacific Northwest—are being forced into placing higher bids just to ensure an adequate supply.
Increased demand for distillers grains can be attributed to a dramatic escalation of soymeal prices. Feeders are able to replace soy with inexpensive synthetic lysine with distillers grains, which results in significant cost savings, especially for hog feeders. Futures markets predict that soy prices will stay strong. Feed demand should decline a bit due to hotter weather, but there will continue to be feeders looking to cheapen their rations.
Increased shipping rates may temper the export bulk demand in the near future and barge freight has been rallying as well. The question of when "hot idled" and impending start-up ethanol plants will begin producing will also hang over the market, but all eyes will stay on the soy complex.
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