Corn Prices Volatile, DDG Buyers Hesitant

Buyers of dried distillers grains have been somewhat hesitant lately, following volatile corn prices last week, merchandisers told DTN last week.

Earlier in the week, buyers seemed to be waiting to see how the situation in Japan plays out, as the disasters resulted in many unknowns. Since DDG prices typically mirror the corn board, some buyers seemed to be waiting for the markets to settle down.

Volatility in the corn board last week illustrated that fear, as corn prices spiked towards the end of the week, rising more than 20 cents on Thursday, then dropped back down 13 cents on Friday.

DTN Market Analyst John Sanow said the spike and fall was a classic "buy the rumor, sell the fact" situation on Thursday with the rumor that a 1.25 million metric ton export sale to unknown destinations was to China.

"We rallied from the low of $6.08 on March 16 to the high Friday of $7.17 1/4 on the possible Chinese purchase," Sanow said.

Michael Peterson, senior merchandiser for U.S. Commodities in Minneapolis, told DTN last week that since the price dip in recent weeks, DDG buyers have been buying in a "hand-to-mouth" method.

Other factors in the DDG market recently have been supplies are tight in many markets, some logistical issues with railroads and some localized flooding.

In coming weeks, Peterson said he looks for DDG prices to remain somewhat stable.

(Source: http://www.dtnprogressivefarmer.com/dtnag/view/blog/getBlog.do;jsessionid=8E77D32174659E2160294EEE19704E05.agfreejvm1?blogHandle=ethanol&blogEntryId=8a82c0bc2eaec4d4012efd215680037a)