Hammersmith Marketing Ltd - Grain Trading
WEEKLY FEED GRAIN AND PROTEIN REPORT April 27, 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
New crop corn and soybeans took a wee hit this week as China demand for 2013 crop was uncertain while at the same time old crop corn and soybeans were able to hold their prices much better. The export situation in Brazil continues to affect old crop prices, as buyers need to cover immediate needs from limited USA supplies. What should then happen later on is that, once Brazil catches up and everyone sees there is lots of supply but fewer orders, since many moved to the US, the price of soybeans out of Brazil should drop even lower.
Corn plantings in the US continue to be behind average for the year but experts have pointed out that there is no correlation between a couple of weeks later planting and reduced crop yields. There have been may years with late spring planting and very good yields --- the crop success is more in what happens in the growing season than exactly when the seeds went in the ground.
The weather looks to be good for planting in the US over the next couple of weeks so farmers will probably quickly catch up with about where they want to be. There is some frost expected for parts of the US but with not much corn planted there is little risk of any crop damage.
Experts say that if good planting weather is seen for a couple of weeks then there should be a quick tumble in new crop corn prices – as it is there is about a USD 40 m/t spread between higher priced old crop and new crop with some experts saying that new crop could drop another USD 25 m/t but only if planting gets rolling at supersonic speed.
Soybean meal had a higher week with old crop soybeans being very close to unchanged. The demand for export soymeal was very good as there are concerns that Argentina may not be able to export soymeal at normal levels due to farmers holding soybeans. The price for the next few weeks is expected to be steady to higher for beans and meal, at least until the situation with supply in Argentina is more fully understood.
On the soybean planting side, as discussed in previous reports, farmers are watching the corn planting progress in order to decide to continue planting corn or to switch to soybeans if delays get to be too long. A switch to soybeans will bring weakness to beans and meal in the new crop but it is still to soon to know if there will be any need for a switch.
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 279/281 May/July |
| Wheat, USA Hard Red Winter 12 protein | USD 325/328 |
| Wheat, milling Black Sea 11.5 pro | USD 280/290 July/August |
| Wheat, soft milling, France, Rouen port | USD 317/320 |
| Wheat, milling, Argentina, upriver | USD 310/320 May/June |
| Wheat, feed, Black Sea | USD 285>>260 May>>Aug |
| Barley, France, Rouen port | USD 273/275 |
| Barley, feed, Argentina, upriver | USD 250/260 Dec 2013 |
| Barley, feed, Black Sea | USD 300>>275 |
| Barley, feed, USA Pacific Northwest | USD 270/275 |
| Corn, FOB NOLA USA | USD 276>>270 May>>July |
| Corn, FOB Argentina port, upriver | USD 250>>240 May/July |
| Corn, FOB Brazil port | USD 212>>205 July/Aug/Sep |
| Corn, FOB Black Sea | USD 275>>260 May>>Aug |
| Corn, FOB France | USD 279/284 |
| Sorghum, Black Sea | USD n/a |
| Sorghum, FOB Texas, low tannin, GMO free | USD 289/291 |
| Sorghum, FOB Argentina port, high tannin, GMO free | USD asked 210/bid 195 May/July |
| Soymeal, 48 protein, FOB NOLA | USD 504/508 May/June |
| Soymeal, 48 protein, USA, Rotterdam | USD 539/543 May/June |
| Soymeal, Argentina, Rotterdam | USD 518>>450 Spot/>>/J/J/A |
| Soymeal, 47 pro, FOB Argentina | USD 477>>417 May/>>/J/J/A |
| Soymeal, 48 protein, Brazil, Rotterdam | USD 515>>440 Spot/>>/J/J/A |
| Soymeal, FOB Brazil | USD 430>>410 May/>>J/J/A |
| Soymeal, 48 protein, India FOB | USD 650/670 |
Bulk vessel shipments, minimum 5000 m/t
| Corn Gluten Feed, USA FOB NOLA | USD 225/230 m/t |
| Corn Gluten Meal, USA FOB NOLA | USD 600/610 m/t |
| DDGS, 35 profat, USA FOB NOLA | USD 289/295 m/t May/June |
| DDGS, 35 profat, CNF Asian ports | USD 347/352 m/t |
Due to problems in the Mississippi River, the export price for all corn by-products moved a little higher this week – domestic prices were actually a little lower for most but, with the higher cost of moving the products to export locations, the buyers were asked to pay a little more. There is also some question on what the effect of bird flu in China will have on the export business and this lack of new business from China is helping to keep CNF Asia prices down. With corn prices being down on the week and soymeal prices higher, there is a two-way push on prices but so far it looks like the corn by-products, at least for this week, are tending to follow corn lower rather than soymeal higher.
Looking at DDGS, the production of ethanol this year is close to 20 percent below last year, which also reduces the production of DDGS but trade experts see the ethanol production getting back to last years level in the next few months which will increase the supply of DDGS --- certainly too soon to say that this will decrease prices but one would think that increased supply would at least stop prices from going higher.
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 535/540 m/t CNF Asia |
| Europe Meat & Bone meal, 45 protein | USD 520/550 m/t CNF Asia |
| USA Meat & Bone meal, 50 protein | USD 740/770 m/t CNF Asia |
| Australian MBM , 45 protein | USD 670/675 m/t CNF Asia |
| Australian MBM, 50 protein | USD 720/730 m/t CNF Asia |
| Australian Feathermeal | USD 840/850 m/t CNF Asia |
| USA Feathermeal, 80 protein | USD 860/870 m/t CNF Asia |
| USA Poultry Meal, feed grade | USD 720/740 m/t CNF Asia |
| USA Poultry Meal, pet food grade | USD 1150/1170 m/t CNF Asia |
| Australian Poultry meal, pet food grade | USD 1140/1160 m/t CNF Asia |
The following indications are at producer's factory, ex-works in bulk
| Meat and bone meal, USA, 50 protein | USD 450/470 m/t |
| Feathermeal 80 protein USA | USD 650/670 m/t |
| Poultry meal 57 protein, Eastern USA | USD 530/540 m/t |
Both USA and Australian export and domestic meat and bone meal prices were lower this week. On the international side there seems to be a very good supply of protein available with prices trending lower, which is giving animal protein buyers the feeling that they can expect lower prices to come. Perhaps some of the weakness in the export market is due to the avian flu situation in China and the concern that demand will drop off considerably for all feed ingredients.
In the USA there is a good supply of animal proteins and except for pet food use demand the overall demand for animal proteins tends to weaken a little this time of year and this helps to push prices lower. Of course, in the spring and summer all of North America looks to their BBQ's so meat demand is higher which creates additional stocks of animal proteins at a time when demand is slipping.
I guess that the only factor that can push proteins up at present is the new fishing quota in Peru and the effect that that will have on fishmeal prices --- if fishmeal moves higher there will be increased demand for animal proteins in the international market and this could move prices higher once again.
SECTION 2 --- FISHMEAL COMMENTS AND PRICES: PERUVIAN
Well, we now have the new quota for the next main fishing season in Peru: 2,050,000 m/t of fish in the period from May 17 until July 31, 2013 – last year was 2.5 million m/t. There has been no sub-division of the quota so it will run in full from the start and finish as soon as the quota is landed or we reach July 31. One very interesting thing about the announcement is the government's information that the biomass has increased from just over 5 million m/t to a current level of 12 million m/t – all in only a few months. This amazing increase in the biomass calls into question the accuracy of the numbers but then is it the old numbers that were wrong or the current numbers --- one suspects that it is probably the old numbers that were wrong and that the 5 million m/t level was just an underestimate.
So, at least we know when there will be fishing and that there will not be any fishmeal available before June/July shipment and this new supply, of about 500,000 m/t, will have to cover all business up to about the end of 2013.
According to trade reports, the supply of fishmeal in China is getting quite low compared to normal stock levels and that with no new shipments from Peru possible for a couple of months, at a minimum, then there could be a sudden rush of demand from China for July/August shipments.
And, where are we going with prices? There have been a couple of rumblings in the trade that the price for higher grades of fishmeal is up about USD 50 m/t but there has not been enough sales activity since the fishing announcement to be able to determine if there has been a change in price direction. However, the trade feeling seems to be that lower prices are just not too likely from now until the end of 2013. Higher prices seem to be much more of a possibility than lower 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 | 1630/1640 m/t |
| 65/66 pro standard steam | 1670/1680 m/t |
| 67 protein standard steam | 1740/1750 m/t |
| 67 protein SD 150 TVN | 1900/1920 m/t |
| 67 protein SD 120 TVN | 2060/2070 m/t |
| 67 protein SD 1000 hist, 120 TVN | 2080/2100 m/t |
| 68 protein SD 500 hist, 120 TVN | 2120/2130 m/t |
| | |
| Fish oil .. crude bulk | 2500/2550 |
| Fish oil – crude drums | 2650/2700 |
| Fish oil – flexitank | 2600/2650 |
| Fish oil – Omega 3 – 28%EPA/DHA | 2900/3000 |
| | |
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
