Distillers Dried Grains with Solubles (DDGS)
DDGS Comments: DDGS prices were down on average $4/container but that was largely due to declines in the U.S. market. There was no change over this past week for prices reported on shipments to Southeast Asia, and prices were unchanged for containers going to Shanghai.
The April edition of the Grain Crushing and Coproducts report from USDA’s National Agricultural Statistics Service (NASS) indicates that U.S. production of DDGS in February was 1.8 million tons, down from January but up by 11 percent from February of 2015. U.S. exports of DDGS in February were down at 785,383 MT, with China remaining the top market and taking over a quarter of all sales.
Separately, February production of both corn gluten feed (312,012 tons) and corn gluten meal (83,643 tons) were down from January levels but up from February of a year ago.
Ethanol Comments: The April edition of the Grain Crushing and Coproducts report from USDA’s National Agricultural Statistics Service (NASS) indicates that corn use in February for alcohol was 470.2 million bushels, up 7 percent from a year ago, and corn used for fuel alcohol was at 420.8 million bushels. Exports of U.S. ethanol in February were 67 million gallons, down 23 percent from January. Year to date, U.S. ethanol exports are up a smidgen from a year ago to 154.1 million gallons. Alcohol is competitive with gasoline in Brazil and that nation increased its imports in February of U.S. alcohol with 9.5 million gallons of denatured and 12.5 million gallons of un-denatured.
U.S. ethanol production this past week was 976,000 barrels per day, down 16,000 barrels per day from a week ago. Stocks as of April 1 were at 22.2 million barrels, down 800,000 from a week earlier.
The margin between the corn price and the value of ethanol and coproducts was up this past week in three out of four market basket states. (See below.)
- Illinois differential is $1.34 per bushel, in comparison to $1.17 the prior week and $2.20 a year ago.
- Iowa differential is $1.30 per bushel, in comparison to $1.17 the prior week and $1.88 a year ago.
- Nebraska differential is $1.50 per bushel, in comparison to $1.59 the prior week and $1.68 a year ago.
- South Dakota differential is $1.53 per bushel, in comparison to $1.40 the prior week and $1.98 a year ago
Country News
Argentina: The April estimate for the 2015/16 corn crop is 27.5 MMT, up 500,000 MT from the March estimate. (Informa)
Brazil: The government forecasted the corn crop at 84.66 MMT versus a March estimate of 83.52 MMT. Yield is marked at 5.47 tons per hectare, versus 5.4 tons per hectare last year. (Thompson Reuters)
China: It is speculated that China’s new corn policy will prompt farmers to instead grow more soybeans, though the extent of this substitution is unclear. (Various)
Japan: Japan bought 145,544 tons of old crop corn, providing a boost to the U.S. market.