Hammersmith Marketing Ltd - Grain Trading
WEEKLY FEED GRAIN AND PROTEIN REPORT April 14, 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
The USDA WASDE report that was published this week did not seem to have too serious an effect on grain and oilseed prices but there are some experts who say that it will take a little longer to analyse the details of the report and we could see more reaction next week. Of course they don't say which way the reaction will be – up or down.
What we did have for corn for the week was prices being just a little bit higher each day: here a dollar, there a dollar, until we ended the week up by almost USD 10 m/t over the previous week.
The first USDA 2013 planting report is due out on Monday and the feeling seems to be that the estimated corn crop planting will be between 3 and 5 percent completed but experts say that further planting could be delayed a little by expected wet weather over the next two weeks. One expert has suggested that the overall corn yield for 2013 will be slightly below average based on very, very, very long-term weather projections. However, this is only April and harvest is a long way away so trusting yield projections at this point would seem to be very risky.
On the soybean/soymeal side of things we also saw price move up on the week with the April/May shipments still at a significant premium to later business but then that is not too surprising since the further we go in the next few weeks the more supply comes available from South America. Trade reports were saying that it was heavy trade in Europe that pushed up soybean/soymeal prices, at least for the nearby shipping positions.
Weather in South America looks good in most of Argentina and Brazil for further soybean harvesting although there are a few rain delays in Brazil but Argentina should be able to chug ahead on the their harvest as weather looks sunny and warm for the next couple of weeks.
As to prices – you can see from the futures where cash prices are expected to go in coming weeks but will prices continue lower. Most experts do seem to feel that there are currently more reasons for lower grain and oilseed prices than there are for higher levels. So, we should see price weakness until there is some bad news on USA plantings or weather or on South American harvest but at this minute there does not seem to be any news that will push prices much higher.
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 287/290 Apr/July |
| Wheat, USA Hard Red Winter 12 protein | USD 326/329 |
| Wheat, milling Black Sea 11.5 pro | USD 290/300 July/August |
| Wheat, soft milling, France, Rouen port | USD 338/340 |
| Wheat, milling, Argentina, upriver | USD 315/325 Apr/May |
| Wheat, feed, Black Sea | USD 290>>265 Apr/Aug |
| Barley, France, Rouen port | USD 299/301 |
| Barley, feed, Argentina, upriver | USD 280/285 Apr/May |
| Barley, feed, Black Sea | USD 300/310 |
| Barley, feed, USA Pacific Northwest | USD 270/280 |
| Corn, FOB NOLA USA | USD 287>>275 Apr>>Jun |
| Corn, FOB Argentina port, upriver | USD 242>>232 Apr/May/Jun |
| Corn, FOB Brazil port | USD 224/229 July/Aug/Sep |
| Corn, FOB Black Sea | USD 280>>265 May>>Aug |
| Corn, FOB France | USD 297/300 |
| Sorghum, Black Sea | USD n/a |
| Sorghum, FOB Texas, low tannin, GMO free | USD 295/298 |
| Sorghum, FOB Argentina port, high tannin, GMO free | USD asked 210/bid 195 Apr/June |
| Soymeal, 48 protein, FOB NOLA | USD 487/490 April |
| Soymeal, 48 protein, USA, Rotterdam | USD 520/525 April |
| Soymeal, Argentina, Rotterdam | USD 530>>445 Spot/>>/J/J/A |
| Soymeal, 47 pro, FOB Argentina | USD 440>>415 Apr/>>/J/J/A |
| Soymeal, 48 protein, Brazil, Rotterdam | USD 475>>440 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 225/230 m/t |
| Corn Gluten Meal, USA FOB NOLA | USD 605/615 m/t |
| DDGS, 35 profat, USA FOB NOLA | USD 289/292 m/t Apr/May |
| DDGS, 35 profat, CNF Asian ports | USD 354/360 m/t |
Corn prices were up on the week but all corn by-products continued lower as they caught up with the drop in prices from last week. Seems that every buyer is looking for lower prices and those that can are waiting as long as possible before committing or are bidding below the market in anticipation of lower prices. DDGS was down quite a bit but this does not seem to be a problem for producers as with the lower corn overall prices the ethanol producers are seeing better margins on production. The general feeling in the trade is that DDGS prices should continue lower and that the current small rally in corn prices is probably just for a day or two.
The situation for corn gluten meal and corn gluten feed is not the same as for DDGS but their prices too dropped lower this week as they caught up with lower corn prices.
The biggest problem that seems to be facing exports of by-products is a developing shortage of containers as, to some markets, container exports of by-products is the least cost alternative.
Looking at CGM, we had several inquiries from Egypt this week but ran into serious supply problems as Egyptian authorities are being very strict about aflatoxin B1 levels of 10 ppb and producers/exporters are just not able to guarantee those levels. However, it must be said that all the shipments we have made recently to Egypt have been analyzed at or below 10PPB for B1 but producers just cannot guarantee that level and buyers are afraid to take the risk.
As to overall prices – in general it looks like the trend will be to follow corn price.
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 520/550 m/t CNF Asia |
| USA Meat & Bone meal, 50 protein | USD 740/770 m/t CNF Asia |
| Australian MBM , 45 protein | USD 700/710 m/t CNF Asia |
| Australian MBM, 50 protein | USD 750/760 m/t CNF Asia |
| Australian Feathermeal | USD 890/900 m/t CNF Asia |
| USA Feathermeal, 80 protein | USD 880/890 m/t CNF Asia |
| USA Poultry Meal, feed grade | USD 730/740 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 480/500 m/t |
| Feathermeal 80 protein USA | USD 685/700 m/t |
| Poultry meal 57 protein, Eastern USA | USD 550/570 m/t |
Animal protein prices are slipping a little lower in the USA domestic market and this is bringing export prices down a little as buyers are looking at the much lower soymeal prices a few weeks out and shying away from buying what looks to be very expensive animal proteins. Feathermeal has not seen the same weakness as yet but it is bound to happen as producers say that they are seeing much lower bids from buyers. The avian flu situation in China and ever changing import bans in Indonesia are having an effect on the export market but more with Australia and New Zealand than with USA exports. Asia demand overall is lower and this is helping to move export prices a little lower but the drop in USA export prices is not as yet as great as the slide in domestic USA prices.
It is expected that the weakness in prices will continue as soymeal and other protein items move lower.
SECTION 2 --- FISHMEAL COMMENTS AND PRICES: PERUVIAN
There has been no official notice of the new fishing quota in Peru as yet but the trade seems to be expecting a quota level of about 1.2 million m/t of fish, which is really not as high as many had hoped. If the quota does end up at 1.2 million m/t then there should be continued high prices for fishmeal from Peru – unless demand drops off badly.
The big question these days, other than the quota, is the bird flu situation in China and the effect that this will have on the fishmeal market. As the largest buyer of fishmeal, what happens in China affects all fishmeal-exporting countries and with the drop in poultry consumption we may see a fall in fishmeal imports that will not be made up by increased aquafeed demand but this will probably take a few more weeks to determine.
It is interesting to follow the adventures of Copeinca, as the company seems to bounce back and forth between Chinese and Norwegian buyers. As I am writing this there seems to be no final word on exactly who will be the majority owner of Copeinca in the future. From the Copeinca point of view it is still business as usual with no change in company direction as a result of the current battle over ownership. Next week should also be interesting as bidders increase their prices for the shares or, perhaps, as other bidders appear.
As to prices, not much expected in the way of price change until there is a fishing quota announcement but at least we all know that it does not seem to likely for prices to fall.
Speaking of prices, I was looking at historical prices as published by the USDA and a table of price comparison is shown below. What it seems to show is that on the basis of yearly averages there appears to be little relationship between soymeal and fishmeal prices – they both seem to just do their own thing.
| | Soymeal USA internal USD/mt | Fishmeal Hamburg USD/mt | Ratio |
| 2001/2 | 180 | 592 | 3.30 |
| 2002/3 | 200 | 598 | 3.00 |
| 2003/4 | 282 | 649 | 2.30 |
| 2004/5 | 202 | 665 | 3.20 |
| 2005/6 | 192 | 1060 | 5.50 |
| 2006/7 | 226 | 1220 | 5.40 |
| 2007/8 | 370 | 1146 | 3.10 |
| 2008/9 | 365 | 1103 | 3.02 |
| 2009/10 | 343 | 1668 | 4.85 |
| 2010/11 | 381 | 1607 | 4.20 |
| 2011/12 | 442 | 1448 | 3.30 |
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 | 2600/2700 |
| 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
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