March 26—As April began, the price of corn slipped about 20 cents per bushel, following a brief uptick. DDGS prices, which began slipping in January, started to firm as plants took seasonal down time. With margins eroding, some ethanol plants may extend that down time which should limit supply through the first half of May. After that, prices will be affected by summer supplies and feed demand.

The spring demand picture has been interesting. The price of hogs would normally lend support to DDGS, as more is fed each year. But vomitoxin concerns have resulted in cautious hog feeding. Cattle feeders, whose margins are not as strong, have incorporated DDGS to the greatest extent possible—there is a lot of cheap wet product across the plains. Dairymen have also been buying a lot of product—but only in the spot markets, since their margins are the worst among feeders. Looking ahead, bids are discounted in the deferreds, as feeders anticipate lower corn and feed prices.

Offsetting the downward pressure is the huge amount of Asian business—both in the ever-increasing container market, and especially the newly increasing Korean and Chinese bulk vessel markets. Several 35,000 metric ton boats have moved off the West Coast this spring, with several to go. The year over year increase on these shipments has been staggering.
Down the road, all eyes are on the planting reports, and ethanol margins. EP