Hammersmith Marketing Ltd - Grain Trading
WEEKLY FEED GRAIN AND PROTEIN REPORT February 02, 2013
(a Bahamas Corporation)
France: Rep. Office: 33.9.7044.4881 Mobile: 33.6.8068.4564 Fax: 33.4.5774.7575
13-220 Quartier La Galine, St Remy de Provence, 13210 France
Head Office: Trident Services, Kings Court, Bay Street, PO Box N-3944, Nassau, Bahamas.
Email: tradegroup@hammersmith.biz WWW: hammersmithltd.blogspot.com SKYPE: bacon39a
SECTION 1: FEED GRAINS -- VEGETABLE AND ANIMAL PROTEIN
Except for milling wheat prices, this was an up week for grains and oilseeds. Corn prices were up USD 5 to 7 m/t while soybean were up USD 10 to 12 m/t and soymeal up by close to USD 12 m/t.
The rally in corn prices was mainly due to what experts see as a deteriorating situation for the weather in South America and the effect that this could have on corn yields in Argentina and Brazil. Also, as some experts pointed out, the rally hit some chart points that kicked of computer buying and caused the market to rally a little higher or if not rally higher at least kept it from falling.
If you listen to what is being said about 2013 and USA corn then you would be looking for lower prices long term as everyone seem to be expecting better yields and another record corn crop – but that is months and months away and USA corn is not even planted --- but all these thoughts and expectations do have a major effect on futures price for the last half of 2013.
USA ethanol production is down on last month and about 10 percent down on 2012 but stocks of ethanol on had are up by just over 10 percent over last year. So we have production down by 10 percent and stocks up by 10 percent – seems that corn demand for ethanol production is on the weak side.
As to corn prices, until we see some new South American corn crop the USA corn prices will remain steady to higher but the longer-term trend once Argentina and Brazil can ship should be to lower prices as supply outweighs demand.
Soybeans, much like corn, moved higher on concerns over the weather in Argentina and Brazil and the effect both on the crop and in some areas of the early harvest. While there is a great deal of hot and dry weather in some areas of Argentina it looks like the situation should improve in coming days as some beneficial rains are expected but some experts feel that up to one third of the Argentina soybeans will still be much too dry.
The USA has seen some new soybean sales to China booked in the past couple of weeks but then the USA is about the only game in town at present. Experts are saying that there seems to be little reason to expect a serious drop in soybean prices at present and most are expecting prices to move higher in coming days. Of course, if the situation on weather worsens even a little in South America then we could be in for an interesting rally in soybean/soymeal prices.
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 309>>304 |
| Wheat, USA Hard Red Winter 12 protein | USD 347/349 |
| Wheat, milling Black Sea 11.5 pro | USD 352/358 |
| Wheat, soft milling, France, Rouen port | USD 344/346 |
| Wheat, milling, Argentina, Necochea port | USD 355/360 Feb/Mar |
| Wheat, feed, Black Sea | USD 305/310 |
| Barley, France, Rouen port | USD 314/316 |
| Barley, feed, Argentina, Necochea port | USD 295/305 Feb/Mar |
| Barley, feed, Black Sea | USD 317/325 |
| Barley, feed, USA Pacific Northwest | USD 330/335 |
| Corn, FOB NOLA USA | USD 313/315 Feb/Apr |
| Corn, FOB Argentina ----- spot price | USD 299/297 Feb/Mar |
| Corn, FOB Argentina port, upriver | USD 286>>271 Apr/Jun |
| Corn, FOB Brazil port ----- spot price | USD 298/296 Feb/Mar |
| Corn, FOB Brazil port | USD 265>>249 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 319/323 |
| Sorghum, FOB Argentina port, high tannin, GMO free | USD asked 240/bid 225 Mar/May |
| Soymeal, 48 protein, FOB NOLA | USD 527/530 Feb/Mar |
| Soymeal, 48 protein, USA, Rotterdam | USD 548/552 Feb/Mar |
| Soymeal, Argentina, Rotterdam | USD 523>>448 F/>>/J/J |
| Soymeal, 47 pro, FOB Argentina | USD 478>>425 F/>>/J/J |
| Soymeal, 48 protein, Brazil, Rotterdam | USD 525>>452 Feb/>>/J/J |
| Soymeal, FOB Brazil | USD 480>>447 May/J/J |
| Soymeal, 48 protein, India FOB | USD 540/545 |
Bulk vessel shipments, minimum 5000 m/t
| Corn Gluten Feed, USA FOB NOLA | USD 277/282 m/t |
| Corn Gluten Meal, USA FOB NOLA | USD 730/740 m/t |
| DDGS, 35 profat, USA FOB NOLA | USD 342>>339 m/t |
| DDGS, 35 profat, CNF Asian ports | USD 394/398 m/t |
CNF prices for DDGS to Asia seem to be moving a little higher every week – some of this is due to stronger DDGS prices in the USA but also due to increases in container freights to Asia coupled with the complications of strikes at USA export facilities.
With the drop in production levels for ethanol, the supply of DDGS is shrinking and this is putting upward pressure on prices, both domestic and export. Domestic demand in particular is quite strong, as DDGS users expect ethanol production to continue to drop and DDGS to get more difficult to source. For export buyers, most of whom are waiting for lower prices, there is the risk that waiting for lower prices just mean that you will be paying higher prices in weeks to come.
As was reported last week, the supply of corn gluten meal seems to be currently running ahead of the demand levels and prices have dropped considerably in the past few weeks and, on a protein unit cost basis, is certainly becoming a much more competitive product. One would expect that with the very high world price for fishmeal there would be considerable demand for CGM but it seems that, at least for now, the supply is running ahead of the demand and prices are at a very attractive level.
In recent weeks we have been doing a good level of CGM in containers to Egypt but with the current problems in Egypt some container freight lines are limiting shipments to Egypt or are increasing freight rates to cover the risk of delayed vessels in Egyptian ports – so, buyers in Egypt are not seeing the benefit of lower USA CGM prices.
Container shipments, minimum 200 m/t
| Argentina Meat & Bone meal, 45 protein | USD 720/740 CNF Asia |
| Brazil Meat & Bone meal, 45 protein | USD no prices CNF Asia |
| Paraguay Meat & Bone meal, 45 protein | USD 530/550 m/t CNF Asia |
| Europe Meat & Bone meal, 45 protein | USD 480/520 m/t CNF Asia |
| USA Meat & Bone meal, 50 protein | USD 730/750 m/t CNF Asia |
| Australian MBM , 45 protein | USD 690/710 m/t CNF Asia |
| Australian MBM, 50 protein | USD 730/750 m/t CNF Asia |
| Australian Feathermeal | USD 700/730 m/t CNF Asia |
| USA Feathermeal, 80 protein | USD 870/890 m/t CNF Asia |
| USA Poultry Meal, feed grade | USD 710/750 m/t CNF Asia |
| USA Poultry Meal, pet food grade | USD 1100/1150 m/t CNF Asia |
| Australian Poultry meal, pet food grade | USD 940/1000 m/t CNF Asia |
USA domestic animal protein prices were quite strong this week with meat and bone meal leading the way. The relationship of MBM versus soymeal is getting back to more reasonable levels after quite a period of MBM selling at a discount to soymeal in the USA.
Export prices from the USA are higher for all animal proteins as domestic prices push up export prices with feathermeal being about the strongest this week but MBM is not far behind. Australian and NZ animal protein seems to be much better priced than USA after the price increases and the hot dry weather in Australia may see more animals going to slaughter, which will increase the supply and could keep prices in Asia quite weak.
We have seen a little more available MBM from Paraguay in the past couple of weeks but their prices still seem to be a little too high for buyers in Asia, as MBM prices from Europe look to be at least 5 percent lower than Paraguay and delivery time is much shorter.
Protein prices will probably continue to track soymeal but it will be interesting to see what happens to price and supply from Europe when the EU allows the use of non-ruminant animal protein in fishfeed later in 2013 – will export supply drop, will prices rally, will poultry meal, pork meal and feathermeal become tighter in supply – all questions to be answered later in the year.
The following indications are at producer's factory, ex-works in bulk
| Meat and bone meal, USA, 50 protein | USD 405/430 m/t |
| Feathermeal 80 protein USA | USD 660/690 m/t |
| Poultry meal 57 protein, Eastern USA | USD 555/600 m/t |
SECTION 2 --- FISHMEAL COMMENTS AND PRICES: PERUVIAN
Fishing is now over and based on the unofficial final figures it looks like the entire January quota was not landed. It looks like about 35,000 m/t was missed on the quota but this may be lower once the official numbers are available --- so that is 47,000 m/t short in December and 35,000 m/t short in January – just over 10% short on the quota.
Business seems to have picked up a little as the fishing ended – probably because producers seemed to be more flexible in their sales prices and buyers became a tad more interested. Still, there is not much in the way of fishmeal sitting around. According to industry numbers the maximum level looks to be about 45,000 m/t unsold.
There are rumours in Peru that the next fishing season may also see a greatly reduced fishing quota and this, if true, will certainly help to keep prices very firm. Last year the quota was set at 2.7 million m/t for the early season but rumours say that this year it will only be at 1.5 million m/t. Of course rumours are just rumours and no one knows for sure but if anything like 1.5 million m/t is set then fishmeal buyers will see strong prices and even greater demand in other protein alternatives.
It is reported in the trade that several large producers could be fined for exceeding the level of undersized fish in their catch. The problem that producers have is that smaller fish, that should be able to pass through the nets, can get trapped in the nets due to the volume and are landed. With laws existing about throwing fish back in the sea, the producers are obligated to keep the undersized fish and then become liable for a significant fine from the government inspectors. It seems that there is no 100 percent solution for solving the problem of catching some small fish with the larger fish.
There was also the announcement in the EU last week that non-ruminant animal protein will be allowed in fishfeed in 2013 --- this should reduce the requirement for fishmeal in the EU but will also reduce the amount of animal protein that is available for export.
As to prices – there does not seem to be any good reason to expect a major drop in prices although, as mentioned above, some producers are being a little more flexible in pricing, so there may be some savings available.
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
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