Weekly report - Aug 10, 2013

 

 

Hammersmith Marketing Ltd  - Grain Trading

WEEKLY FEED GRAIN AND PROTEIN REPORT   August 10, 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

 

  The corn market was just sneaking a little lower this week – a couple of dollars here and a couple of dollars there but pretty well a little bit lower priced every day last week. Overall, last week could be said to be a slow week and this was due to the next USDA acreage and production report that is due out on Monday – a report that everyone seems to expect to be bearish.  Of course, if the report is not quite as bearish as the market expects then we could see a short, sharp rally in corn prices.  But most experts are certainly expecting a bearish report and feel that corn prices could be headed lower.

 

The general feeling is that the USDA will increase the expected corn yield level but there is a very wide range of "expert" opinions on what the yields will be.

 

Then of course we also have very good crop condition reports for corn and a 10/15 day weather forecast that looks close to perfect --- certainly no obvious reason this week for corn prices to move higher.     

 

Soybeans and soymeal were actually up a little on the week with old crop beans moving up by about Usd 4 m/t while new crop beans and meal were quite steady on the week. The week closed with prices for both beans and meal sliding lower on Friday but then with the USDA report due on Monday no one much wanted to be on what they think is the wrong side of the market.

 

Things are still very tight for the old crop as supplies are still very limited but with farmers sitting on some old crop soybeans it makes one wonder when they will actually sell their stocks.  Needless to say the farmers want to maximize their price on the old crop but one of these days the old crop premium of about USD 45 m/t is going to collapse and farmers could be left with much lower profits than anticipated --- it is all about timing.

 

There is talk that the USDA report next week could lower the soybean yield levels but most experts are saying that even if they do lower the numbers they are probably wrong.  So, the question then is, if no one believes these reports why do we all get so excited about them --- guess that it is just the factor of unknown projections that get us all worked up.

 

At the end of the week it looks much like lower prices should be in the cards for soymeal, soybeans and corn.

 

USA crop condition Report 2013 Aug 05	Very poor %	Poor %	Fair %	Good %	Excellent %
Corn	3	8	25	46	18
Last year	25	25	27	20	3
Soybeans	2	7	27	51	13
Last year	16	23	32	25	4
Sorghum	7	11	35	41	6
Last year	19	26	30	19	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 264/275 Aug/Nov
Wheat, USA Hard Red Winter 12 protein	USD 313/318 Aug/Nov
Wheat, milling Black Sea 11.5 pro – 30,000 m/t	USD 250/255
Wheat, soft milling, France, Rouen port	USD 248/250
Wheat, milling, Argentina, upriver	USD 275/280 Dec/Jan new crop
Wheat, feed, Black Sea	USD 225/230
Wheat bran, Black Sea	USD 200/210
Barley, France, Rouen port	USD 236/238
Barley, feed, Argentina, upriver	USD 230/240 Dec/Jan new crop
Barley, feed, Black Sea	USD no price
Barley, feed, USA Pacific Northwest	USD 260/265

 

Corn, FOB NOLA USA	USD 231>>213 Aug>>Oct new crop
Corn, FOB USA Pacific northwest	USD 283>>229 Aug>>Oct new crop
Corn, FOB Argentina port, upriver	USD  216/220  Aug/Sep
Corn, FOB Brazil port	USD  182/188  Aug/Sep
Corn, FOB Black Sea – 30,000 m/t	USD  195/210  Sep>>new crop
Corn, FOB France	USD  224/227 new crop
Sorghum, FOB Texas, low tannin, GMO free	USD  241>>233 Aug>>Oct new crop
Sorghum, FOB Argentina port, high tannin, GMO free	USD  asked 190/bid 178 Sep/Oct

 

Soymeal,  48 protein, FOB NOLA	USD  507>>450 Aug>>Oct new crop
Soymeal, 48 protein, USA, Rotterdam	USD  549>>485 Aug>>Oct new crop
Soymeal, Argentina, Rotterdam	USD  545>>477 Spot>>A/S/O
Soymeal, 47 pro, FOB Argentina	USD  454>>435  Aug>>Oct/Nov
Soymeal, 48 protein, Brazil, Rotterdam	USD  548>>454 Spot>>A/S/O
Soymeal, FOB Brazil	USD  446>>429  Aug>>Oct/Nov
Soymeal, 48 protein, India FOB	USD  530/550

 

Bulk vessel shipments, minimum 5000 m/t

 

Corn Gluten Meal,  USA FOB NOLA	USD   660/670 m/t  Aug
Corn Gluten Feed,  USA FOB NOLA	USD   182/185 m/t  Aug
DDGS, 35 profat, USA FOB NOLA	USD   268/240 m/t Aug>>Oct
DDGS, 35 profat, CNF Asian ports	USD   370>>335 m/t Aug>>Oct

 

There seemed to be quite a bit of volatility in DDGS prices this week as some sellers were quoting higher prices while others were quoting a little lower.  Needless to say, with the new crop prices much below the current prices, most buyers are just covering short-term needs and waiting to buy more long-term.  However, it is reported that some sellers are now quite aggressive on their export prices for Sep/Oct/Nov shipment, so buyer may not have to wait too long to get a much better prices.

 

Corn gluten meal prices slipped a little lower this week, still following corn lower while trying to keep the price as steady as possible. CGM sellers are in much the same position as animal protein sellers as they will be facing quit a drop in soymeal prices in coming weeks and this could push CGM prices quite bit lower.  But with CGM it is always hard to know for sure, as it does have the habit of doing something totally different to what one would think the prices should do. 

 

And then there is corn gluten feed --- just moving the way that corn prices are going – just a little lower this week

 

USA exports of soymeal and corn by-products – Jan/June 2013 – major importers – in m/t

 

Country	Distillers Dried Grains -- DDGS	Corn Gluten Feed	Corn Gluten Meal	Soybean Meal
Total All	3,961,200	484,500	533,100	4,092,900
Canada	264,100		29,000	427,800
Chile			57,300
China	1,257,122
Colombia	45,200		27,000	225,400
Cuba				93,200
Denmark				193,500
Dominican Rep.				135,300
Ecuador				189,000
Egypt	69,700	14,300	75,400	223,800
Guatemala				123,500
Indonesia	118,800	14,200	132,500
Ireland	125,700	167,200
Israel	61,200	55,000	20,100
Italy				121,000
Japan	196,100		21,500
Malaysia			36,900
Mexico	612,900		39,700	291,500
Morocco	57,200	22,200		156,700
Poland				199,500
Portugal		20,500
South Korea	191,100
Spain		22,000
Taiwan	117,900		17,200
Thailand	142,000		16,400
Turkey	196,600	110,200		227,200
Venezuela				352,700
Vietnam	210,400		15,400	126,200

 

 

Container shipments, minimum 200 m/t

 

Paraguay Meat & Bone meal, 45 protein Paraguay Meat & Bone meal 48/50 protein	USD 500/510 m/t CNF Asia USD not available
Argentina Meat & Bone meal, 45 protein	USD 520/530 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 630/640 mt CNF Asia USD 700/715 m/t CNF Asia USD 790/800 m/t CNF Asia USD 950/960 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 740/750 m/t CNF Asia USD 760/780 m/t CNF Asia USD 750/760 m/t CNF Asia USD 930/940  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

 

As has been expected, the new crop soymeal effect is now hitting animal protein prices in the USA and export prices for Asia.  Prices in Asia are down by about USD 20 m/t this week as buyers are just not going to pay high prices when protein seems to be moving lower everywhere.  Of course we did see the end of Ramadan this week, so volume of business to Indonesia is off a little with most offices now closed for three or four days.

 

Domestic prices in the USA are being pushed lower to as feed producers are comparing slipping vegetable protein with what had been steady animal protein prices and have moved their orders to vegetable proteins.

 

It looks like we are going to have to see some further downward adjustment in animal protein prices just to stay reasonably competitive with soymeal and to some degree DDGS.

 

If you look at the soymeal futures prices, you can see that the August prices are still at a USD 60 m/t premium to October prices, which certainly tells you where prices will be going in coming weeks.  

 

So, buyers should probably wait a little to buy and allow the MBM, etc prices to follow soymeal lower.

 

 

USA exports of animal protein – Jan/June 2013 – Major importers – in m/t

 

Country	Meat and bone meal Includes pork and Poultry meal	Feathermeal
Total USA exports	118,500	95,100
Indonesia	18,100	58,300
Mexico	15,800
Canada	21,500	2,500
Philippines	17,600
China	12,900
Thailand	8,300
Chile		27,900
Vietnam		4,100

 

 

SECTION 2 --- FISHMEAL COMMENTS AND PRICES: PERUVIAN

 

According to the trade in Peru the export market has suddenly become very quiet as major buyers seem to have reasonable stocks on hand or already on order. Stocks on hand in Peru have not changed from last week as the low sales just offset the low production from southern fishing leaving stocks up around 110,000 m/t (some say stocks are only at 70,000 m/t).

 

Lots of talk now about where the next Peru fishing quota will be set with most experts seeming to favour 2 million m/t catch but with some saying that a quota of 2.5 million m/t is possible. As was pointed out by MSI Ceres in their weekly report this week – even with a quota of 2.0 million m/t there will be lots of fishmeal available as Nov/Dec/Jan is always a slow sales season for fishmeal.  

 

It has also been apparent in the past couple of years that major buyers, like China, are doing their best to spread their fishmeal business around so that they are not locked into one market only. This new practice means that even with lower quotas in Peru the effect on the world fishmeal business is much less than it was when Peru was the main world fishmeal supplier.

 

I suppose that once we get a new quota, probably in October, and if demand stays soft, then there could be some weakness in fishmeal prices but one can never really count on lower prices.

 

As you can see by looking at the price table below, there has been no change at all in prices in Peru for the week.

 

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