DDGS price drops as percentage of corn

May 15, 2013

BY Sean Broderick

April 29—As May begins, the DDGS market is paying close attention to planting delays and the impact on corn availability for the rest of the summer, until harvest. The rapid futures price drops, as seen after last month’s report, enabled ethanol plants to lock in margins through May, and ensured sufficient DDGS supplies through the month. Since then, announcements of restarting idled ethanol plants pushed the DDGS-as-a-percentage of corn number from 99 percent down into the low 90s, as buyers assumed more production coming.

Demand, which traditionally starts to drop off with the warmer spring weather, has been steady, but prices have dropped since the end of March. Wet/modified distillers grains demand has started to drop off and plants that shipped their product locally for the winter are now loading cars and pressuring the destination markets. Export container demand from the Chicago area, which is usually the premium market, has seen product being shipped into it from as far away as western Iowa. Barge shipments, which were dicey because of low water in March, were being shelved because of high water. That tonnage is needed in other destinations, namely trucks into Chicago. 

Advertisement

Advertisement

Looking ahead, plant margins are going to be affected by the availability of old crop corn, which will influence their production, and the DDGS supply. As of late April, it was still profitable to make ethanol and the resulting DDGS supply is expected to depress the percentage of corn calculation. A spike in corn prices will reverse that process.

Advertisement

Advertisement

Related Stories

The European Commission on July 18 announced its investigation into biodiesel imports from China is now complete and did not confirm the existence of fraud. The commission will take action, however, to address some systemic weaknesses it identified.

Read More

The U.S. exported 31,160.5 metric tons of biodiesel and biodiesel blends of B30 and greater in May, according to data released by the USDA Foreign Agricultural Service on July 3. Biodiesel imports were 2,226.2 metric tons for the month.

Read More

CARB on June 27 announced amendments to the state’s LCFS regulations will take effect beginning on July 1. The amended regulations were approved by the agency in November 2024, but implementation was delayed due to regulatory clarity issues.

Read More

Legislation introduced in the California Senate on June 23 aims to cap the price of Low Carbon Fuel Standard credits as part of a larger effort to overhaul the state’s fuel regulations and mitigate rising gas prices.

Read More

The government of Brazil on June 25 announced it will increase the mandatory blend of ethanol in gasoline from 27% to 30% and the mandatory blend of biodiesel in diesel from 14% to 15%, effective Aug. 1.

Read More

Upcoming Events

Sign up for our e-newsletter!

Advertisement

Advertisement