Hammersmith Marketing Ltd - Grain Trading
WEEKLY FEED GRAIN AND PROTEIN REPORT July 27, 2013
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SECTION 1: FEED GRAINS -- VEGETABLE AND ANIMAL PROTEIN
The last trading month of old crop corn – September futures – took quite hit this week as prices dropped by about USD 20 m/t while most new crop months were only down by about USD 10 m/t. It is reaching the point now where there is almost no spread between old crop and new crop corn.
Corn prices were down by a little every day this week and most of the price drop was due to the good weather that is seen in much of the corn growing areas of the USA. Pricing experts are saying that if the good weather continues we could see corn price drop another USD 20 m/t for new crop corn. However, there are also some experts who feel that corn will not go much lower and will only be up a little down a little for now until we get some new crop information or a major change in the weather situation. At this moment everything looks perfect for the corn crop for the next 10 days to 2 weeks.
But just to shake things up a little, the Ukraine has sent a container of corn to China for their review, analysis and inspection. China is going to take quite a lot of Ukraine corn this year but had been expected to be a reseller of Ukraine corn into Africa and Middle Eastern markets – perhaps the situation has changed and China will be much more interested in Ukraine corn for use in China.
As to the corn crop quality for next week – no changes expected –at least nothing significant.
Old crop soybeans and soymeal took quite a whack this week and with another week like this we will see the end of the old crop priced just like the new crop. However we do still have a USD 25 m/t premium for old crop soymeal and even a little more for old crop soybeans.
The weather for soybean looks good too but there are some areas where there appears to be a serious lack of rain and this could keep prices from sliding any lower. For now though we look to be having ideal weather in a very large portion of the soybean area and this should stop prices from moving nay higher.
As with corn, the crop quality report for next week should hold no surprises.
| USA crop condition Report 2013 July 13 | Very poor % | Poor % | Fair % | Good % | Excellent % |
| Corn | 3 | 8 | 26 | 46 | 17 |
| Last year | 21 | 24 | 29 | 23 | 3 |
| | | | | | |
| Soybeans | 2 | 6 | 28 | 51 | 13 |
| Last year | 13 | 22 | 34 | 27 | 4 |
| | | | | | |
| Sorghum | 6 | 11 | 38 | 38 | 7 |
| Last year | 15 | 25 | 34 | 20 | 6 |
| | | | | | |
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 268/276 Aug/Oct |
| Wheat, USA Hard Red Winter 12 protein | USD 313>>309 Aug/Oct |
| Wheat, milling Black Sea 11.5 pro – 30,000 m/t | USD 240>>225 new crop |
| Wheat, soft milling, France, Rouen port | USD 250/253 |
| Wheat, milling, Argentina, upriver | USD 262/265 Dec/Jan new crop |
| Wheat, feed, Black Sea | USD 227>>220 new crop |
| Wheat bran, Black Sea | USD 205/210 |
| Barley, France, Rouen port | USD 233/235 |
| Barley, feed, Argentina, upriver | USD 232/245 Dec/Jan new crop |
| Barley, feed, Black Sea | USD 225>>215 new crop |
| Barley, feed, USA Pacific Northwest | USD 275/278 |
| Corn, FOB NOLA USA | USD 257>>231 Aug>>Oct new crop |
| Corn, FOB USA Pacific northwest | USD 306>>250 Aug>>Oct new crop |
| Corn, FOB Argentina port, upriver | USD 225/233 Aug/Sep |
| Corn, FOB Brazil port | USD 182/187 Aug/Sep |
| Corn, FOB Black Sea – 30,000 m/t | USD 245>>210 Aug>>new crop |
| Corn, FOB France | USD 275/298 Aug |
| Sorghum, FOB Texas, low tannin, GMO free | USD 246>>242 Aug>>Sep new crop |
| Sorghum, FOB Argentina port, high tannin, GMO free | USD asked 200/bid 190 Aug/Sep |
| Soymeal, 48 protein, FOB NOLA | USD 560>>482 Aug>>Oct new crop |
| Soymeal, 48 protein, USA, Rotterdam | USD 610>>515 Aug>>Oct new crop |
| Soymeal, Argentina, Rotterdam | USD 590>>482 Spot>>A/S/O |
| Soymeal, 47 pro, FOB Argentina | USD 482>>453 Aug>>Oct/Nov |
| Soymeal, 48 protein, Brazil, Rotterdam | USD 560>>461 Spot>>A/S/O |
| Soymeal, FOB Brazil | USD 471>>430 Aug>>Oct/Nov |
| Soymeal, 48 protein, India FOB | USD 600/620 |
Bulk vessel shipments, minimum 5000 m/t
| Corn Gluten Meal, USA FOB NOLA | USD 685/690 m/t |
| Corn Gluten Feed, USA FOB NOLA | USD 195/200 m/t |
| DDGS, 35 profat, USA FOB NOLA | USD 285/252 m/t Aug>>Oct |
| DDGS, 35 profat, CNF Asian ports | USD 365>>332 m/t Aug>>Oct |
DDGS showed considerable price weakness this week as the new crop corn prices certainly helped to push October DDGS prices much lower. There is very little export demand for any nearby DDGS shipments – except very minimal quantities – as buyers cant see any sense in buying today when tomorrow is USD 30 m/t cheaper. There seems to be a lineup of export buyers for Oct/Dec DDGS shipments but producers are a little hesitant to sell to much out very far just in case they get caught in a rally in corn prices.
Looking at longer term DDGS price indications, the market seems to think that corn prices will stay low and that DDGS will be very reasonably priced into 2014. With USA corn futures prices at just under USD 5 per bushel (USD 196 m/t) it looks like DDGS could be a good low cost alternative for the feed industry.
Corn gluten feed is doing what it always does and is following corn prices lower while corn gluten meal was also lower on the week, mainly due to both corn and soymeal being lower on the week.
As a bit of an aside, there was a very scholarly study published last week that looked at the historical price changes in DDGS versus the price changes in corn and established that there seemed to be a relationship between price changes in corn and price changes in DDGS. I suppose that someone had to pay for a study to actually prove what we all knew.
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 570/580 mt CNF Asia |
| Argentina Meat & Bone meal, 45 protein | USD 530/540 m/t CNF Asia |
| Europe Meat & Bone meal, 45 protein Europe Meat & Bone meal, 50 protein | USD no prices USD no prices |
| Australian MBM 45 protein Australian MBM 50 protein Australian Feathermeal Australian Poultry meal, pet food grade | USD 660/670 mt CNF Asia USD 730/740 m/t CNF Asia USD 730/740 m/t CNF Asia USD 1040/1060 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 750/760 m/t CNF Asia USD 770/790 m/t CNF Asia USD 750/760 m/t CNF Asia USD 1050/1070 m/t CNF Asia |
The following indications are at producer's factory, ex-works in bulk
| Meat and bone meal, USA, 50 protein | USD 530/540 m/t |
| Feathermeal 80 protein USA | USD 670/680 m/t |
| Poultry meal 57 protein, Eastern USA | USD 580/600 m/t |
Animal protein prices for the export market moved a little lower this week, at least from the USA. USA suppliers report good shipment of MBM to Indonesia with CNF prices said to be a little lower than those shown in the table above.
When prices are weak in vegetable protein market buyers of animal protein hold off buying until all the prices even up, so with the ups and downs in vegetable protein in the past couple of week it is very difficult to get a good feel for exactly where all the prices are.
Longer term, most prices should move lower with soymeal but the market doesn't always do exactly what you expect and if fishmeal prices should suddenly move higher it might help to keep animal protein prices up.
SECTION 2 --- FISHMEAL COMMENTS AND PRICES: PERUVIAN
Well, it looks like the full quota for the northern Peru fishing area, 2,050,000 m/t of fish, will be fully landed or close to by the end of July but things are not nearly as good with the 400,000 m/t southern quota as 280,000 m/t remain to be caught and fishing is not exactly setting the world on fire.
Reports from Peru show that the inventories on hand are getting down as decent new business is still in the market. The estimates of unsold stocks is now getting close to only 100,000 m/t, which is very, very little to cover all needs until sometime in Nov/Dec.
The good export demand coupled with the dropping inventories has caused market prices to move about USD 30 m/t higher this week and as/if stocks continue to drop the price should move even higher.
It is also reported that stocks in China appear to have reached a low and that fishmeal prices are moving higher. However, the aquafeed season is coming to an end in China so any additional import demand may not be as high as some exporters would like.
With major fishing coming to an end in Peru for several months it is expected that prices will tend to increase on the assumption that demand will continue and that the low inventory will not be able to meet all needs.
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 |
| | |
| 65 protein standard steam | 1440/1450 m/t |
| 65/66 pro standard steam | 1470/1480 m/t |
| 67 protein standard steam | 1490/1500 m/t |
| 67 protein SD 150 TVN | 1520/1530 m/t |
| 67 protein SD 120 TVN | 1540/1550 m/t |
| 67 protein SD 1000 hist, 120 TVN | 1560/1590 m/t |
| 68 protein SD 500 hist, 120 TVN | 1580/1600 m/t |
| | |
| Fish oil .. crude bulk | 2100/2150 |
| Fish oil – crude drums | 2250/2300 |
| Fish oil – flexitank | 2200/2250 |
| Fish oil – Omega 3 – 28%EPA/DHA | 2700/2900 |
| | |
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
