Oct. 4—Distillers grains follow corn—markets are slow to go up, and slow to go back down. September was no exception, as prices hit yearly highs followed by corn futures falling hard the week of Oct. 4. Compared to recent years, DDGS prices have held up pretty well as a percentage of corn. Barge markets hit a high of $180 in the Gulf, and have now dropped to the low $160s. California has seen a similar rise and fall.

Asian buyers continue to focus on containers, as tight Gulf elevations and vessel freight is pricing out bulk deliveries. Bulk delivered prices are currently about a $25 per metric ton premium to containers. Corn and soybean exporters are competing for the empty containers as they suffer the same Gulf elevation issues. A positive note is that the International Maritime Organization, which influences the vessel insurers, is expected to recharacterize DDGS as nonhazardous, which should reduce bulk rates.

Domestic demand is steady. Cattle are still out in green pastures, but there will eventually be seasonally increased wetcake production, which will limit the dry, and keep prices from dropping too much. Hog feeding has resumed higher inclusion rates as new crop DDGS contains little vomitoxin, if any—a welcome change from last year.

Given the volatility, the corn futures market will determine market direction, but DDGS is a good enough value that exports should rebound this winter.