Hammersmith Marketing Ltd - Grain Trading
WEEKLY FEED GRAIN AND PROTEIN REPORT November 09, 2013
PO Box N-3944, Nassau, Bahamas
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
Well, we waited for weeks for the latest USDA WASDE report with many experts not knowing what to say about where the market would go. The report is now here and in general is probably not as exciting as everyone had been hoping. Seems that most everyone had been looking for quite a bearish report but analysis of the report looks to be perhaps a little bit on the bullish side rather than bearish. Reading all the trade reports that came out after the WASDE it now looks like the experts feel that for soybeans and corn we have seen the lows on prices for the year. The report is certainly not what you could say is a bullish report just that while it could be seen to be mainly neutral it is more neutral/bullish than neutral/bearish.
For corn the report had yield increases, as expected, but then the acreage was reduced so that one tended to offset the other. In Brazil, where we all need to be watching for the corn crop, the rains have been quite good and much of the area that was short of moisture seems to have caught up, with more rain in the forecast.
Looking at corn futures, the commodity funds are very short corn and if they see a market rally coming there is a good chance that they could cover their shorts, which would tend to move corn prices higher.
On the soybean side of things, the market was sharply higher on Friday – not because the WASDE report was bullish but just because it wasn't bearish and a great many people had been expecting higher numbers and lower prices. Once things did not look to be bearish there was nowhere for prices to go but up.
Things are looking good in Brazil for the 2014 soybean crop with early projections for a crop that could make Brazil the world's largest producer of soybeans and push the USA into second.
Looking at the WASDE, as with corn, an increase in soybean yield was offset by smaller acreage but the overall soybean production is up by about 3.5% over the last report in September. Offsetting the increase in production is a forecasted increase in soybean demand and all of this only results in a small increase in ending stocks – stocks which are still at quite a low level.
As with corn, most experts don't now see much reason for soybean prices to move lower in the near term.
USA crop harvest progress - percentage harvested – per USDA
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| 2013 % | 2012% | Average% |
| Corn | 73.0 | 95.0 | 71.0 |
| Soybeans | 86.0 | 92.0 | 85.0 |
| Sorghum | 75.0 | 77.0 | 69.0 |
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Estimated Bulk Grain freight in USD per m/t, basis heavy grains
| US Gulf to Europe: 60/70,000 | $25.00 |
| US Gulf to Egypt: Panamax | $36.00 |
| US Gulf other Med: 25,000 MT | $40/42.00 |
| US Gulf Israel: 50,000 MT | $37.00 |
| US Gulf Morocco: 25,000 | $40/42.00 |
| US Gulf Turkey: 50,000 | $38.00 |
| US PNW Asia: 45,000 m/t | $34.00 |
| US PNW Japan: 50,000+ m/t | $31.00 |
| France to Algeria: 25,000 m/t | $25.00 |
| France to Saudi Arabia: 60,000 m/t | $30.00 |
| Argentina to Egypt: 50,000 | $38.00 |
| Argentina to Algeria: 25/30,000 m/t | $35.00 |
| Argentina to Morocco: 25,000 | $34.00 |
| Argentina to Saudi Arabia | $48.00 |
| Brazil to Algeria: 25,000 m/t | $32.00 |
| Brazil to Turkey/Egypt: 50,000 m/t | $30.00 |
| Brazil to Morocco: 30,000 m/t | $25.00 |
| Brazil to Saudi Arabia | $40.00 |
| Black Sea to Spain: 30,000 m/t | $21/22.00 |
| Black Sea to East Med: 30,000 m/t | $19/20.00 |
| Black Sea to East Med: coaster | $25/26.00 |
FOB port or location specified. Prices in US$, 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 279/281 Nov/Jan |
| Wheat, USA Hard Red Winter 12 protein | USD 318/320 Nov/Jan |
| Wheat, Black Sea 11.5 pro, 30,000+ m/t | USD 280/285 |
| Wheat, soft milling, France, Rouen port | USD 277/279 |
| Wheat, milling, Argentina, upriver | USD 345/350 Dec/Jan new crop |
| Wheat, feed, Black Sea | USD 270/275 |
| Wheat bran, Black Sea | USD 190/200 |
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| Barley, France, Rouen port | USD 252/254 |
| Barley, feed, Argentina, upriver | USD 218/223 Jan/Feb new crop |
| Barley, feed, Black Sea, 30,000+ | USD 240/245 |
| Barley, feed, USA Pacific Northwest | USD 250/255 |
| Corn, FOB NOLA USA | USD 216>>204 Dec>>Jan |
| Corn, FOB USA Pacific northwest | USD 234>>224 Nov>>Jan |
| Corn, FOB Argentina port, upriver | USD 204/214 Nov/Dec |
| Corn, FOB Brazil port | USD 185/192 Nov/Dec |
| Corn, FOB Black Sea, 30,000+ m/t | USD 204>>190 Spot>>Nov/Dec |
| Corn, FOB France | USD 235/239 Nov/Dec |
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| Sorghum, FOB Texas, low tannin, GMO free | USD 227/230 Nov/Jan |
| Sorghum, FOB Argentina port, high tannin, GMO free | USD 196/206 Dec/Jan/Feb |
| Soymeal, 48 protein, FOB NOLA | USD 553>>535 Nov>>Jan 2014 |
| Soymeal, 48 protein, USA, Rotterdam | USD 578>>561 Spot>>Jan 2014 |
| Soymeal, Argentina, Rotterdam | USD 556>>524 Spot>>Jan 2014 |
| Soymeal, 47 pro, FOB Argentina | USD 532/539 Nov/Dec |
| Soymeal, 48 protein, Brazil,Rotterdam | USD 558>>533 Spot>>Jan 2014 |
| Soymeal, FOB Brazil | USD 534/538 Nov/Dec |
| Soymeal, 48 protein, India FOB | USD 550/560 |
Bulk vessel shipments, minimum 5000 m/t
| Corn Gluten Meal, USA FOB NOLA | USD 770/780 m/t |
| Corn Gluten Feed, USA FOB NOLA | USD 227/230 m/t |
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| DDGS, 35 profat, USA FOB NOLA | USD 279>>270 m/t Dec>>Jan |
| DDGS, 35 profat, CNF Asia | USD 350>>347 m/t Dec>>Jan |
The feeling in the trade about DDGS is that the prices will probably not go any lower than what we see today – mainly due to corn prices probably having hit bottom for the year. We do have a serious shortage of DDGS supply available for export until Jan/Feb of 2014, which is keeping end 2013 prices quite high. Not that there are all that many export buyers still looking for 2013 shipment, just the odd buyer with some container shipment needs.
Some experts are advising that buyers should now be trying to lock-in prices for early 2014 or should be increasing their early 2014 purchases in order to capture the best price available. This does make sense as USA corn price would normally increase from November on, which will push DDGS prices higher.
Corn gluten meal export prices continued higher this week and with the rally in soymeal will probably move higher again next week. With tight supply and rallying protein prices it is difficult to see any weakness in CGM prices until export-ready supply improves. Corn gluten feed prices were about unchanged on the week but with corn prices probably at the bottom, we could see CGF prices move a little higher in coming weeks.
Container shipments, minimum 200 m/t
| Argentina Meat & Bone meal, 45 protein | USD sorry no updated prices this week |
| Paraguay Meat &Bone meal, 45 protein | USD 400/420 m/t CNF Asia |
| Europe MBM 50 protein | USD 410/430 m/t CNF Asia |
| Australian MBM 45 protein Australian MBM 50 protein Australian Feathermeal Australian Poultry meal, pet food grade | USD 490/520 mt CNF Asia USD 540/570 m/t CNF Asia USD 620/640 m/t CNF Asia USD 750/780 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 540/560 m/t CNF Asia USD 670/700 m/t CNF Asia USD 570/600 m/t CNF Asia USD 730/770 m/t CNF Asia |
The following indications are at producer's factory, ex-works in bulk
| Meat and bone meal, USA, 50 protein | USD 420/450 m/t |
| Feathermeal 80 protein USA | USD 550/570 m/t |
| Poultry meal 57 protein, Eastern USA | USD 500/520 m/t |
Soymeal prices moved higher this week and this will certainly push animal protein prices higher, assuming that the increases in soymeal stick. There was a rally in meat and bone meal prices on Friday but volume was small and it is difficult to know if this will become the market trend.
On the export side, prices in Asia have moved a little higher as the fight for business by Australian exporters seems to have come to an end and MBM CNF prices are getting back into line again. Although the prices in Asia have moved higher there is not a great deal of buying interest as major buyers bought quite a bit in recent days (at bargain prices) and may not be back in the market for a few weeks.
With excess supplies in Australia sold and higher vegetable protein prices it looks like we will see animal protein export prices getting a little firmer as 2013 winds down.
SECTION 2 --- FISHMEAL COMMENTS AND PRICES: PERUVIAN
No change seen in fishmeal prices in Peru this week, as all seems to be very quiet on the buyer side of business. Everyone is waiting to see exactly how the new fishing season develops.
Fishmeal stocks in China are reported to be quite high so demand from the major fishmeal buyer is low at present but then there is quite a bit of fishmeal for China on the books for Nov/Dec/Jan shipment. Overall pre-season booked business looks to be getting close to 300,000 m/t.
The latest export numbers from Peru show that, as expected, China is still over 60% of the business at around 62% with Germany accounting for another 12% followed by both Chile and Japan at about 6% each.
I was reading in the MSI Ceres report this week about the "exciting" world of fishmeal….only a fishmeal trader would ever call the business exciting. Try telling people how exciting it is when you are at a dinner party. You will find that you are very lonely, very quickly.
MSI Ceres was mentioning how they noticed at two recent conferences in Asia that the base of buyers for fishmeal seems to be getting bigger and bigger with more and more people getting involved. Of course, the problem that fishmeal buyers face, no matter how many of them there are, is that the world's fishmeal supply is about the same year after year after year. So now we have more buyers (or perhaps just traders) chasing the same supply, which will keep prices from falling too low in the long run.
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 |
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| 65 protein | 1310/1320 m/t |
| 65/66 protein | 1340/1350 m/t |
| 67 protein standard steam | 1370/1380 m/t |
| 67 protein SD 150 TVN | 1390/1400 m/t |
| 67 protein SD 120 TVN | 1400/1410 m/t |
| 67 protein SD 1000 hist, 120 TVN | 1440/1450 m/t |
| 68 protein SD 500 hist, 120 TVN | 1460/1470 m/t |
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| Fish oil .. crude bulk | 1850/1900 |
| Fish oil – crude drums | 2050/2100 |
| Fish oil – flexitank | 2000/2050 |
| Fish oil – Omega 3 28% EPA/DHA | 2450/2500 |
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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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