Hammersmith Marketing Ltd - Grain Trading
WEEKLY FEED GRAIN AND PROTEIN REPORT September 29, 2013
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Comment: this week I attended a conference on "sustainability in agriculture" and one outcome for me (and as I had suspected) everyone has a different idea of exactly what "sustainability" means. During the event , the comment was made that in North America "conservation" is a better term than sustainability. A term that everyone understands and along with that the fact that conservation has been practiced for more than 100 years.
There was also the opinion expressed, by some, that sustainability is little more than a new marketing ploy promoted by retailers and their suppliers to try to differentiate products and to get the consumer excited, even perhaps to push GMO into the background.
It was obvious from the discussions and presentations that "sustainability" is very important to some sectors of the broad agriculture business but of little interest or value to other sectors – at least so far. Ultimately every sector will probably have to be concerned about "sustainability" as it is a much broader and all encompassing term than "fair trade" and GMO have ever been and touches every sector of the Ag business.
However, consumer understanding of and interest in "sustainability" is limited and sustainability as a consumer concept seems almost as boring and obscure as "carbon footprints".
SECTION 1: FEED GRAINS -- VEGETABLE AND ANIMAL PROTEIN
With the USDA Grain Stocks Report coming out on Monday, grain markets seemed to be taking things a little slower this week as no one much wanted to be pushing the market too much with a major report on the way.
I don't normally talk much about sorghum but this week with the expected Chinese demand for sorghum that is above and beyond normal levels then we should not see much in the way of weakness in sorghum prices. Sorghum is not a major export grain for the USA, except to Mexico, with the world, excluding Mexico, taking less than 350,000 m/t per year then expected demand of as much as 1.5 million m/t for China is going to keep USA sorghum prices high and limit export supply.
On the corn side of things this week, all was quite calm and reasonably orderly. The corn harvest is just starting to roll, about two weeks behind, and everyone is waiting for their supply of lower cost new crop corn. Very early yield numbers from some areas of the USA seem to show very good yields so far and already have people saying that last months USDA report may have been too conservative on crop yields – if so this will push prices lower.
It will be very interesting to see the USDA Stocks report on Monday and see if the corn stocks are really as bearish as some experts feel and buyers are lined up to cover their late 2013 needs as soon as corn prices fall lower, as could happen – but nothing is guaranteed. Interestingly, I was just reading a trade report that says the Monday report will be a non-event and should have no effect on the market.
Soybeans/soymeal had a much calmer week this week that the past few week. Soybeans were only up a very little on the week, about USD 2 m/t for beans with soymeal up USD 5 or 6 m/t.
There has been very little soybean harvest as yet – still a tad too early – and the reported yields really don't give any reliable information with some areas up and some down. Soymeal exports now look to be competitive in a number of markets that rarely buy from the US, as South American supply dwindles and their prices move higher. Soymeal exports are expected to remain strong right into 2014 as USA exports will be well priced.
Experts are divided on he effect that the Monday stocks report could have on the market but the general feeling seems to be that the report could push prices higher as the trade expects stocks to be lower.
This is the last week that I will show crop condition as with the harvest season progressing in the USA the actual crop condition changes little.
| USA crop condition Report 2013 Sep 15 | Very poor % | Poor % | Fair % | Good % | Excellent % |
| Corn | 5 | 11 | 29 | 42 | 13 |
| Last year | 27 | 24 | 25 | 21 | 3 |
| | | | | | |
| Soybeans | 5 | 12 | 33 | 41 | 9 |
| Last year | 14 | 20 | 31 | 29 | 6 |
| | | | | | |
| Sorghum | 4 | 11 | 31 | 44 | 10 |
| Last year | 24 | 26 | 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 291/293 Oct/Dec |
| Wheat, USA Hard Red Winter 12 protein | USD 324/326 Oct/Dec |
| Wheat, milling Black Sea 11.5 pro – 30,000+ m/t | USD 250/255 |
| Wheat, soft milling, France, Rouen port | USD 259/262 |
| Wheat, milling, Argentina, upriver | USD 325/330 Dec/Jan new crop |
| Wheat, feed, Black Sea | USD 240/245 |
| Wheat bran, Black Sea | USD 200/205 |
| Barley, France, Rouen port | USD 248/250 |
| Barley, feed, Argentina, upriver | USD 222/230 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 218>>211 Oct>>Dec |
| Corn, FOB USA Pacific northwest | USD 243>>229 Oct>>Dec |
| Corn, FOB Argentina port, upriver | USD 212/214 Oct/Dec |
| Corn, FOB Brazil port | USD 185/187 Oct/Dec |
| Corn, FOB Black Sea – 30,000+ m/t | USD 200>>190 Spot>>Nov/Dec |
| Corn, FOB France | USD 222/229 Oct/Nov |
| Sorghum, FOB Texas, low tannin, GMO free | USD 237/239 Oct/Dec |
| Sorghum, FOB Argentina port, high tannin, GMO free | USD 190/195 Oct/Dec |
| Soymeal, 48 protein, FOB NOLA | USD 535>>515 Oct>>Dec |
| Soymeal, 48 protein, USA, Rotterdam | USD 595>>569 Oct>>Dec |
| Soymeal, Argentina, Rotterdam | USD 578>>565 Spot>>Dec |
| Soymeal, 47 pro, FOB Argentina | USD 515/518 Oct/Dec |
| Soymeal, 48 protein, Brazil, Rotterdam | USD 576/579 Spot/Dec |
| Soymeal, FOB Brazil | USD 510/515 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 195/200 m/t |
| DDGS, 35 profat, USA FOB NOLA | USD 300>>282 m/t Oct>>Dec |
| DDGS, 35 profat, CNF Asia | USD 359>>353 Oct/Nov |
There was a news story out this week that China could increase DDGS imports by 600,000 m/t this year, to a total of about 3 million m/t. While this is not enough of an increase to push market prices higher it is certainly enough to help markets maintain the current export price levels. Prices for all corn by-products continue to show weakness in Oct/Dec as the new crop corn gets into the corn processing and ethanol industries and producers use up all their expensive old crop corn.
The USA corn harvest is a little late in getting going this year so that is keeping new crop supplies out of the hands of processors and holding nearby prices for by-products higher than we had hoped.
According to trade reports in the USA it is very difficult to source any DDGS for Oct/Nov but that there is room in December and most Asian buyers are looking at Dec/Jan for shipment. As mentioned last week the problem for all export buyers for corn by-products is the sudden spurt in freight prices – bulk freight prices are up as much as USD 4 to 6 m/t this week and container prices too are being pushed higher. Increased freight cost look to be adding 3 to 5 percent to the CNF prices for by-products.
Prices should be moving lower over the next few weeks as new crop corn becomes more readily available to processors.
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 bid 370/asked 400 m/t CNF Asia |
| Australian MBM 45 protein Australian MBM 50 protein Australian Feathermeal Australian Poultry meal, pet food grade | USD 545/565 mt CNF Asia USD 600/630 m/t CNF Asia USD 700/720 m/t CNF Asia USD 820/850 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 610/630 m/t CNF Asia USD 740/750 m/t CNF Asia USD 640/660 m/t CNF Asia USD 850/870 m/t CNF Asia |
The following indications are at producer's factory, ex-works in bulk
| Meat and bone meal, USA, 50 protein | USD 480/490 m/t |
| Feathermeal 80 protein USA | USD 640/660 m/t |
| Poultry meal 57 protein, Eastern USA | USD 520/540 m/t |
USA domestic animal protein prices were a little weaker this week, which helped to move export prices a little lower.
Prices into Asia were lower from all origins as demand seems to have fallen off for now, especially in Indonesia, which is a major destination for MBM. One trade report said that prices were lower due to low prices from South America for 45 protein MBM but sellers in South America are saying that they have little business as they cant compete with low European prices --- so who does one believe.
Export demand for animal proteins tends to drop after September, so it is expected that prices should continue to move lower over the next few weeks – probably not a great deal lower but a range between USD 20 to 40 m/t lower, depending on the origin and the destination.
There was an interesting article on the WWW about chickens and animal protein this week --- it seems that while animal protein does not have a large benefit over vegetable protein in poultry diets, the birds actually preferred the feed with animal protein versus vegetable protein. I guess this means that chickens don't want to be vegetarians.
SECTION 2 --- FISHMEAL COMMENTS AND PRICES: PERUVIAN
Nothing new to report on the new fishing quota as the Peruvian government is still playing their cards close to their chest. The Imarpe biomass inspection trips are over and the government is probably mulling over the results so that they can come up with a reasonable fishing quota.
New sales have stayed slow again this week and the prices down at the bottom end of the quality market have slipped a bit lower while prices for the highest quality grades are just a little firmer. As everyone knows, the supply of the higher grades is always less than for the lower grades so it is not difficult to understand that prices for the different grades can go in opposite directions.
The total new season sales remain at about a level of 250,000 m/t or so with not much in new sales booked in the last couple of weeks. However, it is reported in the trade that prices are creeping higher in China so perhaps there will be another surge in Chinese buying. Buyers in Europe seem to be out of the fishmeal market in Peru at present and this is probably due to prices for North Atlantic fishmeal supplies being more cost effective than from Peru – even with Peru's new lower prices.
So here we all still are, waiting to see what Peru will do for the new season quota and guessing which way the prices will go.
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 | 1260/1280 m/t |
| 65/66 pro standard steam | 1280/1300 m/t |
| 67 protein standard steam | 1340/1350 m/t |
| 67 protein SD 150 TVN | 1360/1370 m/t |
| 67 protein SD 120 TVN | 1400/1410 m/t |
| 67 protein SD 1000 hist, 120 TVN | 1410/1420 m/t |
| 68 protein SD 500 hist, 120 TVN | 1430/1440 m/t |
| | |
| Fish oil .. crude bulk | 1900/1950 |
| Fish oil – crude drums | 2100/2150 |
| Fish oil – flexitank | 2050/2100 |
| Fish oil – Omega 3 – 28%EPA/DHA | 2600/2650 |
| | |
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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