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29 Apr 2016
Sources:
Grains Council
Distillers Dried Grains with Solubles (DDGS)
DDGS Comments: The bullish tone in the futures market continues to give DDGS prices a firm foundation. The average change for DDGS containers in all surveyed locations rose an additional $2, but the increase was much larger for June shipment over May deliveries. It is believed that some buyers are holding off, hoping that the market will turn down. Price reporting indicates they will have to wait a while, and in trading, hope is not a strategy.
Meanwhile, USDA Chief Economist Robert Johansson told Reuters that the agency expects demand for feed from China’s livestock sector to remain strong and that could help drive up U.S. sales of corn substitutes such as sorghum, barley and DDGS. He said, “We hope we can continue to sell products to feed sectors in China as long as our prices are competitive in the market.”
Ethanol Comments: The Energy Information Administration (EIA) reduced the estimated stocks of ethanol to 21.6 million barrels (-1.9 percent) as production fell by 12,000 barrels per day to 927,000 barrels per day (-1.3 percent).
The margin between the corn price and the value of ethanol and coproducts took a break this past week from its previous upward trajectory in key markets (see below).
- Illinois differential is $1.55 per bushel, in comparison to $1.65 the prior week and $2.40 a year ago.
- Iowa differential is $1.58 per bushel, in comparison to $1.68 the prior week and $2.11 a year ago.
- Nebraska differential is $1.82 per bushel, in comparison to $1.85 the prior week and $1.95 a year ago.
- South Dakota differential is $1.79 per bushel, in comparison to $1.94 the prior Country News
Country News
Brazil: Bunge’s CEO says that dryness in Brazil will shave 5 to 10 MMT off of the current corn crop. USDA has forecast an 84 MMT corn crop in Brazil. (Reuters)
China: The government is expected to soon announce its new corn policy but the average corn price rose last week by $10 to $284.98/MT. The Ministry of Agriculture has said that China will export 1.7 MMT of corn in 2016 and 2.3 MMT next year, but some believe that 5 MMT is a plausible amount. Surplus corn stocks hit 200 MMT in April and USDA’s Fred Gale says they will continue to grow until peaking in 2017/18. (Reuters, China Daily, WPI)
South Africa: The Crop Estimates Committee lowered its forecast for maize production to 7.05 MMT from last month’s 7.07 MMT estimate, but the trade believes that 7.0 MMT is a more realistic number and that up to 3.8 MMT of maize will need to be imported. (Bloomberg)
Zambia: Millers are asking for government permission to export maize bran, which is in surplus supply and could be used by neighboring countries.
Type Report:
Weekly
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