Spring brings hope of discounted prices
April 1, 2006
BY Sean Broderick, Commodity Specialists Company (CSC
March 1—With the beginning of March, we find DDGS still in good demand and product still in short supply. The export market for barges and containers is still extremely strong, with buyers forced to schedule further ahead to ensure adequate supply. Generally, this time of year brings hope of warmer weather and buyers looking to buy a steeply discounted summer price. The dry weather in the Southwest has caused buyers to think a little differently about the potential summer crop issues, and the carry in the corn market is giving users incentive to get more coverage than they would ordinarily have.
In Europe, bird flu has everyone talking about significant decreases in feed demand. Poultry consumption there is already down severely, and cross-border containment issues have a lot of feeders feeling queasy. In the eastern United States, poultry and hog demand is down as fat prices are very low, which combined with low natural gas prices forces it into the feed markets.
Going forward, a lot will depend on the futures markets and the spring gyrations they usually present. Continued overseas education will keep new users coming, and increasing supply of DDGS will allow Southeastern hog and poultry markets to comfortably put it in rations without fear of being undersupplied.
In Europe, bird flu has everyone talking about significant decreases in feed demand. Poultry consumption there is already down severely, and cross-border containment issues have a lot of feeders feeling queasy. In the eastern United States, poultry and hog demand is down as fat prices are very low, which combined with low natural gas prices forces it into the feed markets.
Going forward, a lot will depend on the futures markets and the spring gyrations they usually present. Continued overseas education will keep new users coming, and increasing supply of DDGS will allow Southeastern hog and poultry markets to comfortably put it in rations without fear of being undersupplied.
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