With Labor Day approaching, DDGS prices have dropped back down to early July values, at best, after having rebounded a bit at the end of July and early August.  Chinese Gulf demand, which was evident in the huge June and July export numbers (and which shipped to the river in May and June) has begun drop. The contracts what were made in the first and early second quarters are near completion, and the only early fall business that has left to execute is tonnage that was rolled ahead from the summer to the third quarter, when prices dropped in July.  Container demand and sales have been steady, but this year has been a much smaller percentage of what moved to China in comparison to bulk.

Domestically, the lower prices have begun to incent more demand in the Midwest, with more expected as the summer heat dissipates, especially from the hog and poultry sectors.  A lot of the poultry business in the Southeast gets done via rail, and buyers are cautious about buying too much rail in the heat of the summer due to unload challenges, but are taking a hard look at it for October forward.  Cattle demand tends to kick in more toward the late fall, and dairy is not profitable enough to do anything more than continue with hand to mouth buying-so it will be a while before US demand can influence prices higher.  Values are still running pretty close to 100 to 110 percent the value of local corn, and soymeal is getting more expensive, so we should start using more domestically.

Looking ahead, harvest yields will influence international demand, but the question of the degree with which China re-enters the DDGS arena, with good crops of their own, remains the biggest unknown.