Weekly report May 11, 2013

 

 

Hammersmith Marketing Ltd  - Grain Trading

WEEKLY FEED GRAIN AND PROTEIN REPORT   May 11, 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 report that was issued on Friday was certainly seen as a bearish report by most everyone in the grain market, so that most every commodity had a down day – especially for the new crop prices from the USA.

 

I don't know that there were really too many surprises in the USDA report as many of the important numbers seemed to be quite close to what the trade had been saying for a couple of days.

 

Looking at USA corn, while the report may have been bearish it was not able to reflect all of the possible effect on the crop by the late planting in the USA.  I say possible because planting can catch up very quickly and yields may not be affected.  However the weatherman is not being too co-operative and there looks to be another period of planting delaying rain coming up --- what we really need is a couple of weeks of good old sunshine to give the farmers a chance to get the corn in the ground. Crop experts feel that the crop report on Monday will have the plantings at a maximum of 35 percent versus the more normal level of 68 percent.

 

Trade reports are saying that if the weather improves and the plantings catch up then we could see corn price drop by as much as USD 30 m/t in with the new crop.

 

Old crop soybeans remain very firm compared to the new crop – this due to current shortages, which will be replaced by large crops now from Argentina and Brazil and then later from the USA. The USDA report was bearish for soybeans to as it showed increased carryout stocks in 2014 – but then 2014 is a long way away.  However, for now the best info that we have is from the USDA and it is bearish.

 

Of course you have to also consider that with only 4 percent of the soybean crop planted and 2014 a long way off, the USDA report could be totally wrong – but they rarely are.

 

Next week should be a very interesting week as the market continues to digest the USDA information along with the USA planting situation --- could be quite a volatile week for prices coming up.

    

   

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 284/288 May/July
Wheat, USA Hard Red Winter 12 protein	USD 331/338
Wheat, milling Black Sea 11.5 pro	USD 275/280 July/August
Wheat, soft milling, France, Rouen port	USD 327/329
Wheat, milling, Argentina, upriver	USD 315/325 May/June
Wheat, feed, Black Sea	USD 275>>260 May>>Aug
Barley, France, Rouen port	USD 275/277
Barley, feed, Argentina, upriver	USD 250/265 Dec 2013
Barley, feed, Black Sea	USD 300>>265 May>>Aug
Barley, feed, USA Pacific Northwest	USD 273/278

 

 

Corn, FOB NOLA USA	USD  311>>282 May>>July
Corn, FOB Argentina port, upriver	USD  255>>249  May/July
Corn, FOB Brazil port	USD  245>>228  July/Aug/Sep
Corn, FOB Black Sea	USD  275>>265 May>>Aug
Corn, FOB France	USD  287/290
Sorghum, Black Sea	USD  n/a
Sorghum, FOB Texas, low tannin, GMO free	USD  305>>288
Sorghum, FOB Argentina port, high tannin, GMO free	USD  asked 220/bid 205 May/July

 

 

Soymeal,  48 protein, FOB NOLA	USD  533>>492 May>July
Soymeal, 48 protein, USA, Rotterdam	USD  561>>520 May>July
Soymeal, Argentina, Rotterdam	USD  553>>465 Spot>>/J/J/A
Soymeal, 47 pro, FOB Argentina	USD  487>>430  May>>/J/J/A
Soymeal, 48 protein, Brazil, Rotterdam	USD  534>>455 Spot>>/J/J/A
Soymeal, FOB Brazil	USD  450>>426  May>>J/J/A
Soymeal, 48 protein, India FOB	USD  650/660

 

 

Bulk vessel shipments, minimum 5000 m/t

 

Corn Gluten Feed,  USA FOB NOLA	USD   215/220 m/t
Corn Gluten Meal,  USA FOB NOLA	USD   590/600 m/t
DDGS, 35 profat, USA FOB NOLA	USD   285>>281 m/t May/June
DDGS, 35 profat, CNF Asian ports	USD   350/358 m/t

 

 

With the USDA report coming out on Friday it is difficult to now exactly where the prices are for corn by-products at the end of the week.  However, it certainly looks like the report is bearish and that prices will move lower in coming days.   The weakness in corn and the longer term outlook for corn supply and demand, both USA and world, would certainly seem to trend prices to lower levels once we get fully into South American crop and past the current tightness in old crop supply.

 

Trade reports from the USA had said that export sales were very low last week as buyers were waiting to see what happened with price after the USDA report and I expect that this lack of new business will continue for a few days until the market prices have adjusted to the new trend, which certainly looks to be to lower price levels.

 

Domestic business for DDGS in the USA has been quite good due to DDGS pricing well against corn and soymeal – especially as soymeal prices have been moving higher quickly.  But with the expected change in direction of soymeal and corn prices we could see USA demand for DDGS weakening a little unless DDGS prices follow others lower.

 

 

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 530/540 m/t CNF Asia
Europe Meat & Bone meal, 45 protein	USD no prices
USA Meat & Bone meal, 50 protein	USD 720/740 m/t CNF Asia
Australian MBM , 45 protein	USD 670/675 m/t CNF Asia
Australian MBM, 50 protein	USD 720/740 m/t CNF Asia
Australian Feathermeal	USD 800/820 m/t CNF Asia
USA Feathermeal, 80 protein	USD 810/830 m/t CNF Asia
USA Poultry Meal, feed grade	USD 700/720 m/t CNF Asia
USA Poultry Meal, pet food grade	USD 1050/1080 m/t CNF Asia
Australian Poultry meal, pet food grade	USD 1100/1120 m/t CNF Asia

 

 

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

 

Meat and bone meal, USA, 50 protein	USD  440/460 m/t
Feathermeal  80 protein USA	USD  630/650 m/t
Poultry meal  57 protein, Eastern USA	USD  520/530 m/t

 

Animal protein prices in the USA were all down a little this week due, as was discussed last week, to very good supply and not quite as good demand. However, we will have to see what happens to soymeal and corn gluten meal prices next week to know where animal protein prices are going to go but it does look like we could be sliding lower in the near term.  The USDA report that cam out on Friday has not as yet been fully digested so it is bound to affect protein meal prices more next week.

 

Reports out of Asia say that CNF prices from Australia are higher for most proteins with New Zealand prices remaining steady to a tad lower and no change seen in USA CNF prices. However, with USA domestic prices sliding a little lower there should be a little weakness in export prices too.

 

Not much that can be said about South American price as, except for feathermeal, there is really not a great deal of animal protein available for export and in some markets, like Argentina, it is much too expensive for export and domestic demand seems able to consume everything.

 

We do see the odd lot of Paraguay MBM but quantities are very limited and seem to sell to Vietnam buyers in an instant. 

  

 

SECTION 2 --- FISHMEAL COMMENTS AND PRICES: PERUVIAN

 

Another week and everyone will be out fishing in Peru --- hopefully with very good early results. So far all seems quite good with the fish population both for now and the near future as there seems to be little risk this year of any El Nino event.

 

Actual business remains very slow as buyers are certainly not rushing into the market – the longer it goes without and new business the more it looks like buyers are waiting for significant price weakness before they will book any fishmeal. Of course with the very high fishmeal stock situation in China and the slow Chinese feed demand at present then there is certainly not much reason for Chinese buyers to be rushing to market and, as we all know, with current shipments to China being over 65 percent of Peru's fishmeal exports then what China does has great market effect.

 

As we have seen for quite a few years now, every feed producer in the world is looking for alternative protein ingredients to what they see as high priced fishmeal.  While there are many protein alternatives there are few, if any, that can match the amino acid levels of fishmeal – certainly not any vegetable protein.  So, it was interesting to read an article this week on the use of sesame seed cake in fishfeed formulations in Africa. While the study did not cover any broad range of farmed fish types it did throw up some interesting numbers.  The study concluded that fishmeal can be replaced in fishfeed formulations up to about 67 percent without an adverse effect on fish growth and survival and that a formula where 50 percent of fishmeal was replaced with sesame seed meal showed a very significant cost saving per ton.

The research is in an early stage and needs to be greatly expanded to other types of fish but still it does show that there are many other alternatives to fishmeal in the aquafeed industry.

 

As to prices and things – no business at present, so no new prices – we will see what happens when the new fishing season starts but the feeling today is that there could be some weakness in fishmeal 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	1650/1700 m/t
65/66 pro standard steam	1800/1830 m/t
67 protein standard steam	1850/1870 m/t
67 protein SD 150  TVN	1910/1960 m/t
67 protein SD 120 TVN	1950/2000 m/t
67 protein SD 1000 hist, 120 TVN	2000/2050 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