Weekly report -- March 08, 2014

 

 

Hammersmith Marketing Ltd - Grain Trading

WEEKLY FEED GRAIN AND PROTEIN REPORT   March 08, 2014

 

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Note: this report can be translated into almost any language on our blog. If you need another language just access the blog at Hammersmith.blogspot.com and click on the translate button to obtain a Google translated version of the report. Google Translate is not perfect but is not too bad. I was told this week that the translation would work much better if I used short sentences and avoided any esoteric terminology but this would probably make the report too boring.  

 

 

SECTION 1:  FEED GRAINS -- VEGETABLE AND ANIMAL PROTEIN

 

This week has been the week when all prices were pushed higher by the Ukraine situation. Needless to say there is a great deal of concern in the grain markets about what is happening in the Black Sea. All the major international grain companies have said that week that they are experiencing no problems in shipment from the Ukraine but this may just be a short-term situation as some buyers, especially in Egypt, are saying that their shipments are being delayed or cancelled. The majors seem to be meeting all their obligations out of the Ukraine but some of the smaller exporters are having a much more difficult time of it and this will affect buyers across North Africa.

 

Corn prices were up on the week by close to USD 10 m/t from most origins and it will be interesting to see on Monday if it is the Ukraine or the USDA WASDE report that sets the price direction. One can assume that if the Ukraine heats up that will push prices higher but everyone seems to be working very hard at calming the situation and limiting their sabre rattling.

 

Thinking a little about the WASDE report, the trade seems to feel that the report could be a little bullish but experts also say that the March USDA report does not usually have any major surprises or significant changes. Of course, here as winter is coming to an end there is really not a great deal of crop news from the USA that should shake things up much, but then, we could be surprised.

 

For me, I will keep my eyes on the Black Sea with only an occasional glance at the WASDE report.

 

As seems to be the pattern these days, soybeans had a strong week everywhere with prices moving up by about USD 15 m/t in most origins. The Ukraine did have an effect on soybeans, as it did on all grains, but also the trade expects the USDA report on Monday to be a bullish report with reduced South American production and lower ending stocks. Most experts do feel that production will be down some but most look only for a small drop in production. However, the Brazil government does say that the soybean harvest is ahead of last year and that, although soybean sales are down a little, an estimated 52% of the current crop has been sold.

 

Experts say that the futures market was quiet the last couple of days as everyone is waiting for the USDA WASDE report and worrying a little about the very long futures positions held the funds. According to the experts on futures the soybean market is "overbought" and without some bullish news could be in for a fall.     

 

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

 

US Gulf to Europe: 60/70,000	$21.00	Down $1.00
US Gulf to Egypt: Panamax	$33/35.00	Down $1.00
US Gulf other Med: 25,000 MT	$38/39.00	Up $1.00
US Gulf Israel: 50,000 MT	$34/36.00	Down $1.00
US Gulf Morocco: 25,000	$35/37.00	Steady
US Gulf Turkey: 50,000	$35/37.00	Down $1.00
US Gulf Japan: Panamax	$50/52.00	Steady
US Gulf China: Panamax	$50/52.00	Down $2.00
US PNW Asia: 45,000 m/t	$29/32.00	Steady
US PNW Japan: 50,000+ m/t	$26/28.00	Steady
US PNW China: 50,000+ m/t	$24/26.00	Steady
France to Algeria: 30,000 m/t	$25.00	Steady
France to Morocco: 30,000 m/t	$26.00	Steady
France to Egypt: 30,000 m/t	$27.00	Down $1.00
France to Jordan: 50,000 m/t	$32.00	Down $1.00
France to Saudi Arabia: 60,000 m/t	$39.00	Down $1.00
Argentina to Egypt: 50,000	$36/37.00	Steady
Argentina to Algeria: 25/30,000 m/t	$35/36.00	Steady
Argentina to Morocco: 25,000	$34/35.00	Steady
Argentina to Saudi Arabia	$45.00	Steady
Argentina to Spain: 30,000	$34/35.00	Steady
Argentina to Europe	$26.00	Down $1.00
Brazil to Algeria: 25,000 m/t	$31/32.00	Down $1.00
Brazil to Turkey/Egypt: 50,000 m/t	$27/28.00	Down $2.00
Brazil to Morocco: 30,000 m/t	$30/31.00	Steady
Brazil to Saudi Arabia	no price
Brazil to Europe	$28.00	Down $2.00
Black Sea to Spain: 30,000 m/t	$21/22.00	Steady
Black Sea to East Med: 30,000 m/t	$17/18.00	Steady
Black Sea to East Med: coaster	$24/25.00	Steady
Black Sea to Saudi Arabia – Jeddah – 50k	$29/31.00	Steady
Baltic Dry Index	1543	Up 285 – 22%
Baltic Capesize Index	2980	Up 1279 – up 75%
Baltic Panamax Index	1075	Down 24
Baltic Handisize Index	663	Down 6

 

  

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 285>>272 Mar>>May	x
Wheat, USA Hard Red Winter 12 protein	USD 323>>316 Mar>>May	x
Wheat, Black Sea 11.5 pro, 30,000+ m/t	USD 275/285 Mar/May	x
Wheat, soft milling, France, Rouen port	USD 299/301 Mar/May	x
Wheat, milling, Argentina, upriver	USD 325/335 Mar/May	x
Wheat, feed, Black Sea	USD 240/250 Mar/May	x
Barley, France, Rouen port	USD 262/264 Mar/May	x
Barley, feed, Argentina, upriver	USD 225/232 Mar/Apr	x
Barley, feed, Black Sea, 30,000+	USD no offers	x
Barley, feed, USA Pacific Northwest	USD 260/265	x

 

Corn, FOB NOLA USA	USD 235>>227 Mar>>May	x
Corn, FOB USA Pacific northwest	USD 255>>250 Mar>>May	x
Corn, FOB Argentina port, upriver	USD 232>>221 March>>May	x
Corn, FOB Brazil port	USD 2``/218 July/Aug new crop	x
Corn, FOB Black Sea, 30,000+ m/t	USD 233/239 Mar/May	x
Corn, FOB France	USD 258/267 Mar/May	x
Sorghum, FOB Texas, low tannin, GMO free	USD  256/259 Mar/May	x
Sorghum, FOB Argentina port, high tannin, GMO free	USD  194/199 Mar/May

 

 

Soymeal,  48 protein, FOB NOLA	USD 601>>559 Apr>>May	x
Soymeal, 48 protein, USA, Rotterdam	USD 645>>603 Mar>>May	x
Soymeal, Argentina, Rotterdam	USD 622>>549 Mar>>May	x
Soymeal, 47 pro, FOB Argentina	USD 536>>511 May>>Jun	x
Soymeal, 48 protein, Brazil, Rotterdam	USD 612>>537 Mar>>May	x
Soymeal, FOB Brazil	USD no prices
Soymeal, 48 protein, India FOB	USD 590/610	x
Soybeans, FOB NOLA	USD 572>>551 Mar>>May	x
Soybeans, Argentina, FOB	USD 540/533  May/Jun	x
Soybeans, Brazil, FOB	USD 554/559 March/May	x
Soybeans, Rotterdam	USD 606>>586 Mar>>May	x
Soybeans, Black Sea	USD 545/555 Mar/May	x

 

 

Bulk vessel shipments, minimum 5000 m/t

 

Corn Gluten Meal, USA FOB NOLA	USD   895/910 m/t  March	x
Corn Gluten Feed, USA FOB NOLA	USD   225/230 m/t  March	x
DDGS, 35 profat, USA FOB NOLA	USD   338>>327 m/t April>>May	x
DDGS, 35 profat, CNF Asia	USD   390>>380 m/t Mar>>May	x

 

 

There are no prices this week for DDGS prior to late April, as there is just nothing around for export and current demand is pushing up the May/June prices. With the Chinese buying everything in the market in DDGS (and in sorghum) it is difficult for export supply to keep up with demand. This week's run up in corn prices has also helped to move prices higher as ethanol producers are concerned that the corn price trend may have turned to higher prices and they don't want to be selling low priced DDGS in a rallying corn market.

 

Also, in the USA the logistic problems are not all solved so there is still a problem in moving DDGS , corn gluten meal and corn gluten feed to the export ports. There is less of a problem in getting corn to the ethanol facilities as most tend to be right in the corn producing areas so transport is much less of a problem.

 

The US Grains Council report this week mentions how some ethanol producers have had to slow production due to a lack of tanker railcars for ethanol shipments – if you produce less ethanol then you also produce less in the way of DDGS.

 

It looks like it is going to another couple of months before all the logistics problems are solved and the production and export shipments can fully meet demand – then we should see a little weakness in prices.

    

 

USDA Corn By-products and soymeal export --- January 2014 – in m/t – major destinations

 

	Distillers Dried Grains -- DDGS	Corn Gluten Meal	Corn Gluten Feed	Soymeal
Canada	28,600	3,900		75,500
Chile		18,400
China	344,100	4,400
Ecuador				107,600
Egypt		15,400
France				57,100
Indonesia	28,600	12,800
Ireland	35,800		64,200
Israel			15,000
Italy				62,400
Japan	44,500
Mexico	140,700	7,200		92,400
Morocco				54,210
Philippines				243,800
South Korea	78,000		25,100	113,200
Spain				71,600
Spain	21,900
Taiwan	24,300
Thailand	22,600
Venezuela				57,000
Vietnam	48,500			63,400

 

 

Container shipments, minimum 200 m/t

 

Argentina Meat & Bone meal, 45 protein	USD 470/480 m/t CNF Asia
Paraguay Meat &Bone meal, 45 protein	USD 440/450 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	USD 590/610 m/t CNF Asia USD 640/660 m/t CNF Asia USD 830/850 m/t CNF Asia USD 1020/1040 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 650/670 m/t CNF Asia USD 870/890 m/t CNF Asia USD 720/740 m/t CNF Asia USD 1000/10200 m/t CNF Asia

 

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

 

Meat and bone meal, USA, 50 protein	USD 530/550 m/t
Feathermeal  80 protein USA	USD 710/720 m/t
Poultry meal  57 protein, Eastern USA	USD 580/600 m/t

 

 

Animal protein prices, like most proteins, are all higher this week, pushed up mainly by the rally in soybean prices which is part of the Ukraine effect this week. Asian prices had been looking a little weak but there was new Chinese interest in the market this week and this firmed prices up by close to USD 20 m/t.

 

The trade is saying that even with the rally in soybeans/meal the premium in world markets for animal proteins looks to be too high and it may be the time for a drop in prices. Of course, with little or no fishmeal available the prices of animal protein prices could be staying up due to demand caused by the lack of available fishmeal and also the sky high price of both corn gluten meal and DDGS.

 

The trade reports out of the US suggest that US domestic prices for animal proteins should take a dip lower in coming weeks and if they do this should reduce the export prices too.

 

And a wee note: the Jacobsen report this week mentions that it was March 06, 1912 when the first Oreo cookies were produced in the USA. 102 years later and I can still buy them in my local supermarket here in France. I wonder if the French disassemble their Oreos to eat like the Americans do. I know that I do it.

 

 

 

USDA Animal Protein export shipments – January 2014, in m/t – major destinations

 

	Meat and bone meal Includes poultry and pork	Feathermeal
Indonesia	5,200	2,600
Canada	3,600
China	2,600
Mexico	2,200
Chile		4,700

 

 

 

SECTION 2 --- FISHMEAL COMMENTS AND PRICES: PERUVIAN

 

PERU "INDICATION" FISHMEAL PRICES:

 

Very, very slow for business in Peru but there are some stories of new business being done for the next fishing season but not being public knowledge, at least not as yet. The government's exploratory biomass cruise is still underway with comments in the trade that the biomass looks quite good. Everyone is hoping for a good sized fishing quota for the next season, so the rumours may be more hope than fact.

 

There have been some reports in the last week on the possibility of an El Nino event for later this year and this seems to have pushed indication prices higher. Of course the prices listed below are just a best guess from the market – this with nothing to sell. However, it never seems to take much between the seasons to push indication prices higher. I guess though, with nothing left to sell you could peg the prices almost anywhere and hope that they stay high into the next season.

 

Chile is just starting to fish so there should be some updated information from there for next week – at least we should be able to get a price idea for their new season fishmeal and see how close it is to the high Peru prices.

 

All is quiet in Peru, little to sell, just the odd buyer, time to sit on the porch and read a book.

 

 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	1420/1440 m/t
65/66 protein	1450/1460 m/t
67 protein standard steam	1520/1540 m/t
67 protein SD 150  TVN	1540/1550 m/t
67 protein SD 120 TVN	1560/1570 m/t
67 protein SD 1000 hist, 120 TVN	1580/1590 m/t
68 protein SD 500 hist, 120 TVN	1600/1610 m/t
Fish oil, crude bulk	1900/1950
Fish oil, crude drums	2100/2050
Fish oil, flexi tank	2050/2100
Fish oil, Omega 3: 28%EPA/DHA	2600/2700

 

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