Prices of corn and dried distillers grains both took a gigantic tumble in the past week, due largely to last week's USDA quarterly stocks report.
The report, released last Thursday, estimated approximately 370 million more bushels of corn than originally forecast. The report caused corn to tumble limit down 40 cents, and soon brought DDG prices down with it, as DDG prices tend to mirror movement on the corn board.
Just hours after the report was published, the DTN weekly spot price average had already fallen $3 per ton, from $264 to $261 per ton.
Merchandisers told DTN last week that even with prices falling, the week was fairly quiet as everyone was waiting for the three-day Easter weekend to pass for the market to adjust.
The market became better defined after Easter, as prices began to plummet. After hovering between $261 and $267 per ton for the past seven weeks, the DTN spot price average plunged another $15 per ton on Friday, from $261 to $246 per ton. Although the average was a $13 drop in price, companies reporting spot prices to DTN had price decreases between $8 and $25 per ton.
The last time the average was at $248 or below was during the last week of June 2012 when the average was at $230 per ton. Incidentally, that week was the start of the record-breaking price climb that led to the DTN spot price average all-time high of $299 in early August.
Merchandisers reported that this week was a busy week with some end-users wanting to buy DDG while prices are low and some plants wanting to sell off some inventory.
Kent Hansen, merchandiser for Heartland-Frontier Trading Company in Wichita, Kan., predicted that the downward trend in DDG prices could continue...
Source: Argentine Beef Packers S.A.
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