Reuters logo
U.S. distillers' grains prices tumble on China cancellation talk
June 12, 2015 / 4:22 PM / 3 years ago

U.S. distillers' grains prices tumble on China cancellation talk

CHICAGO, June 12 (Reuters) - Prices for U.S. distillers’ dried grains with solubles (DDGS) fell more than $15 per short ton this week on chatter that top importer China was cancelling cargoes or pushing back deliveries until autumn, export sources said on Friday.

China cancelled two bulk vessels of U.S. DDGS and could cancel as many as six more cargoes, two sources said. The vessels can hold as much as 55,000 tonnes of DDGS, a protein-rich animal feed that is a byproduct of corn-based ethanol.

Another source said the country was only “rolling over” deliveries until October or later, a relatively common occurrence in grain export markets when buyers seek to take advantage of lower prices during the autumn harvest when supplies are most plentiful.

In the U.S. barge export market, bids for DDGS were seen at $170 per ton for June and July shipments, down from $187 on Monday and $200 at the beginning of the month, they said. In eastern Iowa, DDGS were trading at $160 per ton, the lowest levels of the year, according to U.S. Department of Agriculture data.

Many U.S. exporters had long since sold most of their supplies of DDGS for June shipment. The price declines “tell me that supplies are being put back into the market,” an exporter said.

Weakening animal feed demand in China, coupled with cheaper prices for the competing feed of soymeal, led some Chinese buyers of DDGS to seek a way out of their trades.

China a year ago stopped issuing import permits for DDGS amid large domestic corn stockpiles and concerns that they contained then-unapproved genetically modified corn variety Agrisure Viptera, developed by Syngenta AG and known as MIR 162.

China approved the GMO corn trait late in 2014 and resumed buying of DDGS, with U.S. exports there reaching a near-record of 601,834 tonnes in April.

Reporting by Michael Hirtzer; Editing by Andrew Hay

Our Standards:The Thomson Reuters Trust Principles.
0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below