Hammersmith Marketing Ltd - Grain Trading
WEEKLY FEED GRAIN AND PROTEIN REPORT June 29, 2013
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Email: tradegroup@hammersmith.biz WWW: hammersmithltd.blogspot.com SKYPE: bacon39a
SECTION 1: FEED GRAINS -- VEGETABLE AND ANIMAL PROTEIN
It is interesting to see that the two reports from the USDA last week had one bearish and one bullish. There is nothing like a good tussle in the market until everyone figures out which report is the most important and should be setting the trend for prices. As it was the futures market closed on Friday with the old crop prices for corn and soymeal moving higher while the new crop price slipped lower – not actually too much of a surprise. These days it seems that the stocks numbers have a much larger effect on prices than has been seen in years past --- especially in a time when current stocks are tight. But then we didn't really need a USDA report to tell us that stocks are tight but at least now we know how tight they are.
Looking at corn, the USDA report had higher planted acres than expected which, with a good crop yield, will give a very good 2013 corn crop and, as we saw, certainly helped to push corn futures prices lower on Friday. Some experts are saying that the new crop corn prices could quite easily drop another USD 20 m/t in coming weeks and even lower if the crop and the weather remain good. Normally you see the low price of the year on corn in September or perhaps late August after that prices tend to move a little higher as people start to think about the cost of storing and handling new crop grain.
One expert this week said that will good weather and a decent yield we could seen new crop corn USD 90 to 100 m/t below the current July prices --- it does need to be remembered that the July old crop prices are currently very high due to the tight supply.
Soybean prices were also affected by the USDA report, as stocks levels were lower than expected which caused old crop prices to take a good jump higher while good weather and expected great new crop pushed prices lower after September. The planting of soybeans is probably all but finished and early reports on the crop are certainly as good as any average year.
Most experts feel that prices for soybeans and meal will continue strong for July and August but that the new crop is going to see prices slide lower if the growing weather continues good, as is currently expected.
But then, as with every year, there could always be a change in the weather and an interesting rally in corn, soybean and soymeal prices --- actually, it is not a "could" it is a "will" since there are normally several weather related price rallies every summer.
| USA crop condition Report 2013 | Very poor % | Poor % | Fair % | Good % | Excellent % |
| Corn | 2 | 6 | 27 | 51 | 14 |
| Last year | 4 | 10 | 30 | 45 | 11 |
| | | | | | |
| Soybeans | 2 | 5 | 28 | 54 | 11 |
| Last year | 4 | 11 | 32 | 45 | 8 |
| | | | | | |
| Sorghum | 5 | 8 | 33 | 48 | 6 |
| Last year | 4 | 11 | 41 | 39 | 5 |
| | | | | | |
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 258/270 Jun/Oct |
| Wheat, USA Hard Red Winter 12 protein | USD 298/311 Jun/Oct |
| Wheat, milling Black Sea 11.5 pro – 30,000 m/t | USD 280>>250 July/Sep |
| Wheat, soft milling, France, Rouen port | USD 257/259 |
| Wheat, milling, Argentina, upriver | USD 263/270 Dec/Jan new crop |
| Wheat, feed, Black Sea | USD 255>>240 July>>Sep |
| Wheat bran, Black Sea | USD 210/215 |
| Barley, France, Rouen port | USD 242/245 |
| Barley, feed, Argentina, upriver | USD 215/230 Dec/Jan new crop |
| Barley, feed, Black Sea | USD 248>>242 July>>Sep new crop |
| Barley, feed, USA Pacific Northwest | USD 270/275 |
| Corn, FOB NOLA USA | USD 303>>229 July>>Oct new crop |
| Corn, FOB USA Pacific northwest | USD 330>>256 July>>Oct new crop |
| Corn, FOB Argentina port, upriver | USD 257>>235 July/Aug |
| Corn, FOB Brazil port | USD 210>>204 July/Aug/Sep |
| Corn, FOB Black Sea – 30,000 m/t | USD 268>>235 June>>Sep |
| Corn, FOB France | USD 287/308 |
| Sorghum, FOB Texas, low tannin, GMO free | USD 281>>240 Jul>>Sep new crop |
| Sorghum, FOB Argentina port, high tannin, GMO free | USD asked 215/bid 205 July/Sep |
| Soymeal, 48 protein, FOB NOLA | USD 594!!!!>>465 July>>Oct new crop |
| Soymeal, 48 protein, USA, Rotterdam | USD 625!!!!>>510 July>>Oct new crop |
| Soymeal, Argentina, Rotterdam | USD 540>>495 Spot>>J/A/S |
| Soymeal, 47 pro, FOB Argentina | USD 507>>454 J/A/S |
| Soymeal, 48 protein, Brazil, Rotterdam | USD 552>>475 Spot>>J/A/S |
| Soymeal, FOB Brazil | USD 498>>445 J/A/S |
| Soymeal, 48 protein, India FOB | USD 610/620 |
Bulk vessel shipments, minimum 5000 m/t
| Corn Gluten Feed, USA FOB NOLA | USD 210/215 m/t |
| Corn Gluten Meal, USA FOB NOLA | USD 700/710 m/t |
| DDGS, 35 profat, USA FOB NOLA | USD 288>>285 m/t July>>Sep |
| DDGS, 35 profat, CNF Asian ports | USD 371>>366 m/t July>>Sep |
With most corn by-products, the nearby prices have moved higher while the more distant prices slide lower – this is all a result of the cost of old crop corn versus new crop and with old crop corn selling at a USD 50 m/t premium to new crop there is bound to be some spread in by-product prices.
One trade report was saying that the high price of old crop corn could reduce the production of ethanol which will limit the DDGS supply and could push prices up in the near term. For corn gluten feed it is still a case that CGF follows the corn prices quite closely so CGF for September on is quite weak. Corn gluten meal is another story as the nearby prices are very strong due to the comparison with strong soymeal prices but there does not seem to be much, if any, weakness in CGM prices going out a couple of months. Perhaps weakness will show up as we get by the current tightness in corn supply.
Trade reports this week say that there was very good buying interest for DDGS from Asia and that some business was done to China, Vietnam and South Korea.
After reporting last week on CGF in Turkey that had to be re-exported, I was advised from Turkey that there was another 6,000 m/t rejected due to GMO but that this had all been sold to a buyer in Israel – I expect that there will continue to be these GMO problem lots in Turkey until either the Government changes their GMO requirements or suppliers stop shipping.
Container shipments, minimum 200 m/t
| Paraguay Meat & Bone meal, 45 protein Paraguay Meat & Bone meal 48/50 protein | USD 530/540 m/t CNF Asia USD 560/570 mt CNF Asia |
| Argentina Meat & Bone meal, 45 protein | USD 550/560 m/t CNF Asia |
| Europe Meat & Bone meal, 45 protein Europe Meat & Bone meal, 50 protein | USD 530/540 m/t CNF Asia USD 570/580 m/t CNF Asia |
| Australian MBM 45 protein Australian MBM 50 protein Australian Feathermeal Australian Poultry meal, pet food grade | USD 650/660 mt CNF Asia USD 730/740 m/t CNF Asia USD 680/690 m/t CNF Asia USD 1030/1070 m/t CNF Asia |
| USA Meat & Bone meal, 50 protein USA Feathermeal, 80 protein USA Poultry Meal, feed grade USA Poultry Meal, pet food grade | USD 750/770 m/t CNF Asia USD 830/850 m/t CNF Asia USD 700/720 m/t CNF Asia USD 1040/1070 m/t CNF Asia |
The following indications are at producer's factory, ex-works in bulk
| Meat and bone meal, USA, 50 protein | USD 495/510 m/t |
| Feathermeal 80 protein USA | USD 630/650 m/t |
| Poultry meal 57 protein, Eastern USA | USD 510/550 m/t |
Animal protein prices mover higher across the board this week as the rally in nearby soymeal prices tend to push price higher – at least for quick shipments. As we have seen in both soybeans and soymeal, the prices for July to August are higher due to shortages then fall of as soon as there is some new crop. Animal protein prices will also be affected as demand s very good at present but will slide a little once the new crop soymeal is available at lower prices.
However, in the export market, the chance that Indonesia trade in MBM will be one once again has had some upward effect on USA MBM prices as everyone looks to new export volume. Of course, with soymeal and fishmeal dropping lower it is hard to imagine MBM being able to move much higher.
There was quite a bit of interest from Vietnam this week but buyers were even lower in their price ideas than in recent weeks – everyone seemed to want to pay USD 60 to 70 mt below current market prices. The rumour in the market was that Polish exporters were selling well below other origins in the Vietnam market -- buyers were saying that USD 460/470 m/t was possible from Poland.
SECTION 2 --- FISHMEAL COMMENTS AND PRICES: PERUVIAN
Fishing in Peru has slowed down a little due to bad weather in some areas and limited fishing bans in others. We now have about 250,000 mt of fish left to catch with a daily average that is now at the 25 to 30,000 mt level – so looks like another 10 days or so needed but we don't have that much time left in the quota period. It could be that we will end up not getting the entire quota landed before the end of the month, which would be quite a shame, as, with the reduced quota, every ton of fish is very important.
However, there is still no big buying rush for fishmeal and the prices do seem to be sliding lower as more major sellers are accepting lower bids. Buyers in China seem to have no reason to stock up at present as their market consumption is much lower than expected due mainly to a late aqua season and very bad local weather in China. Fishmeal supplies are said to be growing in Chinese warehouses as shipments arrive but demand is very low.
This year has been a very interesting year so far with greatly reduced fishing quotas that everyone expected would push prices much higher but then to see a large drop in demand from China at the same time which has certainly reversed any upward trend on prices. However, I was reading a report from Chile this week that said that fishmeal prices should be up by about 20 percent on average in 2013 over the prices in 2012 --- I suppose that this could be true but only after we see China and Germany back in the fishmeal market in a big way.
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 | 1560/1580 m/t |
| 65/66 pro standard steam | 1600/1620 m/t |
| 67 protein standard steam | 1650/1670 m/t |
| 67 protein SD 150 TVN | 1690/1710 m/t |
| 67 protein SD 120 TVN | 1720/1730 m/t |
| 67 protein SD 1000 hist, 120 TVN | 1730/1750 m/t |
| 68 protein SD 500 hist, 120 TVN | 1750/1770 m/t |
| | |
| Fish oil .. crude bulk | 2200/2250 |
| Fish oil – crude drums | 2350/2400 |
| Fish oil – flexitank | 2300/2350 |
| 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
