Hammersmith Marketing Ltd - Grain Trading
WEEKLY FEED GRAIN AND PROTEIN REPORT October 05, 2013
France: Rep. Office: +33.9.7044.4881 Mobile: +33.6.8068.4564 Fax: +33.4.5774.7575
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SECTION 1: FEED GRAINS -- VEGETABLE AND ANIMAL PROTEIN
Corn prices were down just a little on the week in the USA, about USD 4 m/t, which were probably pushed by the somewhat bearish USDA report last Monday. Experts on the corn business are saying that they do not feel that prices can go much lower as they are getting very close to the farmers cost of production and at this level farmers would rather sit on their corn than sell at a loss. Of course this talk about what the farmer is doing is really a lot of hooey, as 99.9 percent of the farmers are probably fully hedged on their 2013 crop and at least a little hedged on their 2014 crop. I met a farmer a few weeks ago who was telling me that his 2013 has been fully hedged for several months and that his 2014 is at least 50% hedged along with just over 20% of his 2015 crop. So, it appears that it is not the farmer fighting over prices these days but mainly the buyers/end users and the players.
Looking at the USA corn situation, there are some areas with delayed harvests but experts feel that if there was a reports on Monday (which there will not be) then the corn harvest should be up to 22% completed – as we have seen in past years, the harvest can catch up in the blink of an eye.
As to prices, probably not too much lower but one never knows – normally from October the prices do tend to move up as harvested grain cost money to store and finance and this needs to be reflected in the market price.
Soybean prices were down by close to USD 10 m/t this week as bearish news was everywhere in the market. Although the week did finish with an up-tick as the chance of weather delays to the harvest made the market a little anxious.
There was a report in the trade late in the week that 500,000 m/t of US soymeal had been sold to Europe – not too surprising, as US soymeal is now competitive with South America and should stay that way until about March of 2014.
A couple of private forecast services are looking for higher production and yields than the last USDA crop report so it is going to be tough for soybeans to show much strength if the crop size just keeps getting bigger.
The major factor for now in soybeans, and corn too, is the results of harvest yield reports so that the experts can then tell us exactly where the crop yields are going to be an dhow many tons we will have to move.
| USA Crop Sep 29 Percentage harvested | 2013 | 2012 | 5 year Average |
| Corn | 12% | 52% | 23% |
| | | | |
| Soybeans | 11% | 29% | 20% |
| | | | |
| Sorghum | 36% | 38% | 35% |
| | | | |
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 293/295 Oct/Dec |
| Wheat, USA Hard Red Winter 12 protein | USD 329/331 Oct/Dec |
| Wheat, milling Black Sea 11.5 pro – 30,000+ m/t | USD 247/255 |
| Wheat, soft milling, France, Rouen port | USD 267/269 |
| Wheat, milling, Argentina, upriver | USD 328/335 Dec/Jan new crop |
| Wheat, feed, Black Sea | USD 240/245 |
| Wheat bran, Black Sea | USD 200/205 |
| Barley, France, Rouen port | USD 252/254 |
| Barley, feed, Argentina, upriver | USD 220/225 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 210>>208 Nov>>Dec |
| Corn, FOB USA Pacific northwest | USD 239>>222 Oct>>Dec |
| Corn, FOB Argentina port, upriver | USD 211/214 Oct/Dec |
| Corn, FOB Brazil port | USD 181/185 Oct/Dec |
| Corn, FOB Black Sea – 30,000+ m/t | USD 198>>189 Spot>>Nov/Dec |
| Corn, FOB France | USD 229/232 Oct/Nov |
| Sorghum, FOB Texas, low tannin, GMO free | USD 233/235 Oct/Dec |
| Sorghum, FOB Argentina port, high tannin, GMO free | USD 192/198 Oct/Dec |
| Soymeal, 48 protein, FOB NOLA | USD 535>>515 Oct>>Dec |
| Soymeal, 48 protein, USA, Rotterdam | USD 590>>565 Oct>>Dec |
| Soymeal, Argentina, Rotterdam | USD 567>>560 Spot>>Dec |
| Soymeal, 47 pro, FOB Argentina | USD 527/535 Oct/Dec |
| Soymeal, 48 protein, Brazil, Rotterdam | USD 569/573 Spot/Dec |
| Soymeal, FOB Brazil | USD 522/526 Oct/Dec |
| Soymeal, 48 protein, India FOB | USD 525/535 |
Bulk vessel shipments, minimum 5000 m/t
| Corn Gluten Meal, USA FOB NOLA | USD 695/700 m/t |
| Corn Gluten Feed, USA FOB NOLA | USD 205/210 m/t |
| DDGS, 35 profat, USA FOB NOLA | USD 295>>277 m/t Oct>>Dec |
| DDGS, 35 profat, CNF Asia | USD 352>>344 Oct/Dec |
It is interesting to see that while corn prices are drifting lower the price for DDGS is moving higher, at least in the Oct/Nov positions. There just seems to be too much nearby demand for the available supply, which is certainly helping to keep export prices firm into late November. We were trying to source some DDGS for a buyer in Asia this week and could not find any sellers before December shipment – so things are tight nearby. Spot DDGS, if you can find it, is close to USD 20 m/t over the December price. There looks to be little reason to expect Oct/Nov DDGS prices to move lower, perhaps a little if corn falls out of bed, so buyers need to book Dec/Jan.
Corn gluten meal was a little stronger this week but this is probably just a one-week blip as all other protein prices are quite weak. Of course, it may just be like DDGS where the nearby supply is tight and prices are pushed higher but it is much harder to get a handle on CGM prices and fundamentals.
Corn gluten feed is, as normal, just following along with corn prices – up some days and down others.
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 |
| Europe MBM 50 protein | USD 410/440 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 650/680 m/t CNF Asia USD 780/800 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 590/620 m/t CNF Asia USD 740/750 m/t CNF Asia USD 640/660 m/t CNF Asia USD 820/850 m/t CNF Asia |
The following indications are at producer's factory, ex-works in bulk
| Meat and bone meal, USA, 50 protein | USD 470/480 m/t |
| Feathermeal 80 protein USA | USD 610/630 m/t |
| Poultry meal 57 protein, Eastern USA | USD 520/540 m/t |
International animal protein prices continue to move lower this week, as supply seems to be running well ahead of demand. There were stories in the trade of Asian buyers bidding up to USD 60 m/t below last week's prices and expecting to get covered. I don't think that prices are quite that week but buyers certainly feel that they are in charge.
The problem at present is that soymeal prices are so low that those who can are switching as much as possible to low priced soymeal and letting mountains of animal proteins build up. One of the international trade reports was saying that prices in Australia are off as much as A$ 100 m/t.
The weakness in MBM is not seen as much in feathermeal and poultry meal where the demand is better and supplies quite limited at present.
For buyers who have to use MBM in their feed rations, now would seem like a very good time to be booking some supply since prices will not get down to zero and soymeal prices will start to head higher once the USA soybean harvest is all done.
SECTION 2 --- FISHMEAL COMMENTS AND PRICES: PERUVIAN
While there is nothing official as yet from the Peruvian government, the results of the IMARPE study on the biomass were released and IMARPE feels that the quota for the next season in the North should not be greater than 2.3 million m/t and for the South not greater than 430,000 m/t. I guess that the assumption based on this is that the major quota will be between 2.0 and 2.3 with 2.0 million m/t looking about the most likely. As usual, the fishing season in the North will probably be Nov to Jan while the South quota should be spread over 12 months.
It has been reported in the press in Peru that the fishing industry is lobbying for a 2.5 million m/t quota but this looks to be difficult in light of the IMARPE report and recommendations.
On the sales and prices side of things, there is very little to report this week as sales are very slow as buyer are waiting for the quota announcement and as a result there has been little or no change in prices.
As a note, the IFFO annual conference will be held in Hong Kong October 28 to 30 – almost all the important people in the fishmeal/fishoil business will attend and I am sure that both the Peruvian producers and the Chinese buyers are looking to finalizing some new-season business. Not that it will be only people from Peru and China who attend – all the movers and shakers will be there.
LATE FLASH NEWS ---- Peru quota set at 2.3 million for North and 430.000 for South with fishing starting on Nov 11.
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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