Weekly Report -- April 06, 2013

 

 

Hammersmith Marketing Ltd  - Grain Trading

WEEKLY FEED GRAIN AND PROTEIN REPORT   April 06, 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

 

Old crop corn and soybeans too quite a kicking this week as increased supply expectations moved markets lower and farmer selling helped push things even further down.  With corn prices the old crop dropped about USD 20 m/t more than the new crop, which makes senses as the expected shortage was in the old crop and now the shortage seems to be much less than was expected.

 

The US Grains Council report this week was saying that the corn market is very complicated at present with ethanol producer's actions very significant for corn prices but also corn feed use in the USA following livestock prices and feed lot operations.  There are no easy answers to where the market will go and which factors will push in what direction.

 

For now, with corn, it looks like the supply is better and both cash and futures prices are selling of as farmers and investment funds try to make a few dollars before prices go any lower.  We will reach a point where it becomes difficult for prices to fall any further but many experts feel that we are not at that point as yet.  Old crop corn is still selling at a USD 25 to 35 m/t premium to new crop so perhaps there is more room for that gap to narrow.

 

Old crop soybeans were down too this week, much like corn, but the old crop/new crop spread in soybeans is not nearly as great as in corn although there is still a USD 10/12 premium for old crop.

The new bird flu situation in China added to market concerns as fears of decreased soybean demand surfaced and the weather in South America was looking quite good with little delay in harvest seen.  The ports in Brazil are catching up a little with their very serious shipping backlog, so it looks like there are a number of good reasons why soybean prices should move a little lower.

 

Of course there is the latest USDA WASDE report due this coming week and, as usual, that can change all the plans and trends and send the grain and oilseed markets racing off in some new direction – for that we need to wait a few days.

 

 

USA corn and soymeal exports – 2013 to end February – major destinations – m/t

 

Country	Corn	Soymeal
Canada	53,000	141,200
China	670,600
Columbia		119,100
Cuba	80,000
Denmark		193,500
Egypt		121,100
Italy		121,800
Japan	714,400
Mexico	490,700
Poland		159,500
Saudi Arabia	70,000
Taiwan	62,400
Turkey		208,100
Venezuela	117,500	131,000

 

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 275/280 Apr/July
Wheat, USA Hard Red Winter 12 protein	USD 317/320
Wheat, milling Black Sea 11.5 pro	USD 270/280 July/August
Wheat, soft milling, France, Rouen port	USD 328/330
Wheat, milling, Argentina, upriver	USD 305/320 Apr/May
Wheat, feed, Black Sea	USD 290>>265 Apr/Aug
Barley, France, Rouen port	USD 286/288
Barley, feed, Argentina, upriver	USD 275/285 Apr/May
Barley, feed, Black Sea	USD 295/305
Barley, feed, USA Pacific Northwest	USD 270/285

 

 

Corn, FOB NOLA USA	USD  275>>269 Apr>>Jun
Corn, FOB Argentina port, upriver	USD  245>>236  Apr/May/Jun
Corn, FOB Brazil port	USD  217/225  July/Aug/Sep
Corn, FOB Black Sea	USD  293>>275 May>>Aug
Corn, FOB France	USD  297/301
Sorghum, Black Sea	USD  n/a
Sorghum, FOB Texas, low tannin, GMO free	USD  282/285
Sorghum, FOB Argentina port, high tannin, GMO free	USD  asked 215/bid 200 Apr/June

 

 

Soymeal,  48 protein, FOB NOLA	USD  487/490 April
Soymeal, 48 protein, USA, Rotterdam	USD  520/525 April
Soymeal, Argentina, Rotterdam	USD  515>>452 Spot/>>/J/J/A
Soymeal, 47 pro, FOB Argentina	USD  440>>415  Apr/>>/J/J/A
Soymeal, 48 protein, Brazil, Rotterdam	USD  479>>444 Spot/>>/J/J/A
Soymeal, FOB Brazil	USD  410>>403  May/>>J/J/A
Soymeal, 48 protein, India FOB	USD  640/650

 

 

Bulk vessel shipments, minimum 5000 m/t

 

Corn Gluten Feed,  USA FOB NOLA	USD   235/245 m/t
Corn Gluten Meal,  USA FOB NOLA	USD   615/630 m/t
DDGS, 35 profat, USA FOB NOLA	USD   293>>295 m/t Apr>>May
DDGS, 35 profat, CNF Asian ports	USD   364/368 m/t

 

The poor old corn by-product producers are in a bit of a bind with corn prices falling quickly but their stocks based on older, higher prices.  DDGS domestic and export prices has fallen by about USD 20 m/t and corn gluten meal is down by about USD 50 m/t – price drops that should be bringing out some buying interest, except for the fact that buyers have the feeling that corn prices can move lower and the so will all the by-products. 

 

Export buyers of these items are in a bit of a problem with their afloat and on hand cargoes having cost significantly more than current replacement and local buyers only wanting to pay replacement.  For example, shipments of corn gluten meal to Egypt in the first two months were very high and local buyers are now looking to local importers/sellers for price reductions in excess of USD 70 m/t – that is a great deal of money on about 70,000 m/t of imports.

 

The lower price on DDGS should see an increase in export business as USD 20 or 30 m/t lower makes DDGS work much better in low cost feed formulations in Asia.

 

As to price direction – keep your eyes on both corn and soymeal for direction trends.

 

 

USA corn by-product exports – 2013 to end February – major destinations – m/t

 

Country	DDGS	Corn gluten meal	Corn gluten feed
Canada	84,900	7,900
Chile		17,700
China	256,500
Egypt	40,000	57,900
Indonesia	40,100	24,800	3,600
Ireland	58,000		57,400
Israel			24,700
Japan	53,900
Malaysia		8,000
Mexico	195,400	15,000
Morocco			13,500
South Korea	63,500
Taiwan	37,800	5,900
Thailand	36.700	4,900
Turkey	110,500		45,500
UK	16,500
Vietnam	61,600	4,000

 

 

 

Animal protein prices slipped a little lower in both USA domestic and export markets this week as falling soymeal prices continued to affect all protein meal prices.  Buyers in Asia were active in the market but more for looking at prices rather than buying this since they all feel that prices will continue lower in coming days.  Australian prices were also lower this week and this helped to move all export prices a little lower.  As long as soymeal continues to move lower, the USA domestic buyer will be comparing feed and cost values between soymeal and MBM and this week soymeal was the protein of choice  --- this should mean a further drop in MBM prices.  Export prices have not dipped as much as domestic prices since it takes the export market a little longer to react but there is some weakness seen in export prices.

 

So, if we keep seeing lower soymeal and corn gluten meal prices then we should see all the animal protein prices following to lower levels. 

 

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 760/780 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 890/900 m/t CNF Asia
USA Feathermeal, 80 protein	USD 900/915 m/t CNF Asia
USA Poultry Meal, feed grade	USD 750/775 m/t CNF Asia
USA Poultry Meal, pet food grade	USD 1170/1200 m/t CNF Asia
Australian Poultry meal, pet food grade	USD 1100/1150 m/t CNF Asia

 

 

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

 

Meat and bone meal, USA, 50 protein	USD  500/520 m/t
Feathermeal  80 protein USA	USD  685/700 m/t
Poultry meal  57 protein, Eastern USA	USD  570/590 m/t

 

USA animal protein exports – 2013 to end February – major destinations – m/t

 

Country	Meat and bone meal Incl: pork and poultry	Feathermeal
Canada	6,400
Chile		9,400
China	4,100
Indonesia	4,900	14,700
Mexico	5,900
Philippines	7,700
Thailand	4,400

 

 

 

SECTION 2 --- FISHMEAL COMMENTS AND PRICES: PERUVIAN

 

The research vessel "Jose Olaya" still has more work to do on the biomass before reporting to the government of Peru in order to help to determine the quota level for the next season.  It is expected that they will present their full report by mid-April.  The trade seems to be expecting a quota level for the season of about 1.5 million m/t of fish, which is about 360,000 m/t of fishmeal.

 

Once again there has not been too much going on in the business in Peru but then there was a long Easter holiday.  Everyone is now back to work but have nothing available to sell as stocks on hand are very, very limited.  It is also reported that prices in Europe for Northern fishmeal are increasing as the demand has all moved there but supplies too are limited.

 

There was quite a long article in the press in Peru on how the governments program for fish stock conservation is having a very bad effect on the fishmeal industry and could lead to major staff layoff and increased unemployment – especially in the south of Peru where next to nothing is being landed against their quota due to fishing limit restrictions.

 

Press reports indicate that the loss in fishmeal export sales could cost the country as much as USD 450 million in 2013.  However, it must be said that there is division within the fishmeal industry with some supporting the government while other oppose.

 

There is a meeting of the fishmeal association in Miami in April and there will certainly be a great many discussions about the Peruvian fishing regulations.  Perhaps the Peruvian fishmeal producers will all agree on a united front to present to the government in order to help maintain the industry in Peru while also protecting the bio-mass.

 

As to prices – up this week as there is little to sell.

     

 

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	2650/2650
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