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DDGS Contract Futures Launched

The CME Group

launched its distillers dried grain with solubles (DDGs) futures contract April 25. The contract will trade only on the electronic Globex platform. It aims to provide corn-based ethanol makers hedge protection by creating a true “corn crush” in combination with corn, ethanol and natural gas futures.

A third of corn used in ethanol production comes out as distillers grain, as the fuel distillation process strips the starch out of the corn, leaving a protein-rich animal feed.

U. S. Fed Cattle At Six-Year Low

The number of cattle at U. S. feedlots were at a six-year low in March due to active sales fuelled by high prices, which is expected to give Chicago Mercantile Exchange live cattle futures a boost.

The U. S. Department of Agriculture said in its monthly Cattle on Feed report April 23 that on-feed cattle supply as of April 1 was 10.769 million head – 96 per cent of last year and the lowest level for the month since 2004.

USDA said the number of cattle sent to market during March was 1.902 million head, or 104 per cent of last year.

Cattle prices reached their highest level in two years recently and that prompted feedlots to market their cattle aggressively, even when the cattle were at lower-than-anticipated weights.

This should have prompted feedlots to place more cattle as profits improved, but only a few feedlots placed more cattle than a year ago.

Traders said the lower-than-expected number of cattle heading to feedlots was because some feedlot operators were still haunted by the negative margins of last year and were waiting for prices to go even higher.



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