Dry Conditions in Southern Europe Lift DDGS Exports, Boost Domestic Prices
September 1, 2003
BY Sean Broderick, Commodity Specialists Company (CSC
Just before Labor Day weekend, DDGS prices had been firming up for at least two weeks. Prices in Minnesota were $80 for September, with a $5 premium for October-December. Export demand, which is very strong due to extremely dry conditions in southern Europe, has been a main factor in driving up domestic DDGS prices. Rising costs of corn and soymeal are another factor, along with high whole cottonseed and canola meal values. Demand from hogs and poultry remains strong, and increased cattle numbers are beginning to pull more feed.
Going forward, the focus will remain on European demand, natural gas costs, and EPA inspections of plant emissions. Export demand from Europe, Mexico and Latin America will continue to keep the DDGS market tight throughout the winter. Natural gas costs appear as though they will remain above the $5/decatherm level, inducing plants to run wet grains as much as possible. EPA inspections will also be a focus for the plants, as they must comply with mandated emission levels, and may also be a factor in necessitating more wet product, thereby decreasing dry feed. EP
Going forward, the focus will remain on European demand, natural gas costs, and EPA inspections of plant emissions. Export demand from Europe, Mexico and Latin America will continue to keep the DDGS market tight throughout the winter. Natural gas costs appear as though they will remain above the $5/decatherm level, inducing plants to run wet grains as much as possible. EPA inspections will also be a focus for the plants, as they must comply with mandated emission levels, and may also be a factor in necessitating more wet product, thereby decreasing dry feed. EP
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