Weekly report March 16, 2013

 

 

Hammersmith Marketing Ltd  - Grain Trading

WEEKLY FEED GRAIN AND PROTEIN REPORT   March 16, 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 and VEGETABLE/ANIMAL PROTEIN

 

Corn had a reasonably strong week this eek as prices moved up USD 6 to 8 mt depending on the shipping position.  Export corn sales for the week were not all that bad and there was a feeling of tightness in the domestic USA corn market that helped to keep prices steady.  Looking at the crop situation, there seems to be a good level of ground moisture for most of the corn area this year, better than has been seen in some areas for the past couple of years.

 

The corn problem for now is with the old stock and how much of it there is to meet current feed and ethanol demand.  Many feel that the supply is tighter than is comfortable and that prices are going to have to rally in order to ration demand a little.  Of course, there is also the chance of corn coming in from Brazil, if they can ever load a ship, and the story of feed wheat replacing corn in some areas. It is difficult to have much of the corn business swing to wheat due to the geographic areas of supply and demand: seems that the cost of transportation of wheat to areas of need may make it too expensive versus corn in the area.  So the increase of wheat use for feed may be limited.

 

Looking at various trade report this weekend, it looks like there are more "exports" calling for higher corn prices than for lower.

 

Soybeans and soymeal were down quite strongly on the week but, as has been highlighted by a number of trade reports, both seem to be moving up and down within a trading range with no clear overall trend to either higher or lower prices.  Yes a drop in soybean prices of USD 10 m/t is significant but if it is keeping within the current price range then it is not saying much.

 

Business for soybeans was a little slow last week but it is expected that more business will move to the USA from Brazil as the backlog of ships just gets bigger and bigger everyday.  Buyers are also looking to Argentina but it is still a little too early to expect much from that origin perhaps in a few weeks once we get well into the Argentina harvest.

 

The experts all seem to be on the side of lower prices, especially for USA origin soybeans and meal, as more and more lower priced South American product is going to be in the market.  Other than the current shipping problems in Brazil, no buyer is going to pay a major price premium to buy USA product, so USA price must move lower.

  

  

   

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 293>>285 Mar/July
Wheat, USA Hard Red Winter 12 protein	USD 323/325
Wheat, milling Black Sea 11.5 pro	USD 305/315
Wheat, soft milling, France, Rouen port	USD 319/321
Wheat, milling, Argentina, upriver	USD 330/350 Mar/May
Wheat, feed, Black Sea	USD 300/305
Barley, France, Rouen port	USD 287/289
Barley, feed, Argentina, upriver	USD 277/285 Mar/May
Barley, feed, Black Sea	USD 315/320
Barley, feed, USA Pacific Northwest	USD 330/335

 

 

Corn, FOB NOLA USA	USD  310>>291 Mar>>May
Corn, FOB Argentina port, upriver	USD  271>>263  Apr/May/Jun
Corn, FOB Brazil port	USD  247>>236  July/Aug/Sep
Corn, FOB Black Sea	USD  278/283
Corn, FOB France	USD  299/301
Sorghum, Black Sea	USD  n/a
Sorghum, FOB Texas, low tannin, GMO free	USD  317/320
Sorghum, FOB Argentina port, high tannin, GMO free	USD  asked 235/bid 225 Apr/June

 

 

Soymeal,  48 protein, FOB NOLA	USD  534/537  March
Soymeal, 48 protein, USA, Rotterdam	USD  559/562 March
Soymeal, Argentina, Rotterdam	USD  530>>470 Mar/>>/J/J/A
Soymeal, 47 pro, FOB Argentina	USD  498>>442  March/>>/J/J/A
Soymeal, 48 protein, Brazil, Rotterdam	USD  510>>475 Mar/>>/J/J/A
Soymeal, FOB Brazil	USD  456>>440  May/>>J/J/A
Soymeal, 48 protein, India FOB	USD  585/590

 

 

Bulk vessel shipments, minimum 5000 m/t

 

Corn Gluten Feed,  USA FOB NOLA	USD   263/265 m/t
Corn Gluten Meal,  USA FOB NOLA	USD   670/680 m/t
DDGS, 35 profat, USA FOB NOLA	USD   342>>340 m/t Mar>>May
DDGS, 35 profat, CNF Asian ports	USD   397>>394 m/t

 

 

 

DDGS prices took another little jump higher this week, some of that due to stronger corn prices but most due to a short-term tight supply situation for DDGS.  The ethanol industry is looking at what could be a tight corn supply situation over the next few weeks and with tight supply, higher corn prices and squeezed margins it is going to be very difficult for DDGS prices to be expected to move any way but up.  There does not seem to be a great deal of export business at present, at least not in the near-term, as buyers continue to look at shipments further out with lower prices.  But looking at the prices in the market today there does not seem to be much of a chance of lower DDGS prices before late June and into July:  if it even happens.

 

There was no real change in the prices for corn gluten feed or corn gluten meal this week but is corn prices continue to move higher then we should see these two items also make a move higher.  Export demand for corn gluten meals still quite good, actually the CGM export market always seems to be quite good, it is the CGF market that tends to go up and down as buyers come and go.  The CGF and DDGS export business to the EU is picking up a little, at least to Ireland, as the severe shortage of feed wheat in the region has feed producers looking everywhere for cost effective alternatives.

 

Corn gluten feed and meal prices should follow corn prices but with high protein CGM following both corn and soymeal prices as best it can.      

 

 

Container shipments, minimum 200 m/t

 

Argentina Meat & Bone meal, 45 protein	USD 690/710  CNF Asia
Brazil Meat & Bone meal, 45 protein	USD   no prices   CNF Asia
Paraguay Meat & Bone meal, 45 protein	USD 510/520 m/t CNF Asia
Europe Meat & Bone meal, 45 protein	USD   no prices CNF Asia
USA Meat & Bone meal, 50 protein	USD 770/800 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 770/790 m/t CNF Asia
USA Feathermeal, 80 protein	USD 920/930 m/t CNF Asia
USA Poultry Meal, feed grade	USD 760/775 m/t CNF Asia
USA Poultry Meal, pet food grade	USD 1220/1250 m/t CNF Asia
Australian Poultry meal, pet food grade	USD 980/1020 m/t CNF Asia

 

 

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

 

Meat and bone meal, USA, 50 protein	USD  520/540 m/t
Feathermeal  80 protein USA	USD  730/750 m/t
Poultry meal  57 protein, Eastern USA	USD  600/620 m/t

 

 

Interestingly enough, even with soymeal prices dropping quite a bit during the week the prices for animal protein products moved higher: both in domestic and export markets.  The VIV trade show is on in Asia and, with all the major buyers at the show,  the word is that they don't seem all that happy to pay higher prices for proteins.  The difficulty for USA export prices is that as long as domestic demand is strong all prices will remain quite firm.  Of course we also have the effect of a limited supply of fishmeal, which is creating more demand for other animal proteins.  While feed producers can use vegetable protein plus amino acids in some formulations this cannot be done for every feed formula --- fishmeal or animal protein is a requirement in many feed formulations and, of course, there is always the requirement for the pet food industry that cannot be overlooked.

 

We were contacted last week by a company looking for pure chicken meal, pure rabbit meal and pure turkey meal -- one assumes for the pet food industry although the buyer wasn't specifying.  These products seem to be about as rare as hen's teeth.

 

When you read the fishmeal comment below and see the uncertainty in the Peru fishmeal industry and the effect that this could have on protein demand then you can understand why current prices are firm and could go higher depending on what happens to fishmeal supplies. 

 

 

SECTION 2 --- FISHMEAL COMMENTS AND PRICES: PERUVIAN

 

There were some feelings out of Peru this week that the government announcement on the new quota may not be too far away but that the quota could be set quite low.  These stories all come from a couple of off-hand comments made by the Department of Fisheries. Then later in the week was the comment that there is a large biomass available but that the percentage of juvenile fish is very high which could limit the size of the quota.  There were also some stories that the Peru fishing quota could be very small or perhaps no quota at all:  no quota would certainly come as a surprise to the industry and create severe hardship for all those who depend on the fishmeal industry for their livelihood.

 

There is quite a lot in the Peru press on the fishmeal industry, as the government and the industry fight over how the fishing is done and how the industry is operated.  As everyone is aware, the fishmeal industry is much more "green" conscious than it ever was in the past and much of this is due to rules set by past governments but now the fishing industry is saying that the government is being much too demanding and is making new rules that could bring an end to the fishmeal industry in Peru.  The government does lean very strongly toward fishing for food rather than fishing for animal feed but there are still a lot of anchovy out there that will never be used for food and are perfect for animal feed use as fishmeal.  One would think that both the fishing for food and fishing for feed industries should be able to contribute greatly to the economy of Peru while still insuring that there is managed fishing that does not destroy the fish stocks.

 

Enough of that and on to business:  seems that there is not much business in Peru as old stocks are low and no one much is jumping into the market for new supplies in the next fishing season.  According to trade reports there is only about 20,000 m/t booked so far for the next season.  Once the quota for the new season is announced then we should see some buying action: the lower the quota the higher the demand should be and the higher prices will get pushed.

 

As I have mentioned before, there are no other fishmeal producing countries that can match the production size of Peru and if the quota is reduced the supply side will be very tight and fishmeal prices everywhere should move higher.

 

We all await the Peru quota announcement with anticipation and trepidation.

    

 

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	2020/2050 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