Hammersmith Marketing Ltd - Grain Trading
WEEKLY FEED GRAIN AND PROTEIN REPORT September 14, 2013
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SECTION 1: FEED GRAINS -- VEGETABLE AND ANIMAL PROTEIN
The USDA WASDE report was only a small surprise to the market on Thursday but should still set the US price trend over the next few weeks, barring any serious weather problems.
Corn came out a tad bearish in the WASDE report with the yield and production numbers both up from the last report and from the average trade estimates but the 2013/14 ending stocks only changed a little due mainly to a change in the estimate of 2012/13 ending stocks.
Price activity after the report seemed to show that no one knew exactly what the report meant so there was little change in the prices with the week ending with corn prices down by about USD 4 m/t, most of which happened after the report. Some experts seem to feel that there is some room for corn prices to move lower but that the downside risk is limited and that for now it may be that prices will trade in a +/- USD 10 m/t trading range until something exciting happens to push the market but it looks like most of the pushing would be to higher levels, as there doesn't seem to be too many reasons at present for the market to move lower.
Reading a number of weekend reports and contrary to what I said above, the feeling among other experts seems to be that corn prices could drop to new lows in the short term. Guess that we need to just wait and see.
The WASDE report was bullish for soybeans with lower yields and lower ending stocks and a drop of just over 3 percent in the soybean production estimates. With the current 2013/14 ending stocks estimates showing tight supply there could be good reason to expect higher prices into 2014 and perhaps more panic buying of futures in 2013.
New crop soybeans were up about USD 5 m/t on the week but actually ended the week with a lower price on Friday due mainly to reports of expected larger soybean production in South America in 2014.
Prices for USA soybeans and soymeal look more inclined to go higher than lower in the long run and there are reports coming out in the next couple of weeks that the experts will analyse very closely to judge the effect on prices and production levels. At least one report this weekend has said that new crop soybean prices look to be too high and may have trouble going any higher in the short term but then you can always get experts on both sides of the price argument – some for up and some for down.
| USA crop condition Report 2013 Sep 08 | Very poor % | Poor % | Fair % | Good % | Excellent % |
| Corn | 5 | 12 | 29 | 41 | 13 |
| Last year | 26 | 26 | 26 | 19 | 3 |
| | | | | | |
| Soybeans | 4 | 12 | 32 | 42 | 10 |
| Last year | 15 | 21 | 32 | 27 | 54 |
| | | | | | |
| Sorghum | 4 | 11 | 31 | 45 | 9 |
| Last year | 25 | 26 | 25 | 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 262/267 Sep/Nov |
| Wheat, USA Hard Red Winter 12 protein | USD 309/312 Sep/Nov |
| Wheat, milling Black Sea 11.5 pro – 30,000+ m/t | USD 240/250 |
| Wheat, soft milling, France, Rouen port | USD 251/253 |
| Wheat, milling, Argentina, upriver | USD 295/310 Dec/Jan new crop |
| Wheat, feed, Black Sea | USD 228/232 |
| Wheat bran, Black Sea | USD 190/200 |
| Barley, France, Rouen port | USD 242/245 |
| Barley, feed, Argentina, upriver | USD 225/238 Dec/Jan new crop |
| Barley, feed, Black Sea – 30,000+ | USD 235/240 |
| Barley, feed, USA Pacific Northwest | USD 240/245 |
| Corn, FOB NOLA USA | USD 226>>214 Sep>>Nov |
| Corn, FOB USA Pacific northwest | USD 247>>230 Sep>>Nov |
| Corn, FOB Argentina port, upriver | USD 218/223 Sep/Nov |
| Corn, FOB Brazil port | USD 185/190 Sep/Nov |
| Corn, FOB Black Sea – 30,000+ m/t | USD 200>>191 Sep>>new crop |
| Corn, FOB France | USD 226/228 Sep/Oct/Nov |
| Sorghum, FOB Texas, low tannin, GMO free | USD 235/237 Sep/Nov |
| Sorghum, FOB Argentina port, high tannin, GMO free | USD asked 195/bid 185 Oct/Nov/Dec |
| Soymeal, 48 protein, FOB NOLA | USD 555>>541 Sep>>Oct/Nov |
| Soymeal, 48 protein, USA, Rotterdam | USD 610>>595 Sep>>Oct/Nov |
| Soymeal, Argentina, Rotterdam | USD 590>>570 Spot>>Oct/Nov |
| Soymeal, 47 pro, FOB Argentina | USD 535>>526 Sep>>Oct/Nov |
| Soymeal, 48 protein, Brazil, Rotterdam | USD 595>>558 Spot>>Oct/Nov |
| Soymeal, FOB Brazil | USD 528>>523 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 695/710 m/t |
| Corn Gluten Feed, USA FOB NOLA | USD 205/210 m/t |
| DDGS, 35 profat, USA FOB NOLA | USD 280>>270 m/t Sep>>Nov |
| DDGS, 35 profat, CNF Asia | USD 360>>348 Oct/Nov |
The old crop premium is slowly working its way out of DDGS prices as we get closer and closer to a supply of new crop corn but export business has been a little slow as buyers wait to see how low prices can actually go. Perhaps we will see a sudden burst of buying now that the USDA WASDE report is out of the way and corn prices don't look to be going to move higher.
There was a conference recently in Canada where an interesting paper was presented on the use of low-oil DDGS in cattle feed – this paper will be available shortly on the USGC WWW site, www.grains.org. Everyone is certainly interested in how best use low-oil DDGS, especially in export markets where the higher oil product is preferred but they are going to have to adjust to low-oil.
With vegetable protein prices moving higher, we see that corn gluten meal prices are following them up, as would be expected. Export business for CGM has slipped a little in the past couple of months probably because buyers found the price a little too high versus other protein alternative but also due to a drop in business to Egypt, which had been a very good destination for CGM exports.
Corn gluten feed prices were also up this week, even with corn prices moving lower but it is expected that the price will drop again in the coming week, especially if corn prices stay weak. International prices for wheat bran are quite reasonable at present and this has eaten into the demand for CGM to some market, especially in the Mediterranean where there is currently a ready supply of Black Sea wheat bran.
Speaking of the Mediterranean, the US Grains Council stated this week that a combo shipment of DDGS and corn gluten feed had arrived from the USA in Algeria – the first ever purchase of these two items.
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 580/600 mt CNF Asia USD 640/650 m/t CNF Asia USD 750/760 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 650/670 m/t CNF Asia USD 760/770 m/t CNF Asia USD 680/700 m/t CNF Asia USD 870/900 m/t CNF Asia |
The following indications are at producer's factory, ex-works in bulk
| Meat and bone meal, USA, 50 protein | USD 510/530 m/t |
| Feathermeal 80 protein USA | USD 690/710 m/t |
| Poultry meal 57 protein, Eastern USA | USD 560/580 m/t |
USA domestic animal protein prices slipped a little lower this week, even when vegetable proteins were moving higher. It seems to be simply a supply situation where the animal protein supplies have built up and buyers have to be convinced to buy.
Both USA export prices and international prices were lower on the week, again, a function of good supply against not so great demand. This should be a good time for buyers in Asia to take a look at USA supplies, especially of poultry meal and feathermeal.
We had a number of South American animal protein producers contact us this week looking for business in Asia but, unfortunately, their FOB origin price ideas were higher than what most Asian buyers are paying CNF. Looks like, as in the USA, stocks in some South American countries are growing and producers are looking to other markets.
A couple of people commented to me this week that the animal protein prices are not always accurate and my response to them was that it is very difficult to determine accurate market prices for several countries for products that are thinly traded with little available published price information and traders who don't want to volunteer price indications. Sometimes the prices that I show are just my best guess at where things are.
SECTION 2 --- FISHMEAL COMMENTS AND PRICES: PERUVIAN
There is a great deal of speculation in Peru (and elsewhere) about where the next fishing quota level will be set. The majority of people seem to favour a quota of 2.5 million m/t while a minority is looking for 2.0 million m/t. So based on feelings only it looks like 2.5 million m/t will be the quota winner – I don't think that anyone in the Peruvian government reads this newsletter so they wont be affected by the speculative results.
Business for the new season seems to be quite good as the trade reports that there are now orders in hand for in excess of 200,000 m/t of fishmeal and this number will certainly increase before we see any new fishmeal. Of course, a quota of 2.5 million m/t will produce just under 600,000 m/t of fishmeal so that, after current orders, there will still be close to 400,000 m/t of fishmeal to sell. We know that it all will be sold but perhaps the quantity is enough to keep prices from moving higher in coming weeks.
The guys at MSI Ceres mentioned this week that the major producers in Peru have sold much of their early new season production and that availability may not be until January 2014 shipment - this fact could certainly push prices up a little if buyers are in need of earlier supply.
As to prices, most new business was done without publishing any prices so difficult to get a good handle on exactly where prices are today but it does look that the prices below are at least a decent indication.
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
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