Email: tradegroup@hammersmith.biz WWW: hammersmithltd.blogspot.com SKYPE: bacon39a
Sorry but I am a day or two late with my report this week – I was travelling much of last week so fell a little behind on my reports.
SECTION 1: FEED GRAINS -- VEGETABLE AND ANIMAL PROTEIN
You could probably say that this past week has been a reasonably quiet week – at least when compared to a few weeks in the recent past. I guess that everyone was just catching their breath and trying to digest all the market news.
USA corn prices were off a little for the week as South American weather looked good for all crops and then ethanol production looked to be slipping a little and you add to this some not very spectacular export numbers and it all leads to lower corn prices, at least for now. There was a also a drop in the cattle on feed levels and the new placements levels – at least a drop against what the trade expected, so this could also lead a little toward lower corn demand.
Reading a number of trade reports this weekend it seems that most feel that the corn prices will trend higher over the next few weeks and that the current price level could attract more demand and that perhaps we will see an increase in ethanol production due to better processing margins that come with lower cost corn.
Soybeans and soymeal were up a little on the week and finished the week on a bit of a weak close as higher prices during the day just could not be maintained to the end. As is usual this time of year, everyone is watching the situation in Brazil and Argentina and the experts are falling over each other trying to come up with the best forecast for crop condition. It is said that the early part of February will be very important for crop development in Argentina so we are all watching the weather very closely.
The USA export sales report on Friday was lower that the trade had expected, at least in old crop soybeans, but new crop sales were very good as China is lining up their business for later in the year.
According to most experts, there seems to be little reason for soybean prices to move lower as when they do drop a little there is a rush of buying interest that stops prices from moving lower. We all know where prices will be in the spring when Brazil and Argentina are shipping and this is reflected in trading prices ---- it looks like the only major worry at present is the risk of bad weather in South America and the possible price rally that that could cause.
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 313>>308 |
| Wheat, USA Hard Red Winter 12 protein | USD 350/353 |
| Wheat, milling Black Sea 11.5 pro | USD 352/358 |
| Wheat, soft milling, France, Rouen port | USD 341/344 |
| Wheat, milling, Argentina, Necochea port | USD 345/360 Feb/Mar |
| Wheat, feed, Black Sea | USD 305/310 |
| Barley, France, Rouen port | USD 310/312 |
| Barley, feed, Argentina, Necochea port | USD 295/305 Mar/June |
| Barley, feed, Black Sea | USD 317/325 |
| Barley, feed, USA Pacific Northwest | USD 320/325 |
| Corn, FOB NOLA USA | USD 306/308 Feb/Apr |
| Corn, FOB Argentina ----- spot price | USD 297/299 Feb/Mar |
| Corn, FOB Argentina port, upriver | USD 285>>272 Apr/Jun |
| Corn, FOB Brazil port ----- spot price | USD 295/297 Feb/Mar |
| Corn, FOB Brazil port | USD 290>>246 July/Aug |
| Corn, FOB Black Sea | USD 305/310 |
| Corn, FOB France | USD 324/326 |
| Sorghum, Black Sea | USD n/a |
| Sorghum, FOB Texas, low tannin, GMO free | USD 313/316 |
| Sorghum, FOB Argentina port, high tannin, GMO free | USD asked 250/bid 235 Mar/May |
| Soymeal, 48 protein, FOB NOLA | USD 515/520 January |
| Soymeal, 48 protein, USA, Rotterdam | USD 536>>482 F/M/A/M |
| Soymeal, Argentina, Rotterdam | USD 523>>448 F/M/A/M |
| Soymeal, 47 pro, FOB Argentina | USD 490>>418 F/M/J/J |
| Soymeal, 48 protein, Brazil, Rotterdam | USD 525>>455 Feb/Apr/May |
| Soymeal, FOB Brazil | USD 493>>425 Feb/M/J/J |
| Soymeal, 48 protein, India FOB | USD 530/535 |
Bulk vessel shipments, minimum 5000 m/t
| Corn Gluten Feed, USA FOB NOLA | USD 272/275 m/t |
| Corn Gluten Meal, USA FOB NOLA | USD 750/770 m/t |
| DDGS, 35 profat, USA FOB NOLA | USD 350>>345 m/t |
| DDGS, 35 profat, CNF Asian ports | USD 384/390 m/t |
DDGS prices continue to move higher as supply is tight due to lower ethanol production and buying interest remains quite good – both domestic and export. Demand from Vietnam seems strong at present but buyer's price ideas are quite a bit below the current US market level. There is also good interest from China but due to current registration requirements for USA producers in China there is some question on how quickly shipments will be able to be made.
Two more things on DDGS – it is now fully approved as a non-hazardous cargo which makes export shipments much easier and perhaps a little less expensive and also that there looks to be a container freight rate increase coming which will push up the CNF prices.
Corn gluten meal prices continue to slide lower --- traders in the USA have said that increased production of CGM is currently creating a surplus in supply – one that probably wont last for too long as sharp-eyed buyers will scoop up the excess supply at what looks like a bargain price – certainly a bargain compared to prices only a few weeks ago.
Corn gluten feed export prices are just treading water – not going up or down – guess prices are just waiting for the next move in corn prices in order to decide which way to go.
Sorry but I have not included the international prices on animal proteins this week as I seem to have lost touch with a couple of my sources for international CNF prices – hopefully I will be able to have updated prices again next week.
According to trade reports the prices for anima proteins in Asia have dropped by about USD 25 m/t in the past week as export supplies from Australia are picking up and sellers have moved prices a little lower in trying to get some business booked before the Chinese New Year. However, export prices from the USA for feathermeal and poultry meal have moved higher and even meat and bone meal has moved up a little. MBM still looks like reasonable bargain against soymeal in the domestic markets in the USA and any increased demand in the USA will tend to push export prices higher.
There is a note in the fishmeal section below on the EU's new regulations on animal protein use in fish feed.
The following indications are at producer's factory, ex-works in bulk
| Meat and bone meal, USA, 50 protein | USD 385/410 m/t |
| Feathermeal 80 protein USA | USD 650/680 m/t |
| Poultry meal 57 protein, Eastern USA | USD 540/600 m/t |
SECTION 2 --- FISHMEAL COMMENTS AND PRICES: PERUVIAN
Fishing in Peru has slacked off quite a bit with the daily catch levels down to 8 or 9,000 m/t per day and only about one hundred or so vessels still out fishing – of course with new mini-bans in many areas it is tough to reach higher catch levels. The question now is whether the quota will be reached this month. There was about 100,000 m/t left on the quota on the 24th and at 9,000 m/t per day this will take ten days to land – but there are not ten fishing days left in January, so we may come up short on January just as we did on December.
There has not been a great deal of new business booked in the last few days as China gets ready to close down for the New Year holidays and other major destinations are finding lower cost supplies in other areas.
According to trade reports out of Peru there is now available stock of about 40,000 m/t of various grades of fishmeal on hand but when you look at how long a period this stock must cover before the next fishing season then there is really not very much available.
Interestingly there seems to be some weakness in fishmeal prices in Peru with most grades of fishmeal dropping lower on the week – some more expensive grades by USD 50 m/t or so. Perhaps the drop in prices will get buyer a little more active or perhaps things will just stay quiet until China is back in the market again.
No matter what, there is not going to be a huge stock of Peruvian fishmeal available and I suspect that buyers will once again be fighting over the remaining stock in coming weeks. It could be that the weakness in prices this week is a buying opportunity.
I should mention that the EU has revised regulations on the use of animal protein in fish feed formulations – non-ruminant EU produced animal protein will be allowed to be used and this should reduce the imports of fishmeal and reduce the exports of some animal protein items from the EU. EU feathermeal and poultry meal have been in demand in Asia and other areas due to the high quality and very competitive prices but with increase EU consumption it is expected that export supplies will shrink while prices will increase.
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 | 1800/1810 m/t |
| 65/66 pro standard steam | 1840/1850 m/t |
| 67 protein standard steam | 1840/1850 m/t |
| 67 protein SD 150 TVN | 1900/1920 m/t |
| 67 protein SD 120 TVN | 1950/1970 m/t |
| 67 protein SD 1000 hist, 120 TVN | 2000/2020 m/t |
| 68 protein SD 500 hist, 120 TVN | 2050/2070 m/t |
| | |
| Fish oil .. crude bulk | 2500/2550 |
| Fish oil – crude drums | 2700/2750 |
| Fish oil – flexitank | 2650/2700 |
| Fish oil – Omega 3 – 28%EPA/DHA | 3000/3500 |
| | |
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
