Weekly report -- July 07, 2013

 

 

Hammersmith Marketing Ltd  - Grain Trading

WEEKLY FEED GRAIN AND PROTEIN REPORT   July 07, 2013

                                                                       

 

France:  Rep. Office: +33.9.7044.4881   Mobile: +33.6.8068.4564    Fax: +33.4.5774.7575

UK:   Rep. Office    +44.131.208.0308    Mobile: +44.7762.640.270

Email:   tradegroup@hammersmith.biz    WWW:  hammersmithltd.blogspot.com       SKYPE: bacon39a  

 

 

SECTION 1:  FEED GRAINS -- VEGETABLE AND ANIMAL PROTEIN

 

So this week we had the USA closed on Thursday the 4^th of July and many businesses remaining closed or short staffed on the Friday – giving quite few folks a nice four-day holiday.  The trouble with holiday weeks is that grain and protein prices are never all that accurate as many traders want to liquidate open positions prior to the holidays in order to limit risk, which tends to push prices around just prior to the holiday and then, even with the US commodity exchanges open on the Friday, actual trading volume is normally lower and price changes more drastic, as the trade is so thin.  There will be a much better idea of where markets are heading once we get into the early part of next week.

 

Overall with corn last week the new crop prices did tend to fall once again but with the old crop prices moving a little higher as tight supply normally means higher prices and those who need the limited old crop corn supplies are just going to have to pay more of hold off buying until the new crop is available.

 

At present the weather looks good for the corn crop and the corn crop condition report is improving every week --- so late planting seems to be less of a problem than had been expected by some.  Also, as mentioned above, with the holidays the actual cash business done for corn was very low as everyone seemed to have other things to do on a holiday weekend rather than buy and sell corn.

 

Old crop soybeans had a good week last week as both cash and futures prices for the old crop stocks moved higher.  There was not a great deal of actual business done and quite often the market overreacts when sales volume is low, so the end of the week rally may not hold for Monday.

 

As with corn, the weather for the soybean crop is quite good in most of the USA at present and the crop condition report is very positive.  Most of the experts are saying that the old crop prices will remain strong but that there is still quite a lot of room for new crop soybean prices to move lower.  Some say that the next logical place for soybeans to go is to about USD 30 m/t lower.

 

 

 

USA crop condition Report 2013 July 06	Very poor %	Poor %	Fair %	Good %	Excellent %
Corn	2	6	25	51	16
Last year	7	15	30	40	8
Soybeans	2	5	26	55	12
Last year	7	15	33	39	6
Sorghum	6	10	35	43	6
Last year	7	17	42	30	4

 

 

USDA wheat: all types, corn  and sorghum exports – Jan to May 2013 – in m/t

 

Major importing countries.

 

	Wheat – all types	Corn – all grades	Sorghum
Brazil	531,800
Cameroon			8,869
Canada		145,500
Chile	252,100
China	469,700	1,135,100
Columbia	279,300
Cuba		132,500
Djibouti			7,100
Egypt	1,586,300
Italy	290,400		42,800
Jamaica		104,400
Japan	1,636,300	2,396,000	92,000
Kenya			28,800
Mexico	1,076,700	1,665,000	440,600
Nigeria	1,417,300
Peru	274,500
Philippines	807,000
Saudi Arabia		140,400
South Africa			10,000
Spain			35,500
Taiwan	452,800	214,300
Turkey	326,700
Yemen	216,700
Venezuela	226,600	374,100
Total World	12,924,100	5,468,300	668,300

  

 

FOB port or location specified .. prices in US$ .. in metric tones:

All shipments in bulk grain vessels unless stated otherwise

(NOLA is New Orleans, Louisiana, USA.)

 

Wheat, USA Soft Red Winter, NOLA	USD 266/275 Jun/Oct
Wheat, USA Hard Red Winter 12 protein	USD 302/309 Jun/Oct
Wheat, milling Black Sea 11.5 pro – 30,000 m/t	USD 280>>245 July/Sep
Wheat, soft milling, France, Rouen port	USD 253/255
Wheat, milling, Argentina, upriver	USD 260/270 Dec/Jan new crop
Wheat, feed, Black Sea	USD 255>>235 July>>Sep
Wheat bran, Black Sea	USD 210/215
Barley, France, Rouen port	USD 241/245
Barley, feed, Argentina, upriver	USD 225/245 Dec/Jan new crop
Barley, feed, Black Sea	USD 248>>238 July>>Sep new crop
Barley, feed, USA Pacific Northwest	USD 270/275

 

Corn, FOB NOLA USA	USD 302>>223 July>>Oct new crop
Corn, FOB USA Pacific northwest	USD 330>>248 July>>Oct new crop
Corn, FOB Argentina port, upriver	USD  203>>207  July/Aug
Corn, FOB Brazil port	USD  200>>206  July/Aug/Sep
Corn, FOB Black Sea – 30,000 m/t	USD  275>>240 June>>Sep
Corn, FOB France	USD  278/293
Sorghum, FOB Texas, low tannin, GMO free	USD  283>>230 Jul>>Sep new crop
Sorghum, FOB Argentina port, high tannin, GMO free	USD  asked 195/bid 185 July/Sep

 

Soymeal,  48 protein, FOB NOLA	USD  547>>450 July>>Oct new crop
Soymeal, 48 protein, USA, Rotterdam	USD  580>>480 July>>Oct new crop
Soymeal, Argentina, Rotterdam	USD  562>>456 Spot>>J/A/S
Soymeal, 47 pro, FOB Argentina	USD  457>>428  Aug/Sep
Soymeal, 48 protein, Brazil, Rotterdam	USD  538>>469 Spot>>J/A/S
Soymeal, FOB Brazil	USD  445>>432  Aug/Sep
Soymeal, 48 protein, India FOB	USD  no price

 

Bulk vessel shipments, minimum 5000 m/t

 

Corn Gluten Feed,  USA FOB NOLA	USD   215/218 m/t
Corn Gluten Meal,  USA FOB NOLA	USD   690/710 m/t
DDGS, 35 profat, USA FOB NOLA	USD   288>>284 m/t July>>Sep
DDGS, 35 profat, CNF Asian ports	USD   362>>370 m/t July>>Sep

 

 

The market was expecting to see corn by-products prices drop lower this week but with the continuing premium for old crop corn over new crop there has really not been any weakness at all for shipments over the next few weeks.  Of course the situation is different for shipments later in the year when the new crop corn is available but most sellers do not want to go out to
September with export sales as there is still a great deal of risk in the grain markets and one never knows what the weather will do in the next few weeks.

 

There are buyers in the market for later shipments but the producers are not quite ready to accept their below market bids.

 

Looking at the way corn prices go over the next few months then we should see lower prices for all corn by-products once the producers can get some of the lower priced new crop corn supply but until that time most producers will not be all that interested in selling expensive by-products at discounted prices.

 

So, prices should be at least steady, perhaps higher for July to early September.

 

 

USDA corn by-product exports  and soymeal– Jan to May 2013 – in m/t

 

Major importing countries.

 

	Corn gluten Feed	Corn gluten meal	Distillers dried Grains: DDGS	Soybean meal
Canada	12,300	22,600	213,300	351,400
Chile		57,300	5,900
China			950,700
Columbia		18,000	36,700	208,600
Denmark				193,500
Dominican Republic				124,500
Ecuador				127,500
Egypt	8,800	67,600	54,400	223,800
Indonesia	13,300	110,400	104,600	31,000
Ireland	134,400		112,800
Israel	38,400	10,500	39,300
Italy				121,000
Japan		16,800	163,400
Malaysia		27,100	20,700
Mexico		35,300	503,900	224,600
Morocco	20,200		52,700	137,100
Poland				199,500
Portugal	20,500
South Korea			165,700
Spain				61,700
Taiwan		15,200	98,200	15,400
Thailand		14,700	118,300
Turkey	110,200		172,300	227,200
Venezuela				297,600
Vietnam			166,100	126,200
Total World	388,600	443,300	3,207,100	3,663,600

  

 

Container shipments, minimum 200 m/t

 

Paraguay Meat & Bone meal, 45 protein Paraguay Meat & Bone meal 48/50 protein	USD 530/540 m/t CNF Asia USD 560/570 mt CNF Asia
Argentina Meat & Bone meal, 45 protein	USD 550/560 m/t CNF Asia
Europe Meat & Bone meal, 45 protein Europe Meat & Bone meal, 50 protein	USD 530/540 m/t CNF Asia USD 570/580 m/t CNF Asia
Australian MBM 45 protein Australian MBM 50 protein Australian Feathermeal Australian Poultry meal, pet food grade	USD 655/665 mt CNF Asia USD 735/745 m/t CNF Asia USD 680/690 m/t CNF Asia USD 1050/1080 m/t CNF Asia
USA Meat & Bone meal, 50 protein USA Feathermeal, 80 protein USA Poultry Meal, feed grade USA Poultry Meal, pet food grade	USD 730/760 m/t CNF Asia USD 830/850 m/t CNF Asia USD 750/770 m/t CNF Asia USD 1050/1090  m/t CNF Asia

 

 

The following indications are at producer's factory, ex-works in bulk

 

Meat and bone meal, USA, 50 protein	USD  495/520 m/t
Feathermeal  80 protein USA	USD  640/660 m/t
Poultry meal  57 protein, Eastern USA	USD  540/560 m/t

 

Reports out of Asia has Australian and New Zealand export prices taking quite a jump as there has been an increase in demand but nothing much available in supply.  The prices in the table above don't show any major leap higher and that is because it is very difficult to confirm market prices in a fast market.  As with fishmeal the export buyers of animal proteins seem to be only buying for very short-term requirements as the feeling is that prices will fall once we get the drop in soymeal prices that will appears in the very near future.  No one expects animal protein to sell at an above average premium to soymeal – so when soymeal drops then s should animal proteins.

 

USA domestic prices are about steady – perhaps up USD 10 m/t here and there but there does not look to be any definite trend to higher prices in the USA market.  Of course with last week being a short week for the USA, due to the 4^th of July, the end of the week reports may be more guessing than fact.

 

 

USDA animal protein exports – Jan to May 2013 – in m/t

 

Major importing countries.

 

	Meat and bone meal Includes pork and poultry	Feathermeal
China	10,200
Chile		23,700
Canada	17,100	1,900
Indonesia	15,400	49,600
Philippines	15,500
Mexico	13,900
Thailand	7,200
Total World	99,000	78,500

  

 

 

 

SECTION 2 --- FISHMEAL COMMENTS AND PRICES: PERUVIAN

 

Fishmeal prices in Peru and Chile both continued to drop lower this week as the stocks on hand get bigger every week and buyers are not leaping into the market.  According to trade reports most of the current sales have been small lots jut to cove immediate needs and anyone wanting large lots is quite happy to wait a little and see how far down the prices do go.  There is not much sense for buyers to jump in when the market is falling.

 

Depending on whom you talk to or which trade-report you read the estimated stocks of fishmeal available in Peru could be as little as 200,000 m/t or as much as 300,000 m/t but most seem to feel that the higher number is more accurate.

 

There is still about 200,000 m/t of catch left for the northern region quota (running to July 31), which would add another 50,000 m/t of fishmeal to the stocks and there is the 350,000 m/t balance of the southern quota (that now runs to August 31) which would add another 80,000+ tons of fishmeal.

 

So, what the producers are hoping for is some buying interest appearing, one of these days, before the stocks on hand reach mountain size or the price drops to such a level that there is no margin left.

 

It has been reported that some importers in China are selling at as much as USD 50 m/t below the current replacement cost, which is certainly going to create some losses for Chinese importers but it is best to clear your stock, as much as you can, if the prices are expected to continue to move lower. 

 

Looking at the situation this week with growing stocks, falling prices and limited new sales, it would be very difficult to project anything but weaker prices in the short term.

 

 

PERU "INDICATION" FISHMEAL PRICES:

 

ALL PRICES SHOWN ARE IN CONTAINER, ON VESSEL, AT ORIGIN --- US DOLLARS

Minimum shipment of 200 m/t for fishmeal

 

Specification	Price per m/t FOB vessel Peru port
FAQ basis 65 protein	1500/1520 m/t
65/66 pro standard steam	1530/1550 m/t
67 protein standard steam	1550/1570 m/t
67 protein SD 150  TVN	1580/1600 m/t
67 protein SD 120 TVN	1600/1640 m/t
67 protein SD 1000 hist, 120 TVN	1640/1680 m/t
68 protein SD 500 hist, 120 TVN	1680/1700 m/t
Fish oil .. crude bulk	2100/2150
Fish oil – crude drums	2250/2300
Fish oil – flexitank	2200/2250
Fish oil – Omega 3 – 28%EPA/DHA	2800/3000

 

INFORMATION:  gtee = guarantee, TVN = total volatile nitrogen, hist = histamine,

FAQ = fair average quality (normally flame or hot air dried), SD = steam dried

           

Wayne Bacon

 

The information contained herein is based on sources that we believe to be reliable, but we do not represent that it is accurate or complete.  Nothing contained herein should be considered as an offer to sell or a solicitation of an offer to buy.  All references to prices are subject to change without notice.  Any opinions expressed herein are solely those of the author.  As such, they may differ in material respects from those of, or expressed or published by or on behalf of, Hammersmith Marketing Ltd or its officers, directors, employees or affiliates

 

Copyright © 2013 Wayne S. Bacon