Weekly report -- Oct 12, 2013

 

 

Hammersmith Marketing Ltd  - Grain Trading

WEEKLY FEED GRAIN AND PROTEIN REPORT   October 12, 2013

                                                                       

France:  Rep. Office: +33.9.7044.4881   Mobile: +33.6.8068.4564    Fax: +33.4.5774.7575

13+220 Quartier La Galine, D-99, Mas Martin, St Remy de Provence, 13210 France

 

Corporate Office: Trident Services, Kings Court, Bay Street, PO Box N-3944, Nassau, Bahamas.

Email:   tradegroup@hammersmith.biz    WWW:  hammersmithltd.blogspot.com       SKYPE: bacon39a  

 

 

SECTION 1:  FEED GRAINS -- VEGETABLE AND ANIMAL PROTEIN

 

The poor old market for USA grains and oilseeds is suffering through another week on no reports from the USDA, reports that the trade depends on every week to let them know which way the market will be going.  Now we are back to the good ld days where we all had to guess at the best course of action.  At least we know that this US Government shut down cant go on for every, so we will just have had two weeks or so of information darkness before all gets back to normal again.  Amazing how much we all miss these many USDA agriculture reports.

 

One trade report was saying that the lack of USDA reporting on sales and shipments has been great for confidentiality as now buyers and sellers can go wild and know that for now their actions will not become public knowledge.  The trade says that physical grain buyers and sellers have been very active during the shutdown as it is a great opportunity to sneak in some big bits of business.  Of course all there large trades will be reported as soon as the shutdown ends but for now interesting trades are probably being done.

 

Corn prices were down a little bit at the end of the week and the trade seems to feel that much of the weakness was due to the chance of reduced demand from the ethanol side in coming months.  Corn prices are at their lowest level since August of 2010 and many wonder if there is actually room for prices to go any lower.  There also seems to be a general feeling in the trade that the corn yields will actually be higher than the last USDA estimates – not a huge amount higher but something in the 2 to 3% range, still enough to push ending stocks quite a bit higher.

 

It is going to be difficult for corn prices to move an higher as the harvest races along and every one seems to agree that the trend in the short term has got to be to lower prices, perhaps not much lower but at least not higher.  

 

Soybeans and soymeal were down on the week and it looks like some of the commodity funds may be increasing some of their short position in anticipation of lower price. Of course, with harvest pressure this month prices would normally move lower.  With the harvest results that have been seen so far it is impossible to know how the overall yield situation will be. Reports are just too spotty and too variable to allow any decent comments on soybean yields.  A number of private forecasters have been saying that the soybean yield will be higher than the USDA forecast but most are very, very slightly higher in their yield estimates.

 

For now it looks like the trend for soybeans/soymeal will have to be to lower levels -- at least until a good idea of yields can be made.

 

 

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 292/295 Oct/Dec
Wheat, USA Hard Red Winter 12 protein	USD 332/334 Oct/Dec
Wheat, milling Black Sea 11.5 pro – 30,000+ m/t	USD 230/237
Wheat, soft milling, France, Rouen port	USD 269/271
Wheat, milling, Argentina, upriver	USD 338/345 Dec/Jan new crop
Wheat, feed, Black Sea	USD 221/229
Wheat bran, Black Sea	USD 190/205
Barley, France, Rouen port	USD 252/254
Barley, feed, Argentina, upriver	USD 218/225 Dec/Jan new crop
Barley, feed, Black Sea – 30,000+	USD 239/244
Barley, feed, USA Pacific Northwest	USD 250/255

 

Corn, FOB NOLA USA	USD 218>>207 Nov>>Dec
Corn, FOB USA Pacific northwest	USD 235>>219 Oct>>Dec
Corn, FOB Argentina port, upriver	USD  204/209  Oct/Dec
Corn, FOB Brazil port	USD  175/181  Oct/Dec
Corn, FOB Black Sea – 30,000+ m/t	USD  198>>191  Spot>>Nov/Dec
Corn, FOB France	USD  229/235 Oct/Nov
Sorghum, FOB Texas, low tannin, GMO free	USD  229/231 Oct/Dec
Sorghum, FOB Argentina port, high tannin, GMO free	USD  194/200 Oct/Dec

 

Soymeal,  48 protein, FOB NOLA	USD  520>>513 Oct>>Dec
Soymeal, 48 protein, USA, Rotterdam	USD  592>>565 Spot>>Dec
Soymeal, Argentina, Rotterdam	USD  590>>560 Spot>>Dec
Soymeal, 47 pro, FOB Argentina	USD  530/536 Oct/Dec
Soymeal, 48 protein, Brazil, Rotterdam	USD  592/568 Spot/Dec
Soymeal, FOB Brazil	USD  520/524 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   215/220 m/t
DDGS, 35 profat, USA FOB NOLA	USD   285>>275 m/t Oct>>Dec
DDGS, 35 profat, CNF Asia	USD   347/353 Oct/Dec

 

Corn by-products still tend to follow corn prices and with corn prices just a little lower there was a little bit of weakness in DDGS for 2014 but little or no change either CGM or CGF.  As mentioned last week, or perhaps the week before, it is very difficult to find any DDGS for shipment much before December and too a degree the same situation exists with CGM and CGF.  Once we get the corn harvest into full swing and see the silos filling up then perhaps it will become a little easier to find corn by-products for export markets.  There has been some talk in the USA about lower ethanol production, this could limit DDGS supply a little and keep prices firmer. But then export buyers will not buy much DDGS if it does not compete against corn and soymeal (unless, like China, there are other reasons)

 

Corn by-products should do what corn does but with corn prices getting so low will we see lower prices in coming weeks, very difficult to know.     

 

 

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 525/545 mt CNF Asia USD 580/600 m/t CNF Asia USD 640/660 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 730/740 m/t CNF Asia USD 610/630 m/t CNF Asia USD 800/830  m/t CNF Asia

 

The following indications are at producer's factory, ex-works in bulk

 

Meat and bone meal, USA, 50 protein	USD  440/460 m/t
Feathermeal  80 protein USA	USD  580/600 m/t
Poultry meal  57 protein, Eastern USA	USD  500/520 m/t

 

With prices for most vegetable protein items moving lower this week, it was very difficult for animal proteins to maintain their price levels.  In most exporting countries the export prices for all animal proteins, except perhaps pet food grade poultry meal, tended to slip lower.  However, there needs to be a little more slip in the animal protein prices in order to get back into more normal price relationship with soymeal.  With animal proteins priced just a tad too high end-users will cut back on usage and switch to as much lower prices vegetable protein as possible.

 

If you look at historical price charts for proteins , animal and vegetable, prices tend to be at their lowest when the USA harvest is being made – this due to the weakness in soybean/soymeal prices that occur in September most years.  Normally, after September prices for all proteins tend to start to creep up again pushed higher to some degree by the fact that soybeans in storage cost more than soybeans right off the fields – prices from September on include financing and storage costs which pushes vegetable protein prices higher and should drag animal proteins along --- of course this is all based on what has happened in the past in an average year – 2013/14 may not be average, but who knows today. 

 

 

SECTION 2 --- FISHMEAL COMMENTS AND PRICES: PERUVIAN

 

Well, now we all know what the fishing quotas are for Peru for the next few months: 2.304 million m/t for the North, Nov 11 to Jan 31 and 430,000 m/t for the South: 170,000 m/t Oct/Dec 2013 and 260,000 m/t Jan/Mar 2014.  Anything not landed in the South in the first tranche will be added to the second tranche ---- the total therefore is just over 2.7 million m/t of catch and should yield very close to 630,000 m/t of fishmeal.

 

With the new fishing season starting in almost the middle of November, there will not be any fishmeal available for shipment from Peru until the second half of December, which means arrival at almost any destination will not be until well into late January or early February.

 

There has not been much new buyer excitement this week since the quota announcement but the producers had presold a good chunk of their production – some say in excess of 50% per-sold – and are not all that excited about rushing out to get more business, especially with a quota smaller than the 2.5 million m/t the market had been expecting.

 

Overall the Peru fishmeal industry does not seem to be upset with the quota level. Yes it is about 8% below where they wanted the quota set but I am quite sure that the slightly lower quota should not create any hardship for producers.

 

There has been no change in prices this week due to a lack of buyers in the market but the slightly smaller quota could make prices a little bullish in weeks to come, especially if there is a burst of buying at the IFFO Conference in Hong Kong on Oct 28/30. 

 

Speaking of the IFFO, they made a very positive statement concerning the new Peru quotas and the fish management programs of the Peruvian government that have resulted in fishing quotas getting back to historical levels.

 

IFFO's Director General, Andrew Mallison said: "We are very pleased to hear of increased quota based on sound science from IMARPE and the precautionary approach. The Government has also announced that surveillance systems will be strengthened on landings, discards, juvenile catch, by catch of other species and the anchovy reproductive process. It looks very much like the newly announced quotas are more in keeping with traditional historical figures and reflect the success of the emphasis on the long-term sustainability of this important marine resource."

 

According to a press release CPF – Charoen Pokphand Foods will no longer be using any fishmeal in their feed production.  They say that their usage level has dropped from close to 30% 12 years ago to closer to 10% today with the target of reaching zero by 2020. Much of this change is being brought on by CPF's concern for the sustainability of the fishstocks in Asia but they also said that if fishing methods and sustainability improve they could  continue to use fishmeal in the future.

 

 

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