Hammersmith Marketing Ltd - Grain Trading
WEEKLY FEED GRAIN AND PROTEIN REPORT August 03, 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
SECTION 1: FEED GRAINS -- VEGETABLE AND ANIMAL PROTEIN
Other than wheat prices, we had a good down week for everything. New crop corn was down by another USD 5 m/t and with FOB Nola prices get to USD 220 m/t then corn is starting to look like quite a bargain. The weather for corn looks good in most areas of the USA and some forecasters are saying that corn yields could come in even higher than the USDA estimates --- and, as we all know, higher yields means more tons of corn and lower prices.
The question of corn today seems to be how low can the new crop corn prices go before they hit bottom. The commodity investment funds are quite short corn and once they think that a bottom is near, they will cover their short positions and prices will take a jump higher. However, so far there seems to be little reason to say that prices are as low as they can go. Of course, if China was to decide to jump in and buy scads of USA corn then that could change the situation --- so perhaps the weather and China are the two biggest factors in the market and we have much better information on the weather than we do on China.
New crop soybeans and soymeal were down strongly on the week with the old crop soybeans still holding a premium, as is to be expected. Actually the old crop premium widened this week as new crop dropped much more than old crop – new crop is quoted at about a USD 40 m/t discount to old crop and an even greater discount on a FOB Nola basis.
Soybeans saw some rain where it was needed and weather looks quite good for the next two weeks or so – nothing like great growing weather to push prices lower. There does not seem to be much reason to expect higher prices all of a sudden – one would be hard pressed to come up with a good reason. Of course the weather could change or demand take a leap higher – but in the short term neither seem to likely.
So for the moment it looks like lower prices for soybeans and soymeal – at least until something happens to shake the market.
| USA crop condition Report 2013 July 28 | Very poor % | Poor % | Fair % | Good % | Excellent % |
| Corn | 3 | 8 | 26 | 46 | 17 |
| Last year | 23 | 25 | 28 | 21 | 3 |
| | | | | | |
| Soybeans | 2 | 7 | 28 | 50 | 13 |
| Last year | 15 | 22 | 34 | 26 | 3 |
| | | | | | |
| Sorghum | 7 | 12 | 34 | 40 | 7 |
| Last year | 17 | 25 | 32 | 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 274/284 Aug/Oct |
| Wheat, USA Hard Red Winter 12 protein | USD 317/320 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 251/253 |
| Wheat, milling, Argentina, upriver | USD 270/275 Dec/Jan new crop |
| Wheat, feed, Black Sea | USD 220>>215 new crop |
| Wheat bran, Black Sea | USD 205/210 |
| Barley, France, Rouen port | USD 238/240 |
| Barley, feed, Argentina, upriver | USD 232/245 Dec/Jan new crop |
| Barley, feed, Black Sea | USD 220>>215 new crop |
| Barley, feed, USA Pacific Northwest | USD 275/278 |
| Corn, FOB NOLA USA | USD 244>>222 Aug>>Oct new crop |
| Corn, FOB USA Pacific northwest | USD 299>>245 Aug>>Oct new crop |
| Corn, FOB Argentina port, upriver | USD 220/223 Aug/Sep |
| Corn, FOB Brazil port | USD 180/185 Aug/Sep |
| Corn, FOB Black Sea – 30,000 m/t | USD 242>>220 Aug>>new crop |
| Corn, FOB France | USD 273/293 Aug |
| Sorghum, FOB Texas, low tannin, GMO free | USD 242>>237 Aug>>Sep new crop |
| Sorghum, FOB Argentina port, high tannin, GMO free | USD asked 195/bid 180 Aug/Sep |
| Soymeal, 48 protein, FOB NOLA | USD 553>>490 Aug>>Oct new crop |
| Soymeal, 48 protein, USA, Rotterdam | USD 590>>535 Aug>>Oct new crop |
| Soymeal, Argentina, Rotterdam | USD 565>>478 Spot>>A/S/O |
| Soymeal, 47 pro, FOB Argentina | USD 460>>440 Aug>>Oct/Nov |
| Soymeal, 48 protein, Brazil, Rotterdam | USD 547>>458 Spot>>A/S/O |
| Soymeal, FOB Brazil | USD 443>>425 Aug>>Oct/Nov |
| Soymeal, 48 protein, India FOB | USD no prices |
Bulk vessel shipments, minimum 5000 m/t
| Corn Gluten Meal, USA FOB NOLA | USD 675/680 m/t Aug |
| Corn Gluten Feed, USA FOB NOLA | USD 190/195 m/t Aug |
| DDGS, 35 profat, USA FOB NOLA | USD 272/245 m/t Aug>>Oct |
| DDGS, 35 profat, CNF Asian ports | USD 370>>333 m/t Aug>>Oct |
The new crop corn reaction has hit corn by-products and, as can be seen by the prices above, DDGS prices based on new crop corn are much lower than today's old crop prices. The same will be seen in corn gluten meal and corn gluten feed but it is tough to get a price from producers out a couple of months. Corn gluten feed prices may not drop too much lower but there is probably some room for corn gluten meal to go lower and DDGS feels very weak.
On the DDGS side there are no low prices for August and early September shipment as they are still be priced against old crop corn but from LH September on things get very interesting.
According to the export trade in DDGS and CGM there is quite a bit of interest for Oct/Dec export business but little if any at the current price levels. Buyers see spot prices as very high in comparison to a few weeks out. Most buyers would prefer to wait for the cheaper shipment period – makes sense to me.
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 didn't change at all this week but this is certainly not going to last as the drop in soymeal prices now means that meat and bone meal is not at all a good buy against soymeal. Over the next couple of weeks, assuming continued weakness in soymeal, we are going to have to see a good move lower for animal protein prices both in the domestic USA market and for export. Buyers, except perhaps pet food people, are just not going to pay a premium for meat and bone meal and such.
The word in the USA is that animal protein demand has come to a sudden halt as buyers work down existing supplies and wait for the market prices to fall. The export market is more difficult due to the long delivery times but buyers are only looking at small quantities just to cover current need and are buying nothing long-term.
We have had a couple of Vietnam buyers bidding us this week for South American MBM but their bids are about USD 100 m/t below current market levels. Who knows, perhaps we will get there but certainly not this week.
SECTION 2 --- FISHMEAL COMMENTS AND PRICES: PERUVIAN
For the first time in a few weeks there was no change in fishmeal prices in Peru this week – of course there were a couple of days of holidays in Peru so that could have slowed things down a little. There is little or nothing left on the main quota and once the official figures are in it looks like there may be a very slight under-quota amount perhaps 50,000 m/t or so of fish uncaught. Not all that bad really when you consider that things didn't look too good only a week or two ago.
According to trade reports the stocks of fishmeal available in Peru are just over 100,000 m/t and experts feel that this may be about exactly what will be needed to meet the demand until the next fishing season in Nov/Dec.
With the holidays in Peru the sales side of things has been quiet and most market experts don't see much new business coming from China for now --- the feeling seems to be that European buyers will show more interest in Peru in coming week.
As to the available supply and what will happen to prices – there seems to be very little lower quality fishmeal available as most of that was sold early to China, so buyers are going to have to pay up for higher grades and this should help to keep prices fairly firm in coming weeks. With the stocks on hand needing cover Aug/Nov business that works out to only about 25,000 m/t per month which is really not a great deal of supply if there is any bulge in demand.
What I am saying is that higher prices do look to be more likely than lower prices at present – and as supply gets smaller prices will certainly get higher.
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
This week's report is dedicated to my younger brother Paul who died on Aug 2nd in Toronto after a very short illness. He was never in the grain business but read my grain report faithfully every week, as he said, just to see what I was doing.
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
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