DDGS Comments: DDGS shipments in February to China were down 3.83 percent from January and the price is sliding along with volume. Meanwhile, U.S. hay exports to China hit a record in February (83,844 MT) and prices are rising. Traders report ample interest in DDGS in other Asian markets based on lower prices. Moreover, since DDGS pricing is a result of many factors including ethanol grind, corn prices and demand, some expect a correction back upwards. This is reinforced by increased demand in both the U.S. and Mexico as hog rations have shifted to maximum DDGS inclusion rates. 

This week’s market survey of DDGS prices in 16 markets reinforces the aforementioned qualitative input from the trade. Indeed, the average of all markets shows a slight rise in prices, mostly due to larger increases in Lethbridge, Alberta; Laredo, Texas; and the Pacific Northwest offsetting smaller declines in Asian markets. The rally this week in the corn market no doubt has had some impact. The dynamics moving forward create uncertainty, particularly weather in South America. 

Ethanol Comments : The Energy Information Administration (EIA) raised the estimated stocks of ethanol by 100,000 barrels to 22.3 million. The agency calculated a 38,000 barrel-per-day reduction in ethanol production down to 938,000 barrels-per-day.

The margin between the corn price and the value of ethanol and coproducts took a significant jump upwards in all four market basket states. (see below).