Weekly report -- Jan 11, 2014

 

 

Hammersmith Marketing Ltd - Grain Trading

WEEKLY FEED GRAIN AND PROTEIN REPORT   January 11, 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  

 

 

SECTION 1:  FEED GRAINS -- VEGETABLE AND ANIMAL PROTEIN

 

Surprise, surprise, as the USDA WASDE report finds that the 2013 corn yields in the USA are actually lower than everyone, including the USDA, had thought. The drop in yields is probably not enough to make the market suddenly run much higher but it could just be enough to put a floor on prices. Not that there is going to be any shortage of corn just that the massive crop is not quite as massive as it had been on Thursday. The drop in yield has also affected the ending stocks levels which are now down by about 300 million bushels from the last estimate but still at levels double that of last year.

 

Over the next few days the US futures market could take a run higher as the major shorts in the market decide that they had better get out of the market before they get burned too badly. However, at least one US futures house is saying that 2014/15 corn prices will still be a near record low levels – but that is still quite a ways off.

 

On the fundamental side of corn, there was a little more rain in Argentina to help the crop along but the temperatures were a little higher than wanted for development. Brazil too had decent rains so all looks good there at present.   

 

Looking at soybeans and soymeal in the USA, the USDA WASDE report seemed to be much of a non-event as there was little in the way of changes to previous projections that would get buyers and sellers excited. Old crop soybean prices are still higher than new crop prices but that is due to shortages and logistics problems with the new crop – lots of snow and freezing temperatures tend to mess up logistics.

 

There is little or nothing to say about the South American crop as all seems to be quite good this week with rains where they were needed and sunshine as required. So, all is well in South America.

 

As to soybean/soymeal prices – no one seems to expect to see prices moving seriously higher. Perhaps a little up and down with down being more likely.   

 

 

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

 

The BDI was down strongly this week but most of the drop was due to severe weakness in Capesize prices with much less weakness grain sized vessels. The past couple of weeks of falling BDI are good examples of how the BDI is not a good guide to grain freight levels.

 

US Gulf to Europe: 60/70,000	$24.00	Down $1.00
US Gulf to Egypt: Panamax	$37/38.00
US Gulf other Med: 25,000 MT	$43/45.00	Down $1.00
US Gulf Israel: 50,000 MT	$38/39.00
US Gulf Morocco: 25,000	$43/45.00
US Gulf Turkey: 50,000	$39/40.00
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	$40.00
Argentina to Algeria: 25/30,000 m/t	$46/47.00	Up $2.00
Argentina to Morocco: 25,000	$45/46.00	Up $2.00
Argentina to Saudi Arabia	$54.00
Brazil to Algeria: 25,000 m/t	$40/41.00
Brazil to Turkey/Egypt: 50,000 m/t	$35/37.00	Down $2.00
Brazil to Morocco: 30,000 m/t	$39/40.00	Up $2.00
Brazil to Saudi Arabia	$49.00
Black Sea to Spain: 30,000 m/t	$34/37.00
Black Sea to East Med: 30,000 m/t	$30/32.00
Black Sea to East Med: coaster	$40/43.00
Baltic Dry Index	1512	Down 524 – 25.7%
Baltic Capesize Index	2101	Down 1430 – 40.4%
Baltic Panamax Index	1621	Down 129 – 7.3%
Baltic Handisize Index	730	Down 33 – 4.3%

 

  

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 259>>252 Jan/Mar
Wheat, USA Hard Red Winter 12 protein	USD 289>>285 Jan/Mar
Wheat, Black Sea 11.5 pro, 30,000+ m/t	USD 294/297
Wheat, soft milling, France, Rouen port	USD 276/278
Wheat, milling, Argentina, upriver	USD 320/335 Feb>>Apr
Wheat, feed, Black Sea	USD 270/274
Wheat bran, Black Sea	USD no prices
Barley, France, Rouen port	USD 241/243
Barley, feed, Argentina, upriver	USD 218/224 Feb/Mar
Barley, feed, Black Sea, 30,000+	USD 240/245
Barley, feed, USA Pacific Northwest	USD 240/245

 

Corn, FOB NOLA USA	USD 209>>200 Jan>>Mar
Corn, FOB USA Pacific northwest	USD 230>>223 Jan>>Mar
Corn, FOB Argentina port, upriver	USD 201/209 March/May new crop
Corn, FOB Brazil port	USD 184/193 June new crop
Corn, FOB Black Sea, 30,000+ m/t	USD 206/210 Spot/Mar
Corn, FOB France	USD 236/245 Jan/Mar
Sorghum, FOB Texas, low tannin, GMO free	USD  235/237 Jan/Mar
Sorghum, FOB Argentina port, high tannin, GMO free	USD  191/194 Feb/Mar

 

 

Soymeal,  48 protein, FOB NOLA	USD 545>>516 Jan>>Mar 2014
Soymeal, 48 protein, USA, Rotterdam	USD 578>>558 Spot>>Mar 2014
Soymeal, Argentina, Rotterdam	USD 573>>548 Spot>>Mar 2014
Soymeal, 47 pro, FOB Argentina	USD 518>>498 Feb/Mar
Soymeal, 48 protein, Brazil, Rotterdam	USD 570>>513 Spot>>Mar 2014
Soymeal, FOB Brazil	USD 520>>478 Jan/Mar
Soymeal, 48 protein, India FOB	USD 575/585
Soybeans, FOB NOLA	USD 544>>518 Jan/Mar
Soybeans, Argentina, FOB	USD 478/482 new crop May 2014
Soybeans, Rotterdam	USD 565>>530 Jan>>Mar
Soybeans, Black Sea	USD 490/500

 

 

Bulk vessel shipments, minimum 5000 m/t

 

Corn Gluten Meal, USA FOB NOLA	USD   745/760 m/t
Corn Gluten Feed, USA FOB NOLA	USD   215/220 m/t
DDGS, 35 profat, USA FOB NOLA	USD   275>>263 m/t Jan>>Mar
DDGS, 35 profat, CNF Asia	USD   330>>340 m/t Jan>>Mar

 

USA DDGS prices did slip lower this week but not nearly as much as the panic prices that were reported in the press when China rejected a little DDGS due to the MIR162 GM event. The USA domestic feed industry consumes about 75% of the total US DDGS production and even with China being a buyer of about 4 million m/t by the end of November, no one is expecting the China business to stop or there to suddenly be an unmanageable surplus of DDGS.  DDGS exports for the year are up by 27% over last year but last year was a down year and interestingly almost all the total export increase in DDGS in 2013 are related to China

 

According to trade reports on Friday the, WASDE report looks to be bullish (or at least not too bearish) for all corn and corn by-products so prices may not be too inclined to go any lower.

 

Corn gluten feed exports are also up on the year by 20% but this only represent 120,000 m/t not the extra 2 million m/t of DDGS. USA corn gluten meal exports are also up this year by about 14% or 115,000 m/t in total. So, overall all corn by products are having a very good year.

 

Looking at prices, if corn has reached the bottom due to new WASDE estimates then it is also likely that there will be little or no weakness in by-product prices.

 

 

 

 

USA Corn by-product exports – Jan/Nov 2013 – in m/t – major destinations

 

	Distillers Dried Grains – DDGS	Corn Gluten Feed	Corn Gluten Meal
Canada	449,500	26,700	60,800
Chile			99,000
China	3,936,800
Colombia		25,400	71,100
Egypt	97,300		114,900
Indonesia	199,000		244,200
Ireland	222,100	299,400
Israel	103,600	140,300	20,100
Japan	342,600		36,900
Malaysia			62,900
Mexico	1,197,700	18,500	68,400
Morocco	113,500	46,700	4,700
Portugal		25,000
South Korea	349,600	31,200	11,400
Spain		22,000
Taiwan	214,100		30,600
Thailand	236,000		30,800
Turkey	276,600	128,200
UK		25,000	4,900
Vietnam	334,400		25,600

 

 

Container shipments, minimum 200 m/t

 

Argentina Meat & Bone meal, 45 protein	USD 440/450 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  no prices USD  no prices USD  no prices
Australian MBM 45 protein    Australian MBM 50 protein    Australian Feathermeal, 80 protein    Australian Poultry meal, pet food grade	USD 570/590 m/t CNF Asia USD 620/640 m/t CNF Asia USD 650/660 m/t CNF Asia USD 870/880 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 780/800 m/t CNF Asia USD 620/640 m/t CNF Asia USD 850/870 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

 

 

Animal protein prices to Asia have moved higher this week but much of the increase is due to a shortage of supply due to a couple of weeks of reduced production due to the long Christmas and New Year holidays in major producing countries. Some market experts feel that the USD 20 jump in most prices this week will fall off in the next few weeks as supply picks up once again.

 

USA export prices have also moved higher this weeks with that being due to good domestic demand and internal shipping problems in the USA due to the severe cold and snow that has been seen in much of the country.

 

USA feathermeal prices are expected to stay firm due to very good demand, both domestic and export, but there is a feeling that MBM prices could slide a little lower in order to get to a more normal ratio against soymeal prices

 

Animal protein supplies are expected to increase in January and this should put some pressure on prices, unless there is a good increase in demand.

   

 

USA animal protein exports – Jan/Nov 2013 – in m/t – major destinations

 

	Meat and Bone Meal Incl Pork and Poultry	Feathermeal
Mexico	25,900	106,900
Indonesia	63,700
Chile		48,500
Canada	40,300	8,800
Philippines	29,200
China	20,300
Thailand	14,300
Guatemala	11,800
Vietnam		4,400

 

 

SECTION 2 --- FISHMEAL COMMENTS AND PRICES: PERUVIAN

 

PERU "INDICATION" FISHMEAL PRICES:

 

Fishing has not picked up all that much in Peru as the daily fleet size is still down around 100 vessels and the daily catch has trouble getting up to 20,000 m/t. however, as the week finished there is only about 100,000 m/t left to go to finish the quota. So the big guys are all done with their quotas and it is only a few stragglers that are now finishing off.

 

The trade in Peru reports that business has picked up and that all the buyers and sellers are back looking to do a little business. The unsold stock level in Peru is estimated at about 115,000 m/t with only another 20/23.000 m/t still to come from the balance of the quota.

 

With so little left to sell and quite a while until the next fishing season, it is very difficult to see any reason for fishmeal prices to go any lower. At present the prices are not doing anything much but as the small remaining stock disappears the prices are most likely going to go higher.

 

It is also reported in the fishmeal trade that there is not much available from other sources, like North Atlantic, so it is possible that all world fishmeal prices may be moving higher in coming weeks.

 

    

 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	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
Fish oil, crude bulk	1900/1950
Fish oil, crude drums	2100/2150
Fish oil, flexi tank	2050/2100
Fish oil, Omega 3: 28%EPA/DHA	2500/2550

 

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