Hammersmith Marketing Ltd - Grain Trading
WEEKLY FEED GRAIN AND PROTEIN REPORT January 04, 2014
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
I hope that many of you will be attending the: U.S., Middle East & Africa Grain Forum that will be held in Doha, Qatar, from January 28-29, 2014. See you there!
SECTION 1: FEED GRAINS -- VEGETABLE AND ANIMAL PROTEIN
Corn prices ended the week with little or no change from the week before. Perhaps down by USD 1 or 2 m/t, but not enough to be of any concern to buyers or sellers. There was still some concern about the China GMO situation and the export sales numbers were not as high as the trade would have liked and then there was the good weather in Brazil that should help the corn crop. All good reasons for the corn prices to slip lower but they did not slip much.
More rain is expected in Brazil in the next couple of weeks and this should end most of the dryness problems that had existed. Argentina has had good rains but this has only covered about 2/3 of the corn area so more rain will be needed. The latest USDA supply and demand report is coming out at the end of next week but no one is looking for any surprises since it is kind of a between the crops report.
On the USA corn demand side of things, the ethanol production numbers are still very good and this is keeping the domestic demand for corn for ethanol up at the high levels that we have seen since back in mid-October. Reported corn for ethanol daily use is reported at just under 14,000,000 million bushels per day or about 350,000 m/t of corn per day. That is a good chunk of corn per day.
I don't normally say anything about wheat but this week Friday was quite a day with both Egypt and Algeria booking in excess of 500,000 m/t each – not too bad to have a one million m/t sales day. Unfortunately, it looks like US wheat was not able to get any of the business. It is still a matter of freight being just that bit too expensive as the FOB prices were competitive.
Soybeans and soymeal certainly had a down week last week as soybeans dropped about USD 15 m/t while soymeal was down closer to USD 20 m/t. The big pressure on the market is coming from the expected very large South American crop and what it is going to do to prices. We see the price spread today in both the FOB and CNF Rotterdam prices with a very significant discount seen for March/April prices. Experts feel that there could be some major cancellations of USA soybeans that have been booked for 2014 once orders can be placed in Brazil.
Of course, the problem with Brazil is that while the prices are low the delays in shipment can be very long and buyers risk running out of on hand stocks while the delay costs in Brazil mount. There is nothing wrong with buying lower cost Brazilian soybeans but you just have to factor in the delays and the extra delay costs and then perhaps the lower priced soybeans are not quite as cost effective as on first blush.
Estimated Bulk Grain freight in USD per m/t, basis heavy grains
| US Gulf to Europe: 60/70,000 | $25.00 |
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| US Gulf to Egypt: Panamax | $37/38.00 | Down $2.00 |
| US Gulf other Med: 25,000 MT | $44/45.00 |
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| US Gulf Israel: 50,000 MT | $38/39.00 | Down $2.00 |
| US Gulf Morocco: 25,000 | $43/45.00 |
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| US Gulf Turkey: 50,000 | $39/40.00 | Down $2.00 |
| US Gulf Japan: Panamax | $55/57.00 |
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| US PNW Asia: 45,000 m/t | $34/36.00 |
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| US PNW Japan: 50,000+ m/t | $31/33.00 |
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| France to Algeria: 25,000 m/t | $27.00 |
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| France to Saudi Arabia: 60,000 m/t | $35.00 |
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| Argentina to Egypt: 50,000 | $40.00 |
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| Argentina to Algeria: 25/30,000 m/t | $44/45.00 |
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| Argentina to Morocco: 25,000 | $42/44.00 |
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| Argentina to Saudi Arabia | $54.00 |
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| Brazil to Algeria: 25,000 m/t | $40/41.00 |
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| Brazil to Turkey/Egypt: 50,000 m/t | $37/39.00 |
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| Brazil to Morocco: 30,000 m/t | $37/39.00 |
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| Brazil to Saudi Arabia | $49.00 |
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| Black Sea to Spain: 30,000 m/t | $34/37.00 |
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| Black Sea to East Med: 30,000 m/t | $30/32.00 |
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| Black Sea to East Med: coaster | $40/43.00 |
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| Baltic Dry Index | 2036 | Down 241 – 10.5% |
| Baltic Capesize Index | 3531 | Down 547 – 13.4% |
| Baltic Panamax Index | 1750 | Down 75 – 4.2% |
| Baltic Handisize Index | 763 | Down 38 – 4.8% |
FOB port or location specified. Prices in US$, 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 272>>265 Jan/Mar |
| Wheat, USA Hard Red Winter 12 protein | USD 295>>290 Jan/Mar |
| Wheat, Black Sea 11.5 pro, 30,000+ m/t | USD 302/310 |
| Wheat, soft milling, France, Rouen port | USD 282/286 |
| Wheat, milling, Argentina, upriver | USD 325/340 Feb>>Apr |
| Wheat, feed, Black Sea | USD 275/279 |
| Wheat bran, Black Sea | USD no prices |
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| Barley, France, Rouen port | USD 248/251 |
| Barley, feed, Argentina, upriver | USD 216/220 Jan/Mar |
| Barley, feed, Black Sea, 30,000+ | USD 245/249 |
| Barley, feed, USA Pacific Northwest | USD 235/240 |
| Corn, FOB NOLA USA | USD 206>>199 Jan>>Mar |
| Corn, FOB USA Pacific northwest | USD 225>>220 Jan>>Mar |
| Corn, FOB Argentina port, upriver | USD 195/201 March new crop |
| Corn, FOB Brazil port | USD 182/191 May new crop |
| Corn, FOB Black Sea, 30,000+ m/t | USD 204/210 Spot/Mar |
| Corn, FOB France | USD 243/248 Jan/Mar |
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| Sorghum, FOB Texas, low tannin, GMO free | USD 230/233 Jan/Mar |
| Sorghum, FOB Argentina port, high tannin, GMO free | USD 190/195 Jan/Mar |
| Soymeal, 48 protein, FOB NOLA | USD 533>>492 Jan>>Mar 2014 |
| Soymeal, 48 protein, USA, Rotterdam | USD 579>>531 Spot>>Mar 2014 |
| Soymeal, Argentina, Rotterdam | USD 570>>507 Spot>>Mar 2014 |
| Soymeal, 47 pro, FOB Argentina | USD 534>>478 Jan/Mar |
| Soymeal, 48 protein, Brazil, Rotterdam | USD 567>>494 Spot>>Mar 2014 |
| Soymeal, FOB Brazil | USD 524>>463 Jan/Mar |
| Soymeal, 48 protein, India FOB | USD 575/585 |
| Soybeans, FOB NOLA | USD 544>>523 Jan/Mar |
| Soybeans, Argentina, FOB | USD 488/492 new crop May 2014 |
| Soybeans, Rotterdam | USD 567>>536 Jan>>Mar |
| Soybeans, Black Sea | USD no prices |
Bulk vessel shipments, minimum 5000 m/t
| Corn Gluten Meal, USA FOB NOLA | USD 760/770 m/t |
| Corn Gluten Feed, USA FOB NOLA | USD 247/250 m/t |
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| DDGS, 35 profat, USA FOB NOLA | USD 307>>296 m/t Jan>>Mar |
| DDGS, 35 profat, CNF Asia | USD 363>>359 m/t Jan>>Mar |
There were some comments in the press this week that the rejection by China of a couple of thousand tons of USA DDGS had caused prices to nosedive by as much as USD 20 m/t but much of this seems to be panic press rather than actual trade. You can look far and wide this week and there just does not seem to be any highly discounted DDGS prices. However, there is the odd story of an afloat shipment of DDGS for China, in containers, being sold to another Asian destination at a discount. It does make sense to resell rather than to chance rejection – as they say "first loss is best loss". On an FOB USA basis there is a little weakness in DDGS export prices but certainly nowhere near USD 20 M/T. Looking at the USA production side of corn DDGS, the daily production levels are chugging along at 87,000 to 90,000 m/t, just where they have been since October.
China had taken 3.3 million m/t of DDGS to the end of October and looked quite likely to hit 4.0 million m/t by the end of December, which they may still have done. But 2014 may be another story unless the MIR162 problem can be solved or a method found to ship only approved event DDGS for China. It would be a real shame to see close to 4 million m/t in export DDGS business be in question for 2014.
Not much word on any changes in corn gluten meal or corn gluten feed this week but since China is not a buyer of either there should be no serious effect on export prices that is unless China decides that corn gluten feed can replace some DDGS but then we would be back to GMO problems again but with CGF.
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 490/510 m/t |
| Feathermeal 80 protein USA | USD 630/650 m/t |
| Poultry meal 57 protein, Eastern USA | USD 560/580 m/t |
USA domestic animal protein prices changed very little on the week, of course it was a short week, with just a bump up of about USD 10 m/t for poultry meal being about the only change. Accurate prices were very hard to find at the end of the short week and next week's info will be much more up to date. With the continued drop in soymeal prices, we should see some weakness in the USA domestic animal protein prices and hopefully any weakness will flow into the export prices.
Looking at the information available for prices in Asia at the end of the week there seems to be little or no change in quoted prices. Asian demand is reported to be quite good with most buyers looking at Australian product due to good exchange rates versus the US dollar.
Reports say that with the good demand the sellers are trying to get an extra USD 20 m/t or so from buyers but with little success. However, with demand quite high it seems more likely for prices to be steady to firmer rather than lower – that is unless a chunk of business can be replaced with lower cost soymeal or even some corn gluten meal.
SECTION 2 --- FISHMEAL COMMENTS AND PRICES: PERUVIAN
Peru fishing has picked up a little after Jan01, at least we are up to just over 20,000 m/t in catch and in excess of 100 vessels fishing. There is now a balance of about 240,000 m/t of fish left to catch under the quota. The trade side of things was very short staffed in Peru this week as some offices stayed closed for most of the week or at least a good number of employees to a longer holiday. Most everyone should be back to work on Monday the 6th and we can all get back to business as normal.
The word in the trade is that demand for Peru fishmeal should pick up as other origins will just not be able to supply, some due to shortages and others due to new low fishing quotas. So, it may be that Peru will be looking for a very good season for sales. However there is just under 100,000 m/t in stock and only another 55,000 m/t if the full quota is landed which is really not a huge amount of fishmeal to cover needs until the next fishing season.
On the price side of things, with the steady drop lower in vegetable protein prices it will be interesting to see if fishmeal can continue at the current level or if there will be an overall weakness across the protein markets.
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 | 1320/1330 m/t |
| 65/66 protein | 1340/1350 m/t |
| 67 protein standard steam | 1360/1370 m/t |
| 67 protein SD 150 TVN | 1380/1390 m/t |
| 67 protein SD 120 TVN | 1400/1410 m/t |
| 67 protein SD 1000 hist, 120 TVN | 1430/1440 m/t |
| 68 protein SD 500 hist, 120 TVN | 1450/1460 m/t |
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| Fish oil, crude bulk | 1850/1900 |
| Fish oil, crude drums | 2050/2100 |
| Fish oil, flexi tank | 2000/2050 |
| Fish oil, Omega 3: 28%EPA/DHA | 2400/2500 |
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 © 2014 Wayne S. Bacon
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