Weekly report -- July 20, 2013

 

 

Hammersmith Marketing Ltd  - Grain Trading

WEEKLY FEED GRAIN AND PROTEIN REPORT   July 20, 2013

                                                                       

 

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

 

UK:   Rep. Office    +44.131.208.0308    Mobile: +44.7762.640.270

Suite 143, 196 Rose Street, Edinburgh EH2 4AT, Scotland, United Kingdom.

 

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

 

 

For the last couple of weeks I had had some colored highlighting in the tables but this has been removed for this week as some readers let me know that the coloring was causing them problems with reading the report.  So here we are, back to a colorless but still always interesting report.

 

SECTION 1:  FEED GRAINS -- VEGETABLE AND ANIMAL PROTEIN

 

Everyone seemed to be talking about the weather this week with the corn market moving higher or lower depending on the comments of the weather expert of the day. There was some concern for corn early in the week when the crop condition report showed a slight drop overall corn condition but this bullish reaction was short lived as the weakness in the market prices outweighed any crop concern. However with in about 65% of the corn crop in good condition there seems to be little reason for much worry about the crop at present.

 

If anything, the weather for the next 10 days or so looks to be even better for the corn crop, so all those wee corn plants (actually not so wee now) will be happily reaching for the sun. However, even with all looking quite good there are some comments that the USDA crop yield estimate may be just a little too high and that the overall yield estimate could perhaps come down by about 5% -- but it is very early days so far on actual yields.

 

As I said last week, watch the skies and check the weather because that is going to determine the corn price over the next few weeks --- this week all looks great so a price rally would be very difficult.

 

Old crop soybean and soymeal prices continue to be very strong and should remain that way for a few weeks --- loading delays in Brazil are still very long, some as much as 60 days, and soybean demand has moved to wherever soybeans can be sourced which will keep prices very strong until the next USA crop arrives and the supply situation changes. Of course they will get caught up in Brazil but every week we expect improvements in the delays but it just does not seem to be happening.

 

Not much that can be done about old crop prices and new crop prices are, like corn, going to be mainly weather driven – that is unless Chine suddenly decides to buy half the USA crop.

 

Today, again as like corn, the weather for the next 10 days or so looks just great so it is most likely that new crop soybean/soymeal prices will have some trouble rallying and should slide lower while old crop prices can just run higher as demand continues, since there is a finite supply of old crop beans.   

 

 

 

USA crop condition Report 2013 July 13	Very poor %	Poor %	Fair %	Good %	Excellent %
Corn	3	6	25	49	17
Last year	16	22	31	27	4
Soybeans	2	6	27	52	13
Last year	10	20	36	30	4
Sorghum	6	12	38	39	5
Last year	11	21	38	26	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 274/283 July/Oct
Wheat, USA Hard Red Winter 12 protein	USD 316/318 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 256/258
Wheat, milling, Argentina, upriver	USD 262/268 Dec/Jan new crop
Wheat, feed, Black Sea	USD 227>>220 new crop
Wheat bran, Black Sea	USD 210/215
Barley, France, Rouen port	USD 237/239
Barley, feed, Argentina, upriver	USD 232/245 Dec/Jan new crop
Barley, feed, Black Sea	USD 225>>218 new crop
Barley, feed, USA Pacific Northwest	USD 275/278

 

Corn, FOB NOLA USA	USD 294>>228 July>>Oct new crop
Corn, FOB USA Pacific northwest	USD 326>>260 July>>Oct new crop
Corn, FOB Argentina port, upriver	USD  237/240  Aug/Sep
Corn, FOB Brazil port	USD  200>>192  Aug>>Sep
Corn, FOB Black Sea – 30,000 m/t	USD  245>>220  July/new crop
Corn, FOB France	USD  277/305
Sorghum, FOB Texas, low tannin, GMO free	USD  260>>252 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  630!!!>>475 July>>Oct new crop
Soymeal, 48 protein, USA, Rotterdam	USD  660!!!>>510 July>>Oct new crop
Soymeal, Argentina, Rotterdam	USD  610>>530 Spot>>J/A/S
Soymeal, 47 pro, FOB Argentina	USD  499>>454  Aug>>Oct/Nov
Soymeal, 48 protein, Brazil, Rotterdam	USD  605>>510 Spot>>J/A/S
Soymeal, FOB Brazil	USD  485>>450  Aug>>Oct/Nov
Soymeal, 48 protein, India FOB	USD  600/620

 

Bulk vessel shipments, minimum 5000 m/t

 

Corn Gluten Feed,  USA FOB NOLA	USD   205/210 m/t
Corn Gluten Meal,  USA FOB NOLA	USD   700/705 m/t
DDGS, 35 profat, USA FOB NOLA	USD   298/272 m/t July>>Oct
DDGS, 35 profat, CNF Asian ports	USD   365>>342 m/t July>>Oct

 

October DDGS prices are starting to seriously show the effect of the much lower new crop corn prices, with October offered at USD 25 to 30 m/t under the spot price today.  Of course with current corn prices being about USD 40 m/t higher than September prices it is not too surprising that we would see some price weakness in both DDGS and corn gluten feed.  So far there has been little weakness in corn gluten meal prices but this is mainly due to the strength in old crop soybeans and soymeal, which is keeping protein price high. However, with October/November soymeal prices running at close to USD 100 m/t below current spot prices then there should be room for the CGM to slide lower too in coming weeks.

 

In the export market it is said that most major buyers are staying out of the market at present or are just buying smaller lots to cover immediate needs while waiting until they can book much lower prices for October or later shipment.

 

With the weather the way that it is and the positive crop ideas on corn then, at least for today, it looks like we can expect lower corn by-product prices in the weeks to come --- especially after the early corn harvest gets rolling.

 

Container shipments, minimum 200 m/t

 

Paraguay Meat & Bone meal, 45 protein Paraguay Meat & Bone meal 48/50 protein	USD 540/550 m/t CNF Asia USD 580/590 mt CNF Asia
Argentina Meat & Bone meal, 45 protein	USD 570/580 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 680/690 mt CNF Asia USD 750/760 m/t CNF Asia USD 730/740 m/t CNF Asia USD 1060/1090 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 760/780 m/t CNF Asia USD 870/890 m/t CNF Asia USD 770/790 m/t CNF Asia USD 1070/1100  m/t CNF Asia

 

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

 

Meat and bone meal, USA, 50 protein	USD  520/540 m/t
Feathermeal  80 protein USA	USD  660/670 m/t
Poultry meal  57 protein, Eastern USA	USD  580/600 m/t

 

Animal protein prices for July/August shipment were quite strong this week as they followed the direction being set by soymeal prices for the old crop.  Domestic USA animal protein prices are still quite attractive versus other proteins while in the export market we have seen price move higher. As long as we continue to have strong prices for vegetable proteins then there is little reason for MBM, etc to move lower.  However, as can be seen by the price table above, we are going to see a drop in soymeal prices as soon as the new USA crop arrives and this is going to pt quite a bit of downward pressure on animal protein prices, as vegetable protein will become much less expensive.  While we are looking for a drop in vegetable protein prices from the inflated July levels by as much as USD 100 m/t, we will not see a similar drop in animal protein prices.  Currently it is vegetable protein prices that are too high while animal protein is not too expensive so we will see vegetable protein prices drop much quicker than animal protein and the current spread in prices, soymeal over MBM, get much closer together.  

 

 

SECTION 2 --- FISHMEAL COMMENTS AND PRICES: PERUVIAN

 

The northern Peru fishing quota still has ten days or so to run and is down to just over 100,000 m/t left to catch, so it looks like the quota will all be filled or at least close to being filled.  Things in the south are not nearly as good where the 400,000 m/t quota up to the end of August still has 80 percent left to catch.

 

According to reports from the trade in Peru, the sales volume has picked up considerably in the past couple of week with estimated sales last week being very good, some say as high as 60,000 + m/t sold in the week --- this just shows you want can happen when prices get to what is seen to be an attractive level.

 

Of course, as the sales pick up and the fishing season comes to an end, the available stock of fishmeal gets smaller very quickly.  From a high of in excess of 200,000 m/t on hand, a couple of weeks ago, the estimates now have stock levels down to just over 140,000 m/t (some say 100,000 m/t)

.

Reports from China say that the sales of fishmeal have cleaned out the excess stocks in China and that prices are starting to firm up a little – this could mean additional import demand for Peruvian fishmeal in coming days.

 

And then there are the prices, still lower again this week but with the increased demand it could very well be that we have seen the bottom in prices for this fishing season.

 

 

 

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	1410/1420 m/t
65/66 pro standard steam	1440/1450 m/t
67 protein standard steam	1460/1470 m/t
67 protein SD 150  TVN	1490/1500 m/t
67 protein SD 120 TVN	1510/1520 m/t
67 protein SD 1000 hist, 120 TVN	1530/1540 m/t
68 protein SD 500 hist, 120 TVN	1550/1580 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