Distillers grain prices continue to fall

Despite the rash of wet weather in the corn belt this year, the overall value of the dried distillers grain has softened during the last two months, due to expectations of yet another bumper crop of corn going into the field.

“This has pushed average distillers grain prices from $115 per ton, in early spring, to levels between $95 and $100 per ton through most of the Midwest states. Dried distillers grain contracts started out April 23 at $105 per ton, but quickly slipped back to prices hovering around $100 per ton. This consistency remained in the market until the second week of June, when additional pressure was seen in the corn market. This drove the price to $92 per ton,” according to Rick Kment, DTN ethanol and diary analyst.

He went on to note that “contract acceptance by any of the peers in either the feed or ethanol industry has been disappointing: The current open interest in the market is 11 contracts. The challenge with the small open interest is for someone who has a contract to actually find others willing to offset their position. This is why very little trade has been seen in this newly developed futures market. Outside of front month July contracts, there is zero open interest, making it impossible to actually hedge future prices in at this point, given the lack of offsetting buyers or sellers.”