Weekly report -- Feb 08, 2014

 

 

 

Hammersmith Marketing Ltd - Grain Trading

WEEKLY FEED GRAIN AND PROTEIN REPORT   February 08, 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

 

At the end of this week, we had higher prices for all grains, oilseeds and protein meals in the USA and to a large degree everywhere.

 

Corn prices tended to move higher on the weather situation in South America and the adverse effect that may be seen on the corn crop plus a great deal of anticipation over what the USDA report will show on Monday. It seems that the market is expecting the USDA to lower corn ending stocks which, if they do, could push prices a little higher. The expectation is also that the USDA will lower their forecast of Argentina/Brazil corn production.

 

There were a few USDA export sales announcement for corn this week to "unknown destinations" which makes one wonder if this is actually additional business for Spain or Egypt as they have been good buyers from the US since the Black Sea corn prices moved higher.

 

So, Monday is the big day for now with USDA reports and then too an update on South American weather. As I sit here today the South American weather looks bearish while the USDA report could be bullish – it will be an interesting Monday.

 

On the soybean side, we also had a good up week with soybeans moving higher by almost USD 20 m/t and soymeal also up by close to USD 20 m/t. Much of the rally this week seems to be in anticipation of what the USDA will say next week with many of the experts feeling that USDA exports will continue higher while the ending stocks drop lower. According to the trade, it would be welcome for the Chinese to cancel some US soybeans and move business to Brazil….supply is just too tight in the US.    

 

Reports from Brazil say that early soybeans are heading to export ports with this being close to a month ahead of the normal early shipment time. Weather is not too bad in South America but there are a few dry areas in Brazil that could use some rain but then, with early harvest rushing along, the weather gets to be less and less of a factor. The next big problems will be the annual logistics problems in Brazil export ports.

 

Overall, no one seems to feel that there is much room for a serious rally in soybeans or soymeal. It looks like supplies from Argentina and Brazil will be just too big this year which should just overcome the current tightness in soybean/soymeal supply.

 

 

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

 

All grain rates have dropped lower, as the fall in all the Baltic indexes in the past couple of week is now appearing in the physical side of the market

 

US Gulf to Europe: 60/70,000	$24.00	steady
US Gulf to Egypt: Panamax	$36/37.00	Down $2.00
US Gulf other Med: 25,000 MT	$41/43.00	Down $2.00
US Gulf Israel: 50,000 MT	$37/39.00	Down $2.00
US Gulf Morocco: 25,000	$40/41.00	Down $5.00
US Gulf Turkey: 50,000	$38/39.00	Down $2.00
US Gulf Japan: Panamax	$52/54.00	Down $3.00
US PNW Asia: 45,000 m/t	$26/28.00	steady
US PNW Japan: 50,000+ m/t	$26/28.00	Down $2.00
France to Algeria: 25,000 m/t	$26.00	Down $1.00
France to Saudi Arabia: 60,000 m/t	$42.00	New
Argentina to Egypt: 50,000	$38.00	Down $2.00
Argentina to Algeria: 25/30,000 m/t	$42/44.00	Down $2.00
Argentina to Morocco: 25,000	$40/42.00	Down $2.00
Argentina to Saudi Arabia	$50.00	steady
Brazil to Algeria: 25,000 m/t	$37/38.00	Down $1.00
Brazil to Turkey/Egypt: 50,000 m/t	$33/34.00	Steady
Brazil to Morocco: 30,000 m/t	$36/37.00	Steady
Brazil to Saudi Arabia	$45.00	Steady
Black Sea to Spain: 30,000 m/t	$26/28.00	Down $2.00
Black Sea to East Med: 30,000 m/t	$23/24.00	Down $2.00
Black Sea to East Med: coaster	$31/34.00	Down $4.00
Black Sea to Saudi Arabia – Jeddah – 50k	$31/33.00	New
Baltic Dry Index	1091	Down 19
Baltic Capesize Index	1588	up 64
Baltic Panamax Index	1337	up 33
Baltic Handisize Index	674	Down  10

 

  

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 264>>251 Feb>>Apr
Wheat, USA Hard Red Winter 12 protein	USD 296>>292 Feb>>Apr
Wheat, Black Sea 11.5 pro, 30,000+ m/t	USD 265/270 Feb/Apr
Wheat, soft milling, France, Rouen port	USD 269/271
Wheat, milling, Argentina, upriver	USD 330>>320 Feb>>Apr
Wheat, feed, Black Sea	USD 235/245
Wheat bran, Black Sea	USD no prices
Barley, France, Rouen port	USD 241/243
Barley, feed, Argentina, upriver	USD 218/225 Feb/Apr
Barley, feed, Black Sea, 30,000+	USD 240/245 Feb/Apr
Barley, feed, USA Pacific Northwest	USD 245/250

 

Corn, FOB NOLA USA	USD 218>>211 Feb>>May
Corn, FOB USA Pacific northwest	USD 234>>231 Feb>>May
Corn, FOB Argentina port, upriver	USD 214>>208 March>>May
Corn, FOB Brazil port	USD 192/197 July/Aug new crop
Corn, FOB Black Sea, 30,000+ m/t	USD 219/223 Spot/Apr
Corn, FOB France	USD 241/248 Feb/Apr
Sorghum, FOB Texas, low tannin, GMO free	USD  240/244 Feb/May
Sorghum, FOB Argentina port, high tannin, GMO free	USD  196/200 Feb/Apr

 

 

Soymeal,  48 protein, FOB NOLA	USD 592>>580 Feb>>Apr
Soymeal, 48 protein, USA, Rotterdam	USD 567>>554 Feb>>Apr
Soymeal, Argentina, Rotterdam	USD 592>>522 Feb>>Apr
Soymeal, 47 pro, FOB Argentina	USD 475>>468 May>>Jun
Soymeal, 48 protein, Brazil, Rotterdam	USD 570>>499 Feb>>Apr
Soymeal, FOB Brazil	USD 503>>460 Mar>>May
Soymeal, 48 protein, India FOB	USD 570/580
Soybeans, FOB NOLA	USD 558>>532 Feb>>Apr
Soybeans, Argentina, FOB	USD 494/498  May/Jun
Soybeans, Rotterdam	USD 577>>529 Feb>>Apr
Soybeans, Black Sea	USD 515/525 Feb/Apr

 

 

Bulk vessel shipments, minimum 5000 m/t

 

Corn Gluten Meal, USA FOB NOLA	USD   790/800 m/t
Corn Gluten Feed, USA FOB NOLA	USD   225/230 m/t
DDGS, 35 profat, USA FOB NOLA	USD   310>>292 m/t Feb>>Apr
DDGS, 35 profat, CNF Asia	USD   352>>346 m/t Feb>>Apr

 

DDGS prices for Feb/Mar took a run higher by almost USD 10 m/t, as supply was tight and demand remained very good, but then we also had corn prices move up by USD 5 m/t. The added factor for all export prices for proteins is the difficulty in internal US logistics and the problems in getting any stock into an exportable position. There was a dearth of Asian buyers in the market due to the Chinese New Year holidays but they will be back this week but for all corn by-products they are going to have to look for shipments in late March or perhaps only April/May as stocks for any earlier shipments seem to be very hard to find.

 

One of the trade reports this week was commenting on the ever growing shortage of container and, as much of the corn by-product business ships in containers this will tend to push up freight rates for DDGS, CGF and CGM.

 

Corn gluten meal (CGM) moved up quite strongly this week as it followed the increase in soymeal prices and one should expect that as long as soymeal is moving higher then CGM  and to some degree DDGS will follow right along.    

 

 

USA exports of corn by-products and soymeal – 12 months 2013, in m/t, major destinations

 

	Distillers Dried Grains -- DDGS	Corn Gluten Fed	Corn Gluten Meal	Soymeal
Canada	474,500	27,500	67,100	894,500
Chile			99,000
China	4,488,300
Columbia	93,700	28,100	80,100	326,100
Denmark				256,500
Dominican Rep				331,600
Ecuador	13,200			366,500
Egypt	113,700	25,100	130,600	328,500
Guatemala	51,600		11,900	317,300
Indonesia	238,400		256,400
Ireland	225,400	312,300
Israel	131,700	163,100		101,400
Israel	131,700
Italy				223,700
Japan	383,200			179,800
Malaysia			66,600
Mexico	1,284,500		74,900	1,269,500
Morocco	113,500	46,700		218,000
Philippines	61,700			1,121,300
Poland				391,200
Portugal		25,000		34,800
South Korea	396,400	31,900	12,200
Spain	12,700	22,000		197,200
Taiwan	239,800		34,600
Thailand	271,300		34,000
Turkey	289,400	128,200		412,500
Venezuela				755,100
Vietnam	356,000		27,300	376,300

 

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 580/600 m/t CNF Asia USD 630/660 m/t CNF Asia USD 780/800 m/t CNF Asia USD 910/930 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 590/620 m/t CNF Asia USD 780/800 m/t CNF Asia USD 620/640 m/t CNF Asia USD 880/900 m/t CNF Asia

 

The following indications are at producer's factory, ex-works in bulk

 

Meat and bone meal, USA, 50 protein	USD 500/520 m/t
Feathermeal  80 protein USA	USD 660/680 m/t
Poultry meal  57 protein, Eastern USA	USD 560/580 m/t

 

There has not been too much activity in animal proteins in the US in the past couple of week which has been due mainly to the very bad weather across much of the country. This weather has also reduced export supplies and pushed prices up a little. There have not been too many export buyers sniffing around as many were off work for Chinese New Year but this week should see more export buyers in the USA market.

 

Prices in Australia and New Zealand were a little stronger this week as domestic demand had increased and this always pushes export prices up a little. Of course, stronger soymeal prices have also helped to push up world protein prices.

 

On the overall US protein meal export side, meat and bone meal exports for 2013 were at exactly the same level as for 2012. However a 60% drop in shipments to Mexico was offset by increased shipments to Asian destinations. On the feathermeal side, exports were up by 95% with Indonesia and Chile showing most of the increase.  

 

 

USA exports of animal proteins – 12 months 2013 – in m/t – major destinations

 

	Meat and Bone Meal Incl Pork and Poultry Meal	Feathermeal
Canada	43,400	9,000
Chile		53,900
China	23,400
Guatemala	12,600
Indonesia	69,300	109,800
Mexico	27,200
Philippines	29,700
Thailand	15,000
Vietnam		4,400

 

 

 

 

SECTION 2 --- FISHMEAL COMMENTS AND PRICES: PERUVIAN

 

PERU "INDICATION" FISHMEAL PRICES:

 

According to the Peruvian Ministry of Production, 99.1 percent of the fishing quota was landed by the end of the period this is a tad higher than the trade estimates at about 96% landed but then isn't the government always right. Now we just need to wait to see what the quota will be for the next fishing season – everyone is expecting at least 2 million m/t of fish.

 

With the Chinese New Year period just ending, the fishmeal business was quite slow last week but we will see people back in the market this week. The problem for buyers is that there is very little available stock in Peru and they will probably have to take whatever they can find. This situation of no supply will certainly tend to make prices move higher over the next few weeks as buyers wrestle for the last few lots of fishmeal.

 

According to official government statistics from Peru the total 2013 fishmeal exports were close to 850,000 m/t which is down 36% from last year. The drop in exports was due to a lack of supply rather than any shortage in demand. China is still the largest buyer at about 63% of exports with the total for Germany, Chile and Japan represent another 23% of exports. So these four countries account for 86% of all fishmeal exports from Peru.

 

It was interesting to read the industries reaction to the Peruvian government's comment that 2013 had been a good year for the fishmeal industry. Producers were quick to point out that with much lower catch quota and resulting reduced exports their profits were badly squeezed or had turned to losses for the year. The industry is hoping that for 2014 the fishing quota will be much higher than the 2.7 million m/t of 2013 perhaps as high as 4.8 million m/t for the year. At this level the producers should be back into a very good profit level, even if prices do slide a bit lower with a larger quota.    

 

 

 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	1380/1390 m/t
65/66 protein	1410/1420 m/t
67 protein standard steam	1440/1450 m/t
67 protein SD 150  TVN	1460/1470 m/t
67 protein SD 120 TVN	1480/1490 m/t
67 protein SD 1000 hist, 120 TVN	1500/1510 m/t
68 protein SD 500 hist, 120 TVN	1520/1530 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	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 © 2014 Wayne S. Bacon