Hammersmith Marketing Ltd - Grain Trading
WEEKLY FEED GRAIN AND PROTEIN REPORT December 14, 2013
Representative 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
There will be no weekly report next week as my wife and I will be off on holidays for a week or so but everything will be back to normal on the 29th or 30 of December.
SECTION 1: FEED GRAINS -- VEGETABLE AND ANIMAL PROTEIN
The USDA WASDE report didn't have a big effect on corn prices although the report was seen to be a little bullish. The major concern this week is the corn situation in China and how this will affect all the business booked to China. The big guns from the USDA are on their way to China to see how the MIR162 GMO problem can be solved. The question now is what will the Chinese do with all the other US corn on order – can it be shipped without MIR162, can approval be sped up in China, will China switch their corn orders to other origins? There are many complications to the China business that will have to be answered in the next few days.
USA futures prices were also pushed a little lower at the end of the week due to concerns over possible US Senate action over the ethanol mandate which could reduce ethanol production and corn demand.
The weather in South America is still quite good for their corn and soybean crops but there are some areas of dryness that will need rain in coming days in order not to affect the crops. If the rain does not appear where it is needed we could see some upward pressure on prices.
Soybeans for 2013 had a decent move higher this week – but then the year is almost over so not too much interest in what December soybean prices are doing. The January/March prices for soybeans were up just a little bit probably pulled higher by increased prices for soymeal. There were also rumors in the market that China is looking for more soybeans for nearby shipment.
I was at a US Wheat seminar in Casablanca this week and one of the presentations highlighted the switch in crops to soybeans due to the much better farm income per hectare – not just in the USA but also in Argentina, Ukraine and Russia. Looks like one of these days we will be up to our armpits in soybeans from nonstandard origins. I guess the soybean/soymeal market, in the future, is going to face the same shakeup as hit the world wheat and corn markets when the Black Sea got rolling.
The USDA WASDE report did not have any serious surprises for soybeans/soymeal but there were some comments in the trade that with the size of the USA soybean crop and large crops expected in Argentina and Brazil it may be difficult for 2014 prices to stay at their current high levels.
If you look at the USA futures prices for soybeans there is only about a USD 10 m/t discount for 2014 soybeans while for soymeal the discount for 2014 soymeal is about USD 50 m/t, this would make one think that the price of soybeans should move lower.
Estimated Bulk Grain freight in USD per m/t, basis heavy grains
The strong rally in the Baltic dry Index seems to have moved into the grain freight market in the past few days as we see that many rates are up by close to 10% m/t. According to trade experts, this rally in freight prices will probably extend into early 2014 due to high demand for grain vessels in the USA and record imports of coal and ore by China
| US Gulf to Europe: 60/70,000 | $27.00 |
| US Gulf to Egypt: Panamax | $40/42.00 |
| US Gulf other Med: 25,000 MT | $44/45.00 |
| US Gulf Israel: 50,000 MT | $41/43.00 |
| US Gulf Morocco: 25,000 | $43/44.00 |
| US Gulf Turkey: 50,000 | $42/44.00 |
| US Gulf Japan: Panamax | $55/57.00 |
| US PNW Asia: 45,000 m/t | $34/36.00 |
| US PNW Japan: 50,000+ m/t | $31/33.00 |
| France to Algeria: 25,000 m/t | $27.00 |
| France to Saudi Arabia: 60,000 m/t | $35.00 |
| Argentina to Egypt: 50,000 | $42.00 |
| Argentina to Algeria: 25/30,000 m/t | $45.00 |
| Argentina to Morocco: 25,000 | $44.00 |
| Argentina to Saudi Arabia | $54.00 |
| Brazil to Algeria: 25,000 m/t | $40.00 |
| Brazil to Turkey/Egypt: 50,000 m/t | $37.00 |
| Brazil to Morocco: 30,000 m/t | $39.00 |
| Brazil to Saudi Arabia | $48.00 |
| 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 tons:
All shipments in bulk grain vessels unless stated otherwise
(NOLA is New Orleans, Louisiana, USA.)
| Wheat, USA Soft Red Winter, NOLA | USD 275>>272 Dec/Feb |
| Wheat, USA Hard Red Winter 12 protein | USD 300/305 Dec/Feb |
| Wheat, Black Sea 11.5 pro, 30,000+ m/t | USD 294/300 |
| Wheat, soft milling, France, Rouen port | USD 287/290 |
| Wheat, milling, Argentina, upriver | USD 335>>320 Dec>>Feb |
| Wheat, feed, Black Sea | USD 281/285 |
| Wheat bran, Black Sea | USD 180/190 |
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| Barley, France, Rouen port | USD 259/261 |
| Barley, feed, Argentina, upriver | USD 220>>210 Jan/Feb new crop |
| Barley, feed, Black Sea, 30,000+ | USD 243/247 |
| Barley, feed, USA Pacific Northwest | USD 235/240 |
| Corn, FOB NOLA USA | USD 206>>197 Dec>>Feb |
| Corn, FOB USA Pacific northwest | USD 232>>223 Dec>>Feb |
| Corn, FOB Argentina port, upriver | USD 201/206 March new crop |
| Corn, FOB Brazil port | USD 195/199 new crop |
| Corn, FOB Black Sea, 30,000+ m/t | USD 209/213 Spot>>Feb |
| Corn, FOB France | USD 248/256 Dec/Feb |
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| Sorghum, FOB Texas, low tannin, GMO free | USD 227/229 Dec/Jan/Feb |
| Sorghum, FOB Argentina port, high tannin, GMO free | USD 185/190 Dec/Jan/Feb |
| Soymeal, 48 protein, FOB NOLA | USD 548>>529 Nov>>Feb 2014 |
| Soymeal, 48 protein, USA, Rotterdam | USD 575>>565 Spot>>Feb 2014 |
| Soymeal, Argentina, Rotterdam | USD 568>>560 Spot>>Feb 2014 |
| Soymeal, 47 pro, FOB Argentina | USD 523/528 Dec/Feb |
| Soymeal, 48 protein, Brazil, Rotterdam | USD 567>>548 Spot>>Feb 2014 |
| Soymeal, FOB Brazil | USD 519/524 Dec/Feb |
| Soymeal, 48 protein, India FOB | USD 575/585 |
| Soybeans, FOB NOLA | USD 520/525 Dec/Jan |
| Soybeans, Argentina, FOB | USD 482/487 new crop May 2014 |
| Soybeans, Rotterdam | USD 558>>540 Dec>>Feb |
| Soybeans, Black Sea | USD 532/537 |
Bulk vessel shipments, minimum 5000 m/t
| Corn Gluten Meal, USA FOB NOLA | USD 780/790 m/t |
| Corn Gluten Feed, USA FOB NOLA | USD 247/250 m/t |
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| DDGS, 35 profat, USA FOB NOLA | USD 310>>300 m/t Dec>>Feb |
| DDGS, 35 profat, CNF Asia | USD 360>>355 m/t Dec>>Feb |
USA domestic DDGS prices were down a little this week which also pushed the export prices down a little. There is actually not much availability for export DDGS until into February/March 2014 and for the orders already book some producers are saying that they are having difficulty in getting empty containers for timely shipment.
There has been a lot of talk about how the Chinese GM problem will affect shipments of DDGS to China and could we see a sudden halt in shipments. It was reported this week that at least on shipment to China was found to have unapproved GM events but this was only reported in limited sources so may not be correct.
Buyers of DDGS are bidding below current market prices in anticipation of some kind of China problem but suppliers are not interested in low bids when stocks are low and demand is very good. With the higher than corn protein level in DDGS more buyers are looking at the corn/soymeal price ratio when buying DDGS and as a result we see export DDGS currently at quite a premium to export corn.
Corn gluten feed export prices were up a little this week in a very thinly traded market while corn gluten meal prices were steady or down a little. Like DDGS there is not much CGM available for shipment until you get into Feb/Mar of 2014, so Dec/Jan prices are really just rough ideas of where the market would be if you could find some supply.
It doesn't look like the price for corn by-products wants to move any lower in the short term. Corn seems to be about at the bottom and soymeal has been reasonably strong so up on prices may be a more possible alternative than down.
On the European side of DDGS, it is reported that margins on ethanol production in the EU are slipping and that it is thanks to the profits on DDGS sales that the whole Ethanol complex does not go into a loss position. As I am sure that everyone knows DDGS is a by-product of ethanol production. In Europe both wheat and corn are used for ethanol so we see both wheat and corn DDGS.
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 430/440 m/t CNF Asia |
| Europe MBM, 50 protein Europe Poultry meal, 65 protein Europe Feathermeal, 80 protein | USD 450/460 m/t CNF Asia USD 980/1000 m/t CNF Asia USD 700/720 m/t CNF Asia |
| Australian MBM 45 protein Australian MBM 50 protein Australian Feathermeal, 80 protein Australian Poultry meal, pet food grade | USD 550/570 m/t CNF Asia USD 600/620 m/t CNF Asia USD 650/660 m/t CNF Asia USD 840/860 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 580/600 m/t CNF Asia USD 720/730 m/t CNF Asia USD 600/620 m/t CNF Asia USD 830/850 m/t CNF Asia |
The following indications are at producer's factory, ex-works in bulk
| Meat and bone meal, USA, 50 protein | USD 485/500 m/t |
| Feathermeal 80 protein USA | USD 620/640 m/t |
| Poultry meal 57 protein, Eastern USA | USD 550/560 m/t |
Animal protein prices have moved higher from most origins this week and traders of European proteins say that they feel prices will continue higher as the demand outpaces the supply. Australia and New Zealand prices seemed to be up by about USD 10 m/t while USA prices were closer to USD 20 m/t higher. Feathermeal from the US took quite a jump which was mainly due to increased domestic demand in the US.
There are so many holidays coming up in the next three weeks in major producing countries that prices will be difficult to nail down but the market is expected to be quite calm until we get past New Year and into January but, at least for the short-term, experts don't see the market prices moving lower.
SECTION 2 --- FISHMEAL COMMENTS AND PRICES: PERUVIAN
Fishing in Peru is now getting close to 70% of quota landed with just under 1.6 million m/t of fish recorded as of the 13th. Daily catch levels have ranged from 30,000 m/t up to just over 50,000 m/t. So, with about 700,000 m/t still to catch it looks like another 20 days or so of good fishing will be needed to finish off the quota.
The fishmeal trade in Peru reports that business is quiet especially with China where the local Chinese prices is below replacement and Chinese traders are facing significant losses. November exports from Peru were quite low but then there was very little fishmeal available for shipment and the new season had just started.
Reports from Peru show that there has been no accumulation of stocks of fishmeal as yet, since orders on hand have been able to keep up with production and warehouses are empty. Well not exactly empty but certainly not full of unsold fishmeal – most everything in any producer's warehouses is allocated to a customer.
The trade papers in Peru are full of the continuing saga of the government fighting with the fishing industry and with the courts over recent decisions on fishing areas and rights. Luckily for international buyers all these disputes have not as yet had any serious impact on the fishmeal production but, long-term, are bound to affect the industry, no matter who comes out on top.
As to prices, at least for the next three weeks or so, while we work through all the holidays, we will probably see a price range of up or down USD 20 m/t and once we get into January and see how the orders compare to the supply then we will be able to determine the longer term price direction. If orders are good then we should see steady to higher prices but if orders are limited then steady to lower would seem to be the direction.
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 | 1300/1320 m/t |
| 65/66 protein | 1320/1340 m/t |
| 67 protein standard steam | 1340/1360 m/t |
| 67 protein SD 150 TVN | 1360/1380 m/t |
| 67 protein SD 120 TVN | 1380/1400 m/t |
| 67 protein SD 1000 hist, 120 TVN | 1410/1430 m/t |
| 68 protein SD 500 hist, 120 TVN | 1430/1450 m/t |
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| Fish oil, crude bulk | 1750/1800 |
| Fish oil, crude drums | 1950/2000 |
| Fish oil, flexi tank | 1900/1950 |
| Fish oil, Omega 3: 28%EPA/DHA | 2350/2400 |
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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