Hammersmith Marketing Ltd - Grain Trading
WEEKLY FEED GRAIN AND PROTEIN REPORT August 31, 2013
France: Rep. Office: +33.9.7044.4881 Mobile: +33.6.8068.4564 Fax: +33.4.5774.7575
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SECTION 1: FEED GRAINS -- VEGETABLE AND ANIMAL PROTEIN
Overall we had a strong up week for grain and oilseeds – Monday started the week of strongly with hot dry weather causing crop concern and a slide lower in the USDA crop condition – experts feel that the crop condition will drop a little again in next Tuesday's report.
One trade report this weekend has said that there are a great many speculators who are short corn futures who want the market to move lower so that they can make some decent profits but that they are likely to panic and cover their shorts if the market looks to be going higher due to the weather. If a pack of short speculators start to cover that could give corn a good (but probably short-term) pus to higher levels.
Normally, this time of year prices would be drifting lower and reaching their yearly lows in Sep/Oct as the harvest moves along and storage gets filled up. Once the corn gets in the elevator the prices increase each month by the storage and handling costs, so from the end of harvest onwards prices don't normally go lower --- unless the actual harvest is larger than had been expected.
We have a long weekend in the USA with Monday being a holiday and that has made many people be a tad more conservative as no one wants to take any risk over a three day weekend – so the finish of the week on Friday was mainly everyone getting their positions sorted for the holiday.
Soybeans were strong again this week with the old crop running much further ahead, as the tightness in old crop soybeans just keeps getting tighter. Old crop soybeans were up USD 20 m/t and soymeal up Usd 35 m/t while for the new crop soybeans were up USD 10 m/t and soymeal up USD 5 to 7 m/t.
There were some comments in reports this week that, strictly from a technical point of view, the soybean market should now be taking a move to lower price levels, not a sudden drop but a quiet slide to lower prices as we get closer and closer to the harvest but, on the other had some are saying that the hot weather has been very bad for soybeans and that next weeks Crop Report will show a drop of about 5 to 6 percent in the crop condition.
For the next couple of weeks the most important factor for soybeans and meal will be what happens with the weather and if the hot and dry weather continues we could see lower yields and higher prices. One should expect some very exciting up and down days in the next couple of weeks as everyone watches the sun and hopes for a rain cloud or two.
| USA crop condition Report 2013 Aug 26 | Very poor % | Poor % | Fair % | Good % | Excellent % |
| Corn | 4 | 10 | 27 | 44 | 15 |
| Last year | 26 | 26 | 26 | 19 | 3 |
| | | | | | |
| Soybeans | 3 | 10 | 29 | 46 | 12 |
| Last year | 17 | 21 | 32 | 26 | 4 |
| | | | | | |
| Sorghum | 3 | 9 | 32 | 46 | 10 |
| Last year | 23 | 27 | 26 | 18 | 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 269/277 Sep/Nov |
| Wheat, USA Hard Red Winter 12 protein | USD 313/318 Sep/Nov |
| Wheat, milling Black Sea 11.5 pro – 30,000 m/t | USD 235/240 |
| Wheat, soft milling, France, Rouen port | USD 252/254 |
| Wheat, milling, Argentina, upriver | USD 285/295 Dec/Jan new crop |
| Wheat, feed, Black Sea | USD 225/230 |
| Wheat bran, Black Sea | USD 190/200 |
| Barley, France, Rouen port | USD 236/238 |
| Barley, feed, Argentina, upriver | USD 225/240 Dec/Jan new crop |
| Barley, feed, Black Sea | USD 240/245 |
| Barley, feed, USA Pacific Northwest | USD 250/255 |
| Corn, FOB NOLA USA | USD 236>>223 Sep>>Nov |
| Corn, FOB USA Pacific northwest | USD 254>>241 Sep>>Nov |
| Corn, FOB Argentina port, upriver | USD 233/236 Sep/Oct |
| Corn, FOB Brazil port | USD 195>>189 Sep/Oct |
| Corn, FOB Black Sea – 30,000 m/t | USD 205>>190 Sep>>new crop |
| Corn, FOB France | USD 226/234 new crop |
| Sorghum, FOB Texas, low tannin, GMO free | USD 245/247 Sep/Nov |
| Sorghum, FOB Argentina port, high tannin, GMO free | USD asked 207/bid 200 Sep/Oct |
| Soymeal, 48 protein, FOB NOLA | USD 543>>517 Sep>>Oct new crop |
| Soymeal, 48 protein, USA, Rotterdam | USD 584>>557 Sep>>Oct new crop |
| Soymeal, Argentina, Rotterdam | USD 575>>560 Spot>>Oct |
| Soymeal, 47 pro, FOB Argentina | USD 521>>510 Sep>>Oct/Nov |
| Soymeal, 48 protein, Brazil, Rotterdam | USD 572>>543 Spot>>Oct |
| Soymeal, FOB Brazil | USD 510>>500 Sep>>Oct/Nov |
| Soymeal, 48 protein, India FOB | USD 520/530 |
Bulk vessel shipments, minimum 5000 m/t
| Corn Gluten Meal, USA FOB NOLA | USD 660/670 m/t |
| Corn Gluten Feed, USA FOB NOLA | USD 200/205 m/t |
| DDGS, 35 profat, USA FOB NOLA | USD 300>>276 m/t Sep>>Nov |
There is still a very big discount on DDGS for later purchase with November shipment being priced close to USD 25 m/t below current levels and this is all to do with what happens with the new crop. It was reported in the USA that some ethanol producers are having trouble finding any old crop corn for their current production, which is reducing DDGS supply and keeping nearby prices high. As reported last week, export buyers have no interest in prompt shipments and are quite happy to wait for Oct/Nov with the USD 25 m/t discount.
Corn gluten prices seemed to be off a little this week while corn gluten feed moved a little higher but much of this week to week fluctuation is due to the limited amount of price availability, especially for export shipments. With both corn gluten meal and feed the actual price could easily be +/- USD 10 to 20 m/t on the prices listed. We do our best to give good price indications but sometimes, in thinly traded export markets, coming up with an accurate export price ends up just being one's best guess.
Container shipments, minimum 200 m/t
| Argentina Meat & Bone meal, 45 protein | USD 520/530 m/t CNF Asia |
| Australian MBM 45 protein Australian MBM 50 protein Australian Feathermeal Australian Poultry meal, pet food grade | USD 610/620 mt CNF Asia USD 670/680 m/t CNF Asia USD 770/780 m/t CNF Asia USD 890/910 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 660/670 m/t CNF Asia USD 760/770 m/t CNF Asia USD 710/730 m/t CNF Asia USD 880/900 m/t CNF Asia |
The following indications are at producer's factory, ex-works in bulk
| Meat and bone meal, USA, 50 protein | USD 530/550 m/t |
| Feathermeal 80 protein USA | USD 700/710 m/t |
| Poultry meal 57 protein, Eastern USA | USD 560/580 m/t |
It is interesting to note that even though the domestic markets for animal proteins in some major originating countries have been quite strong the CNF prices into the major markets in Asia are trying to move lower. This may be related a little to the very sudden and serious drop in the price for fishmeal into the region while some say that it is more related to very low prices for animal protein coming out of Europe.
There are a few bargains in price out of South America but some of these are for spot shipment due to defaulted contracts, as buyers want the benefit of the lower market prices. Falling prices are a very difficult situation for sellers when buyers refuse to open letters of credit. Buyers don't seem to realize that they will find it difficult to do any future business in a country if the have not honored past business. I still have buyers that I wont deal with who treated me badly 20 years ago – like an elephant I never forget.
The direction of animal protein prices over the next while should be related to what happens to soymeal prices but always with an eye to other proteins like fishmeal and corn gluten meal --- but it does look like we can expect to see some lower price levels coming – unless the USA crop turns into a disaster.
SECTION 2 --- FISHMEAL COMMENTS AND PRICES: PERUVIAN
Well now, an interesting week for the fishmeal situation in Peru – the government seems to feel that the biomass is in great shape for the next fishing season, which is leading everyone to expect a fishing quota at a possibly higher level – perhaps 2.5 million m/t of catch. The immediate reaction was for market prices to drop another USD 50/60 m/t. There is not a huge amount of fishmeal on hand in Peru but producers seem to be willing to take a good look at almost all bids. The remaining stock in Peru is said to be between 30k and 50k m/t and with recent weeks averaging about 10k m/t sales per week then all should be sold out by early October.
There does not seem to be much interest so far in booking any business for the new fishing season but one trade report did mention that there were a couple of buyers sniffing around at price levels about USD 50 m/t below the current prices – but, as I said, no reported sales as yet.
China is the main world market for fishmeal and so far in 2013 their import volume has been down by 30 percent but the exports from Peru to China are down by 63 percent – quite a drop – with Chile and Thailand picking up most of the lost business.
It is going to be very interesting to see what happens as we get closer and closer to the next fishing season as in past years there has always been a big chunk of preseason bookings and perhaps this will happen again this year but the feeling is that anyone buying big will also want to be buying cheap.
One more thing on fishmeal, this time from northern Europe where the merger of Denmark's TripleNine A/S with Norway's Vedde AS has been finalized into a new company that will be known as the TripleNine Group – the group will have operations in Norway, Denmark, Chile, South Africa, Mauritania and China.
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 | 1340/1350 m/t |
| 65/66 pro standard steam | 1360/1370 m/t |
| 67 protein standard steam | 1370/1380 m/t |
| 67 protein SD 150 TVN | 1390/1400 m/t |
| 67 protein SD 120 TVN | 1420/1430 m/t |
| 67 protein SD 1000 hist, 120 TVN | 1440/1450 m/t |
| 68 protein SD 500 hist, 120 TVN | 1450/1460 m/t |
| | |
| Fish oil .. crude bulk | 1900/1950 |
| Fish oil – crude drums | 2050/2100 |
| Fish oil – flexitank | 2000/2050 |
| Fish oil – Omega 3 – 28%EPA/DHA | 2500/2600 |
| | |
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
