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DDGS on sale, but buyers wary

Prices for DDGS — dried distillers grains (with solubles) — have come down significantly over the past few weeks, but are still too high when compared to other feed options.

“Prices are dropping, but they haven’t dropped significantly enough to attract Canadian buyers,” said Ryan Slozka, senior commodity trader with Rycom Trading, a major importer of DDGS from the U.S. ethanol industry.

DDGS delivered into Lethbridge is currently priced at about $325 per tonne, he said. That’s a $20 drop from a few weeks ago, but still above barley at $280 per tonne.

Although DDGS typically commands a 20 per cent premium over barley, livestock feeders are currently sitting on full bins of barley purchased at $260 per tonne. As a result, Slozka predicted feeders would let their barley supplies draw down before pulling in more DDGS.

“If you think barley will go up in January/February/March, you should buy your DDGS now,” said Slozka.

However, most end-users are still buying on a hand-to-mouth basis and are reluctant to do much forward pricing. While the ethanol plants are desperate to make some nearby sales now, they are also not interested in booking losses into the future. With both the buyers and sellers reluctant to make a move in the current market, time will tell how much DDGS make their way into Canada this year.

“I’m optimistic that there will be DDGS coming back into Canada at some time,” said Slozka, adding that livestock feeders will need to pick their opportunities going forward.

Manitoba livestock feeders have been strong buyers of American DDGS in the past, but an abundant corn crop is proving a better alternative this year, he said.

Norstar Industries purchases V-Bins (Vidir Bins)

Staff / Norstar Industries, a manufacturer of grain-handling products, has purchased V-Bins (Vidir Bins) in Morris, Man. Production will continue in the current plant, with shipping capabilities to service Western Canada, and the northern U.S. states.

The purchase adds grain storage to Norstar’s grain-handling product line. “There is a natural synergy with smooth-wall hopper bottom bins, bucket elevators and cross augers,” said Ray Waldner, Norstar president and general manager.

Norstar Industries also produces and markets commercial grain bin sweeps, and surface drainage systems globally.

About the author

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Phil Franz-Warkentin writes for MarketsFarm specializing in grain and commodity market reporting.

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