Weekly report -- July 13, 2013

 

 

Hammersmith Marketing Ltd  - Grain Trading

WEEKLY FEED GRAIN AND PROTEIN REPORT   July 13, 2013

                                                                       

 

France:  Rep. Office: +33.9.7044.4881   Mobile: +33.6.8068.4564    Fax: +33.4.5774.7575

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Email:   tradegroup@hammersmith.biz    WWW:  hammersmithltd.blogspot.com       SKYPE: bacon39a  

 

 

SECTION 1:  FEED GRAINS -- VEGETABLE AND ANIMAL PROTEIN

 

Quite a strong week overall for all grain and protein prices although the rally of the week did turn lower on Friday.  The general opinion on the USDA WASDE report was that there were no big surprises but the fact that there were said to be no surprises certainly did not stop the market prices from being very volatile on Thursday and Friday.

 

Corn prices finished the week almost USD 8 m/t higher on the previous week but with Friday dropping considerable it may be that we will start next week with lower corn prices. China bought a big chunk of USA corn on Friday but that did not seem to get the market excited and with the weather over the next few days looking to be about what the corn crop needs there seemed to be more reason for prices to move lower than higher.  The commodity funds would seem to be in agreement as they are very short corn futures --- it wouldn't take too much to make the funds panic and sell off some of their shorts which could push prices higher, at least in the short term.  Probably a bad weather report would be enough to scare them.  As we all know, we are in the summer months where price volatility is the rule and each day seems to be a new adventure.

 

Looking at the many trade reports that come out on a Friday it seems that the majority are leaning toward prices for new crop corn moving lower in the next few weeks, as long as the weather is good.

 

Even with the July futures contract expired we still see a premium of close to USD 15 m/t for September corn over December corn and it is possible for December corn to move lower.

 

With soybeans the August futures prices are at a USD 25 m/t premium over the December futures but in the cash market the price premium for nearby soybeans is much higher as there is just not enough old crop supply available to meet the demand.  You see the same in the soymeal market where the spot export soymeal price is close to USD 75 m/t higher than the October FOB export price.

 

Looking at the soybeans/soymeal prices last week, the old crop prices fell versus the new crop, as old crop moved lower while new crop pushed higher.

 

If the weather was to change a little and there were increased rains in the dry soybean areas then we would probably see new crop prices moving lower once again and from the looks of the weather update today we should see at least some rain in the driest areas.

 

As with corn the soybean/soymeal prices will be mainly USA weather driven for the next few weeks so, as I always say, keep your eyes on the sky.    

 

 

USA crop condition Report 2013 July 13	Very poor %	Poor %	Fair %	Good %	Excellent %
Corn	2	6	24	51	17
Last year	12	18	30	34	6
Soybeans	2	5	26	55	12
Last year	9	18	33	35	5
Sorghum	5	12	39	38	6
Last year	9	20	39	28	4

 

 

 

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 272/286 July/Oct
Wheat, USA Hard Red Winter 12 protein	USD 316/319 July/Oct
Wheat, milling Black Sea 11.5 pro – 30,000 m/t	USD 240>>230 new crop
Wheat, soft milling, France, Rouen port	USD 257/259
Wheat, milling, Argentina, upriver	USD 260/270 Dec/Jan new crop
Wheat, feed, Black Sea	USD 240>>225 new crop
Wheat bran, Black Sea	USD 210/215
Barley, France, Rouen port	USD 239/241
Barley, feed, Argentina, upriver	USD 230/245 Dec/Jan new crop
Barley, feed, Black Sea	USD 246>>225 new crop
Barley, feed, USA Pacific Northwest	USD 276/280

 

Corn, FOB NOLA USA	USD 296>>229 July>>Oct new crop
Corn, FOB USA Pacific northwest	USD 313>>257 July>>Oct new crop
Corn, FOB Argentina port, upriver	USD  203>>200  July/Aug
Corn, FOB Brazil port	USD  203>>195  July/Aug/Sep
Corn, FOB Black Sea – 30,000 m/t	USD  270>>220  July/new crop
Corn, FOB France	USD  278/304
Sorghum, FOB Texas, low tannin, GMO free	USD  263>>243 Jul>>Sep new crop
Sorghum, FOB Argentina port, high tannin, GMO free	USD  asked 205/bid 195 July/Sep

 

Soymeal,  48 protein, FOB NOLA	USD  575>>466 July>>Oct new crop
Soymeal, 48 protein, USA, Rotterdam	USD  610>>495 July>>Oct new crop
Soymeal, Argentina, Rotterdam	USD  589>>506 Spot>>J/A/S
Soymeal, 47 pro, FOB Argentina	USD  465>>455  Aug/Sep
Soymeal, 48 protein, Brazil, Rotterdam	USD  575>>510 Spot>>J/A/S
Soymeal, FOB Brazil	USD  458>>449  Aug/Sep
Soymeal, 48 protein, India FOB	USD  600/620

 

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   690/700 m/t
DDGS, 35 profat, USA FOB NOLA	USD   300/303 m/t July>>Sep
DDGS, 35 profat, CNF Asian ports	USD   362/368 m/t July>>Sep

 

 

With corn prices up on the week we had all corn by-products following close behind.  DDGS prices were probably the strongest but that may be due to the limited supplies available for the next two or three weeks as most producers seem to be sold out for July shipment.  There are also trade reports that the supplies of DDGS could be tight for August – this due to high old crop corn prices and the producers waiting a little for lower priced new crop corn.

 

According to the trade, buyers are looking for significant price reductions for USA corn by-product shipments for August/September as they see lower corn futures prices but producers wont see much benefit in lower prices before October, so there is a difference of opinion between buyer and seller as to where prices should be for later shipments. 

 

When you consider that there is a USD 75 m/t difference in the price of corn between July and December futures then it is easy to understand why there are some arguments over price.

 

It is expected that the price levels will have to stay at or near current levels until the producers can get the first supplies of new crop corn but then there should be a significant slide in prices.

 

Of course the difficulty will be with corn gluten meal as it tends to follow the protein prices much more closely than the corn prices and, while lower corn prices should help push the price down, strong protein demand could keep the price from falling too much.

 

 

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 665/675 mt CNF Asia USD 745/755 m/t CNF Asia USD 680/690 m/t CNF Asia USD 1050/1080 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 740/760 m/t CNF Asia USD 850/870 m/t CNF Asia USD 750/770 m/t CNF Asia USD 1050/1100  m/t CNF Asia

 

 

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

 

Meat and bone meal, USA, 50 protein	USD  500/530 m/t
Feathermeal  80 protein USA	USD  650/670 m/t
Poultry meal  57 protein, Eastern USA	USD  545/560 m/t

 

 

Animal protein prices in the export markets tended to be steady to higher this week as demand was very good.  USA domestic demand was good and this helped keep prices up --- with soymeal prices being so strong this week it is not surprising that local USA feed producers were looking at every other alternative.  There is also the very tight supply situation on soymeal in the USA, which will keep prices strong until we see some new crop and this will also tend to push more demand to animal proteins and corn by-products.

 

The next couple of weeks will probably be slow in the export market as the USA's biggest market in Indonesia is in the Ramadan month and demand will slip as new orders dry up for a couple of weeks. The export demand for feathermeal remains very strong and this has pushed feathermeal export prices up by USD 10 to 20 m/t.

 

As long as we see continued strength in the soymeal market, there is very little chance that there will be any weakness in animal protein prices --- looking at this week, where nearby soymeal prices were up by close to USD 50 m/t, animal proteins, with only small price increases, became very attractive feed ingredients.  If soymeal prices continue higher then animal proteins should follow along but as demand moves from soymeal to animal proteins they will quickly become less of a bargain versus soymeal.    

   

 

 

SECTION 2 --- FISHMEAL COMMENTS AND PRICES: PERUVIAN

 

Fishmeal prices just keep dropping lower as export business had seemed to have stopped but then, in the last week, there was a spurt of new buying that was probably attracted by the lower prices.  After a few weeks of very limited sales every week there was at least a small spurt in sales with China finally placing some orders and even a little interest from European buyers.

 

According to trade reports from Peru, July shipments are now sold out and the sudden jump in sales volume is filling up the August shipping slots quite quickly.  The trade is also expecting increased buying interest from other markets in Asia now that prices have dropped.

 

Fishing in Peru was not very good as very poor weather had closed ports and made fishing next to impossible but the stock level is still very good with about 190,000 m/t of fishmeal estimated to be on hand.

 

The market is hoping that Chinese buying will continue and , if it does, this should stop the slide in prices and could see prices start to move higher once again – especially as the unsold stock levels start to drop.

 

And then there are the export statistics:  total Peru fishmeal exports down by 70% so far in 2013 with Chile exports up by 7%. Peru's shipments to China dropped by 63%, from 332,000 m/t down to 123,000 m/t, which accounts for most of the total drop. Chile's exports to China were actually up by 49% from 47,000 m/t to 70,000 m/t – this is for the same period in 2012 versus 2013.

 

There was an interesting study published this week on the taste testing of USA trout that had been fed on varying diets containing fishmeal, animal proteins or vegetable proteins.  The taste testers agreed that the samples with fishmeal were the best tasting with the vegetable protein samples rating the lowest.  The vegetable protein fed samples were also found to be much less firm compared to the two other types.  According to one major trout farmer in the USA, he says that the fishmeal content in trout diets will probably drop from the current 20 to 30 percent level down to about 5 percent but he does not see fishmeal every being totally eliminated from the feed formulations. 

 

 

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	1450/1460 m/t
65/66 pro standard steam	1470/1480 m/t
67 protein standard steam	1490/1520 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	1560/1580 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	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