Hammersmith Marketing Ltd - Grain Trading
WEEKLY FEED GRAIN AND PROTEIN REPORT March 30, 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
It is very interesting to have an important USDA report issued on a Thursday then have everyone go home for a three-day weekend just after complete panic had hit the market. It will be very interesting to see what happens when trading opens up for next week. Will we continue to see futures prices falling, as happened on Thursday or will there be a sudden buying rally as everyone thinks that prices are a bargain. Who knows, but it should be interesting.
Looking at the Thursday information the main reason for the drop in corn prices was the much larger than expected increase in USA corn and soybean stocks which means that supplies are not going to be nearly as tight as everyone had been expecting. In the past few days there had been some significant farmer selling of corn into the market so perhaps the farmers were the only one who knew how large the stocks actually were while the rest of us worried about shortages and paid high prices.
The Thursday report overwhelmed all other news in the market so there was little discussion about weather, export sales, feed levels: just talk about stocks and stocks and stocks. We will see what Monday brings.
For soybeans and soymeal the story was about the same as for corn with higher ending stock and if you look at the stocks to use ratio for the past few years then this year is the best for several years, which would certainly seem to be reason to expect lower prices. Although with the plantings expected to be a little lower perhaps the overall production numbers for 2013 will limit the drop in prices for soybeans.
Soybean experts feel that there may be room for the nearby futures prices to drop by as much as USD 20 m/t in coming days but they don't expect too much drop in prices further out as they are already at a significant discount to current old crop prices.
As with soybeans, experts do feel that the nearby old crop corn futures prices could drop further but again there may not be too much weakness in new crop futures as they are at a large discount to old crop.
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 271>>268 Apr/July |
| Wheat, USA Hard Red Winter 12 protein | USD 316/318 |
| Wheat, milling Black Sea 11.5 pro | USD 305/315 |
| Wheat, soft milling, France, Rouen port | USD 326/328 |
| Wheat, milling, Argentina, upriver | USD 325/340 Apr/May |
| Wheat, feed, Black Sea | USD 290/295 |
| Barley, France, Rouen port | USD 290/292 |
| Barley, feed, Argentina, upriver | USD 275/285 Apr/May |
| Barley, feed, Black Sea | USD 295/300 |
| Barley, feed, USA Pacific Northwest | USD 350/355 |
| Corn, FOB NOLA USA | USD 301>>292 Apr>>May |
| Corn, FOB Argentina port, upriver | USD 254>>250 Apr/May/Jun |
| Corn, FOB Brazil port | USD 232>>220 July/Aug/Sep |
| Corn, FOB Black Sea | USD 285/289 |
| Corn, FOB France | USD 304/306 |
| Sorghum, Black Sea | USD n/a |
| Sorghum, FOB Texas, low tannin, GMO free | USD 309/311 |
| Sorghum, FOB Argentina port, high tannin, GMO free | USD asked 225/bid 215 Apr/June |
| Soymeal, 48 protein, FOB NOLA | USD 500/505 April |
| Soymeal, 48 protein, USA, Rotterdam | USD 530/535 April |
| Soymeal, Argentina, Rotterdam | USD 524>>470 Spot/>>/J/J/A |
| Soymeal, 47 pro, FOB Argentina | USD 470>>448 Apr/>>/J/J/A |
| Soymeal, 48 protein, Brazil, Rotterdam | USD 498>>472 Spot/>>/J/J/A |
| Soymeal, FOB Brazil | USD 456>>440 May/>>J/J/A |
| Soymeal, 48 protein, India FOB | USD 590/600 |
Bulk vessel shipments, minimum 5000 m/t
| Corn Gluten Feed, USA FOB NOLA | USD 248/250 m/t |
| Corn Gluten Meal, USA FOB NOLA | USD 630/640 m/t |
| DDGS, 35 profat, USA FOB NOLA | USD 327>>325 m/t Apr>>May |
| DDGS, 35 profat, CNF Asian ports | USD 393/395 m/t |
There was quite a good sized drop in corn gluten meal prices this week as the fall in both corn and soymeal prices hit the market all at once. It may just be that the drop in prices shown at the end of the week for CGM was just a panic reaction to the weak market but we wont know until a few days trading next week
Neither corn gluten feed nor DDGS dropped as much as CGM but that may just be because it was very difficult to get accurate market prices after the large drop in corn and soybean prices after the USDA report. With the report coming on a Thursday then followed by a three day weekend it is always very difficult to get a good idea of exactly where the prices are.
By mid-week next week we will have a much better idea of where prices for corn by-products are going to settle but buyers can be certain that if corn and soybeans continue their fall then by-products will be following along.
There was some discussion this week about the production of DDGS using various grains and the effect of using up to 20 percent of wheat or sorghum in place of corn. The industry opinion seems to be that the only obvious change could be a little darker DDGS but that the actual specifications will be very, very close to that of 100 percent corn DDGS. Some experts were saying that buyer would probably have no idea that their DDGS shipments were part wheat or sorghum. It does make sense for ethanol producers to use the lowest cost feedstock in their production and if wheat or sorghum is more cost effective than corn the why not use them.
Container shipments, minimum 200 m/t
| Argentina Meat & Bone meal, 45 protein | USD no prices |
| Brazil Meat & Bone meal, 45 protein | USD no prices |
| Paraguay Meat & Bone meal, 45 protein | USD 530/535 m/t CNF Asia |
| Europe Meat & Bone meal, 45 protein | USD no prices |
| USA Meat & Bone meal, 50 protein | USD 770/790 m/t CNF Asia |
| Australian MBM , 45 protein | USD 710/720 m/t CNF Asia |
| Australian MBM, 50 protein | USD 760/770 m/t CNF Asia |
| Australian Feathermeal | USD 810/820 m/t CNF Asia |
| USA Feathermeal, 80 protein | USD 925/935 m/t CNF Asia |
| USA Poultry Meal, feed grade | USD 760/775 m/t CNF Asia |
| USA Poultry Meal, pet food grade | USD 1230/1250 m/t CNF Asia |
| Australian Poultry meal, pet food grade | USD 1060/1100 m/t CNF Asia |
The following indications are at producer's factory, ex-works in bulk
| Meat and bone meal, USA, 50 protein | USD 515/530 m/t |
| Feathermeal 80 protein USA | USD 700/720 m/t |
| Poultry meal 57 protein, Eastern USA | USD 590/600 m/t |
Animal protein prices in the USA were quite steady this week and even up from some plants but one expects that the weakness in vegetable proteins is bound to spread to animal protein in coming days. We now see meat and bone meal at a significant premium to soymeal in the USA market and this should cause a drop in demand and a similar drop in prices, at least that is what would be expected.
Prices in Asia were a little firmer in some areas but experts feel that the market may be a little toppy and with an expected increase in Australian production there could be some weakness sneaking in to prices in the next couple of weeks.
Also, if the drop in soymeal and corn gluten prices continues then buyers will be looking to swing their purchases from animal to vegetable proteins where possible. Experts in the USA are saying the animal protein prices, at least for MBM, should be moving lower as the slaughter numbers for beef increase once we get close to the summer BBQ season.
One thin that could affect the world market for animal proteins is the possibility that the EU will all the use of animal protein once again in poultry and pig feed, this after a ten year ban that was caused by the outbreak of BSE. There would continue to be a ban on the use of animal protein in feed for sheep and cattle as these are the animals where BSE and similar diseases are found. If this use goes into effect it should greatly reduce the export supply of EU animal proteins to feed markets in Asia and will help to push up prices.
SECTION 2 --- FISHMEAL COMMENTS AND PRICES: PERUVIAN
There is very little to report from Peru this week. With it being Easter week most offices in Peru were closed on Thursday and Friday and probably again on Monday. So there is not too much happening in Peru. Very little business reported in Peru but then with no production and little stock what could happen. There is still very little on the books for the next fishing season but one assumes that that should start to be booked quite soon, or so we hope.
There was an import estimate out of China last week, which was a shock to everyone. The estimate from the JCI conference has total China fishmeal imports for 2013 down by 20 percent. While a drop in imports would be quite a shock it could fit in well with a drop in production in Peru, assuming lower quotas, and could help to keep prices at a reasonable level.
I was looking at the China fishmeal import numbers for 2013 and it is interesting to note that shipments from Chile to China are greater than from Peru. Chile exports were just over 36,000 m/t while Peru was just over 35,000 but still you don't often see Chile out shipping Peru to China. Shipments from the USA to China were also quite good at just over 10,000 m/t.
So, again, nothing much to say on fishmeal from Peru with little business and no change in prices
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 | 1600/1630 m/t |
| 65/66 pro standard steam | 1650/1670 m/t |
| 67 protein standard steam | 1700/1720 m/t |
| 67 protein SD 150 TVN | 1850/1900 m/t |
| 67 protein SD 120 TVN | 2050/2070 m/t |
| 67 protein SD 1000 hist, 120 TVN | 2070/2080 m/t |
| 68 protein SD 500 hist, 120 TVN | 2100/2130 m/t |
| | |
| Fish oil .. crude bulk | 2500/2600 |
| Fish oil – crude drums | 2600/2650 |
| Fish oil – flexitank | 2550/2650 |
| 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
