Weekly report Nov 16, 2013

 

 

Hammersmith Marketing Ltd - Grain Trading

WEEKLY FEED GRAIN AND PROTEIN REPORT   November 16, 2013

 

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SECTION 1:  FEED GRAINS -- VEGETABLE AND ANIMAL PROTEIN

 

Conn prices were pushed a little lower this week due to some carry-over concern from last week's WASDE report and added concern about the US governments ethanol programs. There is a large pile of short positions in futures being held by speculators, so these folks are all looking for the market to move lower but this also makes the market quite vulnerable to sudden short covering if the market take a tick or two higher and short covering would just push prices up. However, there doesn't seem to be many, if any, people talking about higher corn prices in the short-term.

 

Corn export sales for the week were much better than expected but this did not tend to get the market excited as, with the Ukraine just getting its corn export program rolling, there may not be too many weeks of USA corn exports exceeding expectations.

 

The reduction in the US ethanol mandate from 13.8 billion gallons to 13.0 billion caused some weakness in the market but there is a 60 day period for comments on the proposal before anything can happen so there is no immediate actual effect on corn usage.

 

Soybeans and soymeal were both down on the week and some experts say that it was all due to the export sales coming in at less, even though the actual sales were quite high the experts discounted that as most were to China with little going elsewhere, so that makes it a negative. However, other sources say that Argentina soymeal is very competitive against US and that this could reduce US exports.

 

There was a 2014 planting estimate from Informa, up by 10 percent, that seems to be very high and if true could be a record level for soybeans. The proposed biodiesel mandate was also not good for soybeans as this could reduce soyoil demand and we may end up with mountains of soyoil unless the soy crush is reduced.

 

Reading all the various reports at the end of the week it looks like most opinions have soybeans/meal/oil tending to move lower in the short term as there just does not seem to be anything in the market that will push prices higher.  

 

 

USA crop harvest progress - percentage harvested – per USDA

 

	2013 %	2012%	Average%
Corn	84.0	97.0	79.0
Soybeans	91.0	95.0	92.0
Sorghum	85.0	87.0	78.0

 

 

Estimated Bulk Grain freight in USD per m/t, basis heavy grains 

 

US Gulf to Europe: 60/70,000	$23.50
US Gulf to Egypt: Panamax	$35.00
US Gulf other Med: 25,000 MT	$39/41.00
US Gulf Israel: 50,000 MT	$36.00
US Gulf Morocco: 25,000	$40/41.00
US Gulf Turkey: 50,000	$37.00
US Gulf Japan: Panamax	$56.00
US PNW Asia: 45,000 m/t	$33.00
US PNW Japan: 50,000+ m/t	$28.00
France to Algeria: 25,000 m/t	$25.00
France to Saudi Arabia: 60,000 m/t	$30.00
Argentina to Egypt: 50,000	$34.00
Argentina to Algeria: 25/30,000 m/t	$35.00
Argentina to Morocco: 25,000	$33.00
Argentina to Saudi Arabia	$48.00
Brazil to Algeria: 25,000 m/t	$32.00
Brazil to Turkey/Egypt: 50,000 m/t	$25.00
Brazil to Morocco: 30,000 m/t	$24.00
Brazil to Saudi Arabia	$40.00
Black Sea to Spain: 30,000 m/t	$26/27.00
Black Sea to East Med: 30,000 m/t	$22/24.00
Black Sea to East Med: coaster	$35/38.00

 

  

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 275/283 Nov/Jan
Wheat, USA Hard Red Winter 12 protein	USD 313/315 Nov/Jan
Wheat, Black Sea 11.5 pro, 30,000+ m/t	USD 285/289
Wheat, soft milling, France, Rouen port	USD 278/280
Wheat, milling, Argentina, upriver	USD 350/355 Dec/Jan new crop
Wheat, feed, Black Sea	USD 270/275
Wheat bran, Black Sea	USD 190/200
Barley, France, Rouen port	USD 248/250
Barley, feed, Argentina, upriver	USD 215/220 Jan/Feb new crop
Barley, feed, Black Sea, 30,000+	USD 240/245
Barley, feed, USA Pacific Northwest	USD 255/260

 

Corn, FOB NOLA USA	USD 206>>202 Dec>>Jan
Corn, FOB USA Pacific northwest	USD 227>>220 Nov>>Jan
Corn, FOB Argentina port, upriver	USD 203/206 Nov/Dec
Corn, FOB Brazil port	USD 190/195 Nov/Dec
Corn, FOB Black Sea, 30,000+ m/t	USD 201>>192 Spot>>Nov/Dec
Corn, FOB France	USD 237/243 Nov/Dec
Sorghum, FOB Texas, low tannin, GMO free	USD  225/228 Nov/Jan
Sorghum, FOB Argentina port, high tannin, GMO free	USD  185/195 Dec/Jan/Feb
Sorghum, FOB Black Sea - Ukraine	USD  210/213 Dec/Jan

 

Soymeal,  48 protein, FOB NOLA	USD 536>>523 Nov>>Jan 2014
Soymeal, 48 protein, USA, Rotterdam	USD 571>>560 Spot>>Jan 2014
Soymeal, Argentina, Rotterdam	USD 564>>558 Spot>>Jan 2014
Soymeal, 47 pro, FOB Argentina	USD 509/513 Nov/Dec
Soymeal, 48 protein, Brazil, Rotterdam	USD 560>>544 Spot>>Jan 2014
Soymeal, FOB Brazil	USD 505/514 Nov/Dec
Soymeal, 48 protein, India FOB	USD 560/570

 

Bulk vessel shipments, minimum 5000 m/t

 

Corn Gluten Meal, USA FOB NOLA	USD   810/830 m/t
Corn Gluten Feed, USA FOB NOLA	USD   220/225 m/t
DDGS, 35 profat, USA FOB NOLA	USD   310>>290 m/t Dec>>Feb
DDGS, 35 profat, CNF Asia	USD   345>>341 m/t Dec>>Feb

 

DDGS and corn gluten meal were both up strongly this week, even with corn prices being a little lower. The rally in these prices is strictly a matter of supply and demand and in both cases the demand is very good but the current supply, into 2014, is very tight. In fact, the high prices shown for Nov/Dec shipment reflect the fact that there is nothing available so the prices are merely representations rather than a level at which one can buy.

 

For both DDGS and CGM you need to look out into Jan/Feb to get supply shipped both because the supply or product is tight but also due to a shortage of available containers for export. Much of the DDGS to Asia goes in containers and with the current very good export demand there is a severe strain on container supply.

 

So, what will the proposals concerning ethanol in the USA do to the price of DDGS and to corn – well, if ethanol production drops then so will the DDGS supply which could tend to push up prices but if there is less ethanol then there is less corn used so corn prices should drop and all this could mean that corn becomes more attractive to feed people than DDGS – but we will need to wait and see.

 

 

 

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        "       "
Europe MBM 50 protein	USD        "       "
Australian MBM 45 protein    Australian MBM 50 protein    Australian Feathermeal    Australian Poultry meal, pet food grade	USD 480/510 mt CNF Asia USD 530/550 m/t CNF Asia USD 640/650 m/t CNF Asia USD 770/790 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 640/650 m/t CNF Asia USD 590/610 m/t CNF Asia USD 820/840  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 550/570 m/t
Poultry meal  57 protein, Eastern USA	USD 490/510 m/t

 

Asian CNF animal protein prices moved a little higher this week, probably due to them having dropped too low in the last couple of weeks as exporters fought each other for business. Demand for animal protein in Asia also seems to have picked up a little but perhaps this was spurred by the low prices seen recently. However, feathermeal prices were not at all strong this week as good supplies in most exporting countries weighed on the market. According to reports from the USA, their large feathermeal supply is due to the upcoming Thanksgiving holiday, a time when everyone in the USA eats turkey – well perhaps not everyone but certainly many.

 

With soymeal finishing the week lower and the chances that it may move lower again next week then we should probably see a little weakness slipping into the animal protein market – especially in the USA, perhaps less so in Asia.

 

Further down the page are the USA export numbers and for both MBM and feathermeal, if you take Indonesia out of the export numbers (and perhaps Canada and Mexico) then there are not all that many buyers left for USA animal proteins.

 

 

 

USA Grain/Soybean exports – Jan/Sep 2013, in m/t – major destinations

 

	Wheat  ,000	Corn ,000	Sorghum ,000	Soybeans  ,000
Brazil	2,972
Canada		361		111
Chile	625
China	3,409	1,468	123	7,647
Columbia	633	110		89
Cuba		185		64
Dominican Rep	369
Egypt	1,586			329
Germany				813
Guatemala	367	180
Honduras		171
Indonesia	464			1,194
Italy	460		43
Jamaica		175
Japan	2,525	4,816	191	1,106
Kenya			80
Korea, South	809	102		251
Malaysia				178
Mexico	2,411	3,743	833	1,786
Nigeria	2,453
Peru	635
Philippines	1,524
Saudi Arabia		210
South Africa			24
Spain			36	338
Sudan			131
Taiwan	728	383		560
Thailand	380
Tunisia				91
Turkey	341
Vietnam				311
Venezuela	390	964
Yemen	414

 

 

 

USA Protein exports – Jan/Sep 2013 in m/t – major destinations

 

	Soymeal	Distillers Dried Grains DDGS	Corn Gluten Feed	Corn Gluten Meal	Meat & Bone Meal Incl pork and Poultry	Feather meal
Canada	660,000	385,000	24,000	47,000	34,000
Chile				80,000		40,000
China		2,750,000			17,000
Columbia	231,000	73,000	25,000	55,000
Denmark	194,000
Dominican Rep	232,000
Ecuador	227,000				6,000
Egypt	224,000	97,000	25,000	91,000
Guatemala	226,000	43,000			9,000
Indonesia		156,000	17,000	207,000	44,000	87,000
Ireland		184,000	261,000
Israel		104,000	122,000	20,000
Japan		287,000		29,000
Korea, South		292,000	28,000
Malaysia				54,000	3,000
Mexico	970,000	903,000		58,000	23,000
Morocco	171,000	93,000	42,000
Philippines	664,000	40,000			27,000	6,000
Poland	280,000
Taiwan		176,000		25,000
Thailand				25,000	12,000
Turkey	278,000	251,000	110,000
Venezuela	549,000
Vietnam	205,000	288,000		23,000		4,000

 

 

SECTION 2 --- FISHMEAL COMMENTS AND PRICES: PERUVIAN

 

 

Fishing in Peru was quite good as the week ended and a full complement of vessels was at work – the last two days were up around 50,000 m/t per day, which, if the rate keeps up, would mean that fishing could be all done by the end of December. Of course, as we all know, fishing never goes as well as one thinks for days on end, there are bound to be bad days and mini-bans to slow the fishing.

 

According to the latest trade numbers from Peru close to 300,000 m/t of the new fishmeal has now been sold which is over 50% of the expected Peru production. Not too bad a sales picture for producers and this without much buying interest from major European buyers.

 

The prices quoted out of Peru this week are quite a bit higher than last week's numbers and some experts are saying that it will be difficult for fishmeal prices to move much higher but that we could see prices move in a wide range of +/- USD 50/60 m/t over the next few weeks. No one is looking for a sudden rally in prices or for that matter for a sudden drop in prices. As a matter of information, fishmeal prices from Chile seem to be about USD 20 m/t less than current Peruvian prices.

 

Asian demand for fishmeal this time of year is normally at a low but buyers will be looking for early 2014 shipment to cover Spring 2014 aquafeed needs.

 

For the next while we will all just be watching the Peruvian fishing to see how the daily catch is going but, other than bad weather, no one expects any fishing surprises.

 

 

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	1350/1370 m/t
65/66 protein	1400/1420 m/t
67 protein standard steam	1420/1440 m/t
67 protein SD 150  TVN	1440/1460 m/t
67 protein SD 120 TVN	1460/1480 m/t
67 protein SD 1000 hist, 120 TVN	1480/1500 m/t
68 protein SD 500 hist, 120 TVN	1500/1520 m/t
Fish oil .. crude bulk	1700/1750
Fish oil – crude drums	1950/2000
Fish oil – flexitank	1800/1850
Fish oil – Omega 3 – 28%EPA/DHA	2300/2350

 

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