Hammersmith Marketing Ltd - Grain Trading
WEEKLY FEED GRAIN AND PROTEIN REPORT September 21, 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
Soybeans and soymeal had a much more exciting week this week than corn. Corn prices just kind of wandered around much of the week with some up and downs and then ending up with prices lower by about USD 3 m/t on the week. Probably, had soybeans not been so week on Friday we would have seen corn prices up a little on the week.
Experts say that one of the problems with corn at present is that it is just not competitive in most export markets and that if it wasn't for the demand from ethanol producers we would be seeing much lower corn prices. As can be seen by the price table below, USA corn does not currently work very well in export markets that can be served by Brazil or the Black Sea but this is no surprise as this situation has existed now for at least a couple of years. The complication this year is that the EU is not going to take nearly as much Ukraine corn, in a year when the Ukraine has a great crop, so Ukraine corn is going to be looking for a home in markets much further afield and will certainly give USA corn a hard time in markets that the USA used to dominate in corn.
Almost everyone agrees that corn prices will be moving lower, even with the odd bit of bullish news from the USDA – there is just going to be too much corn and too little demand to allow prices to move higher and it is probably getting to late for any major weather event to destroy the corn crop. So, here we are looking for corn prices that should move lower in coming weeks.
On the soybean side of things, many experts are saying that the market got too excited about soybean crop problems and that as a result many of those people who bought soybeans in cash, options and futures are now wondering if they made the right decision.
The situation with the soybean crop is largely unknown at present but early yields in some areas have been good and the late rains probably helped the final yields but again, prices probably got pushed too high by enthusiastic buying and we could see continued weakness in prices.
There is still a little time before we see a full blown soybean harvest so prices will probably be quite volatile until some decent harvest numbers are seen. Harvest yield rumours will push the market up and down each day until something actual is known.
| USA crop condition Report 2013 Sep 15 | Very poor % | Poor % | Fair % | Good % | Excellent % |
| Corn | 6 | 12 | 29 | 40 | 13 |
| Last year | 25 | 25 | 26 | 21 | 3 |
| | | | | | |
| Soybeans | 5 | 13 | 32 | 41 | 9 |
| Last year | 15 | 21 | 31 | 28 | 5 |
| | | | | | |
| Sorghum | 4 | 11 | 31 | 44 | 10 |
| 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 240/246 |
| Wheat, soft milling, France, Rouen port | USD 254/257 |
| Wheat, milling, Argentina, upriver | USD 305/310 Dec/Jan new crop |
| Wheat, feed, Black Sea | USD 228/233 |
| Wheat bran, Black Sea | USD 200/205 |
| Barley, France, Rouen port | USD 241/244 |
| Barley, feed, Argentina, upriver | USD 225/238 Dec/Jan new crop |
| Barley, feed, Black Sea – 30,000+ | USD 240/243 |
| Barley, feed, USA Pacific Northwest | USD 240/245 |
| Corn, FOB NOLA USA | USD 220>>208 Oct>>Dec |
| Corn, FOB USA Pacific northwest | USD 246>>227 Oct>>Dec |
| Corn, FOB Argentina port, upriver | USD 209/216 Oct/Dec |
| Corn, FOB Brazil port | USD 183/187 Oct/Dec |
| Corn, FOB Black Sea – 30,000+ m/t | USD 235>>195 Spot>>Oct/Dec |
| Corn, FOB France | USD 221/228 Oct/Nov |
| Sorghum, FOB Texas, low tannin, GMO free | USD 235/237 Oct/Dec |
| Sorghum, FOB Argentina port, high tannin, GMO free | USD asked 193/bid 187 Oct/Nov/Dec |
| Soymeal, 48 protein, FOB NOLA | USD 520>>509 Sep>>Oct/Dec |
| Soymeal, 48 protein, USA, Rotterdam | USD 590>>572 Oct>>Dec |
| Soymeal, Argentina, Rotterdam | USD 580>>570 Spot>>Dec |
| Soymeal, 47 pro, FOB Argentina | USD 502>>497 Oct>>Dec |
| Soymeal, 48 protein, Brazil, Rotterdam | USD 580>>570 Spot>>Dec |
| Soymeal, FOB Brazil | USD 497>>490 Oct>>Dec |
| Soymeal, 48 protein, India FOB | USD 530/535 |
Bulk vessel shipments, minimum 5000 m/t
| Corn Gluten Meal, USA FOB NOLA | USD 680/685 m/t |
| Corn Gluten Feed, USA FOB NOLA | USD 202/205 m/t |
| DDGS, 35 profat, USA FOB NOLA | USD 290>>286 m/t Oct>>Dec |
| DDGS, 35 profat, CNF Asia | USD 370>>357 Oct/Nov |
According to trade reports this week, there has been very strong buying demand from Asia for DDGS as buyers from China are trying to cover their needs while other Asian markets are also in as buyers now that new crop DDGS looks quite inexpensive. Of course, inexpensive was last week as this week the demand has pushed up USA FOB prices and the rally in the freight market is pushing CNF price higher – especially for those buyer who are looking at container shipments, as container freight seems to have taken a good jump higher.
The trade feels that the export demand for DDGS will be very good for the balance of 2013 as prices are very competitive against corn and soymeal. On the ethanol side of the DDGS equation, the producer's margins are currently very good on ethanol which should guarantee a steady supply of DDGS – ethanol margins are currently more than double the level seen one year ago.
Corn gluten meal and corn gluten feed both moved lower this week following the effect of lower corn and for CGM lower protein prices. As long as soymeal keeps moving lower we will see some weakness in CGM prices and this week it looks like all protein sources were moving lower.
Corn gluten feed does as usual and follows corn prices a little lower.
Container shipments, minimum 200 m/t
| Argentina Meat & Bone meal, 45 protein | USD 520/530 m/t CNF Asia |
| Paraguay Meat &Bone meal, 45 protein | USD 400/420 m/t CNF Asia |
| Australian MBM 45 protein Australian MBM 50 protein Australian Feathermeal Australian Poultry meal, pet food grade | USD 560/600 mt CNF Asia USD 620/650 m/t CNF Asia USD 720/740 m/t CNF Asia USD 850/870 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 640/660 m/t CNF Asia USD 760/770 m/t CNF Asia USD 670/690 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 490/500 m/t |
| Feathermeal 80 protein USA | USD 660/680 m/t |
| Poultry meal 57 protein, Eastern USA | USD 540/560 m/t |
USA domestic prices for animal proteins are lower for all types this week as the weakness in vegetable protein seems to have caught up with the market but on the export side of things there has been no weakness so far in USA prices. However, CNF prices in Asia, the main market for animal protein these days, are quite a bit weaker with most prices down by as much as Usd 20 m/t although some trade reports do say that feathermeal prices are higher to Asia.
Australia and New Zealand export prices are reported to be lower on the week. One trade report mentioned that there were sales done at a much lower price level but that some of this was panic selling for orders where the l/c was not opened.
According to at least one trade report, there is quite an increase in interest in DDGS as a replacement for higher cost animal and vegetable proteins. Also, in a week where soymeal drops by about USD 30 m/t it is difficult to get buyers committing to any new purchases as they all expect prices to move much lower.
We have heard from Paraguay that their export supplies are building due to a lack of interest from Asia, as Paraguay is not competitive with European proteins at present. Paraguay exporters are said to be looking closely at almost any firm bid.
It has also been heard from a couple of suppliers that Vietnam buyers are back to opening letters of credit once again, so perhaps the banking situation in Vietnam has improved.
As to price trends, it looks like MBM prices could be headed lower and there does appear to be weakness in poultry meal but with feathermeal it is more difficult to know if prices will drop.
SECTION 2 --- FISHMEAL COMMENTS AND PRICES: PERUVIAN
Depending on whom it is you are listening to in Peru there seems to be a very wide variation in current market prices for the next fishing season. The prices shown below are about the best indications that were in the market but some traders were saying that business has been done to China at levels about USd 50 m/t below those shown but this is difficult to verify. Interestingly enough other traders say that prices have jumped higher due to good demand from China and current producer prices are USD 50 to 80 m/t above what is shown. For buyers then the only solution is to discuss prices with your suppliers and ignore all the various price rumours.
Stocks in Peru are as close to zero as you can get with little or nothing now available before the next fishing season. New season business has slowed a little but the quantity booked looks to be getting close to the 250,000 m/t level.
With China being the major market for Peruvian fishmeal, anything that happens in China is important and some traders feel that stocks of fishmeal will be building quickly in China due to their purchase levels and it is hoped the consumption will be enough to keep stocks at manageable levels. Overall this should not be too much of a problem as the next major shipments to China will not be until very, very late 2013 or early 2014.
The Peruvian government's two exploratory vessels are out chugging along, trying to determine the size of the biomass so that the government can decide where to set the quota – as reported last week, the best guess seems still to be for a quota of 2.5 million m/t.
And as to prices, probably quite up and down until the actual quota is announced and that will set the
Price direction for the next few weeks.
Just for info, prices in Europe are: 64 protein Peru USD 1,400 m/t, 65 protein Chile USD 1,480 m/t, 72 protein EU USD 1,750, 70 protein EU USD 1,660 m/t.
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 | 1310/1320 m/t |
| 65/66 pro standard steam | 1330/1340 m/t |
| 67 protein standard steam | 1340/1350 m/t |
| 67 protein SD 150 TVN | 1360/1370 m/t |
| 67 protein SD 120 TVN | 1390/1400 m/t |
| 67 protein SD 1000 hist, 120 TVN | 1410/1420 m/t |
| 68 protein SD 500 hist, 120 TVN | 1420/1430 m/t |
| | |
| Fish oil .. crude bulk | 1850/1900 |
| 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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