Nearby markets are tight, and the deferred months are being quoted at a discount. Most users in the U.S. have DDGS in the rations to the maximums and we are beginning to see that in overseas markets as well.

Domestically, the futures run up that occurred in the middle of May gave buyers some pause, putting a hold on their buying.  Now, with the pipelines running thin, they are collectively coming to the market for their next week’s needs and pushing the market up on themselves.   Nearby values are a premium, a dynamic that has been that way for quite a while.

In the export markets buyers are even more in denial about prices moving higher than domestic folks and are scrambling to find alternatives-in a market where few exist.  In China, there is talk about a release of some of the corn they have in reserve-at market prices-but that has yet to be seen.  With the price of soymeal, demand is coming in from most of the Pacific Rim.  They feed many more monogastric animals (hogs/poultry) that are in need of protein, and DDGS is a viable alternative.

Overall, it feels like the market will stay elevated.   Higher DDGS prices are increasing ethanol plant margins, and would expect to see full production.  Higher soymeal prices will remain the driver for a while, but Chinese buying decisions and crop conditions will soon start to be what buyers are watching.

              July 2016                         June 2016            July .2015

MN            135                                   120                      160

Chicago     168                                   140                      185

Buffalo     160                                     140                      175

CA            200                                    179                      214

Florida      170                                    155                       204