Weekly Report - April 05, 2014

Hammersmith Marketing Ltd - Grain Trading

WEEKLY FEED GRAIN AND PROTEIN REPORT   April 05, 2014

 

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SECTION 1:  FEED GRAINS -- VEGETABLE AND ANIMAL PROTEIN

 

The USDA report last week was only slightly bullish for corn, so during the week the futures prices moved around at USD 5.00 bushel (about USD 197 m/t) on the futures markets while export prices were about USD 30/33 m/t higher than the futures. In case anyone does not know, on a simplified basis, the futures prices are Chicago based while the export prices include the cost of delivery and loading at the export port. It is quite a long way from Chicago to New Orleans or from most USA corn farms to New Orleans.

 

Looking a bit at the USDA report, the stocks levels were slightly below what the trade had expected while the planting intentions were also just a little below the pre-report forecasts. Traders have said that with the corn stocks still at what they consider to a good level and no drop in consumption with recent increased prices that could be an indication that prices could move higher since buyers don't seem to be too concerned about a little increase in prices.

 

From here on in the grain markets will be watching the weather closely and the USA plantings along with anything exciting that may happen in Brazil and Argentina

 

A very interesting week for soybeans and soymeal as the futures market couldn't make up its mind which way to go. By the end of the week we had the old crop soybean prices up by about USD 15 m/t while new crop (September and later) was only up by about USD 4 m/t. The old crop premium over new crop is up to about USD 80 m/t for soybeans and just over USD 70 m/t for soymeal and this spread could make the old crop prices very vulnerable to a fall if there is some significant news that would affect the old crop.  The kind of thing that could cause a fall are: cancellations or switches on orders by China, increased USA imports of South American soybeans, drop in US export sales and increase selling of current stocks by farmers. Of course, none of these factors seem to be in the equation at present.

 

With the next USDA report due next week, the market is expecting that the forecasted soybean sales will increase while ending stocks will decrease and both are factors which will keep prices firm.   

 

 

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

 

US Gulf to Europe: 60/70,000	$19.00	Down $1.00
US Gulf to Egypt: Panamax	$31/33.00	down $1.00
US Gulf other Med: 25,000 MT	$36/37.00	steady
US Gulf Israel: 50,000 MT	$32/34.00	down $1.00
US Gulf Morocco: 25,000	$34/36.00	Steady
US Gulf Turkey: 50,000	$33/35.00	down $1.00
US Gulf Japan: Panamax	$47/48.00	down $1.00
US Gulf China: Panamax	$48/50.00	Down $1.00
US PNW Asia: 35/45,000 m/t	$34/36.00	Steady
US PNW Japan: 35/45,000 m/t	$24/26.00	Up $1.00
US PNW China: 50,000+ m/t	$25/27.00	Down $1.00
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	$26.00	Down $1.00
France to Jordan: 50,000 m/t	$31.00	Down $1.00
France to Saudi Arabia: 60,000 m/t	$38.00	Down $1.00
Argentina to Europe: 50,000 m/t	$25.00	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	Down $2.00
Argentina to Spain: 30,000	$34/35.00	Steady
Brazil to Algeria: 25,000 m/t	$32/33.00	Steady
Brazil to Turkey/Egypt: 50,000 m/t	$27/28.00	Down $1.00
Brazil to Morocco: 30,000 m/t	$31/32.00	Steady
Brazil to Europe	$25.00	Steady
Black Sea to Spain: 30,000 m/t	$20/21.00	Steady – improving
Black Sea to Morocco: 30,000 m/t	$24/25.00	Steady - improving
Black Sea to East Med: 30,000 m/t	$16/17.00	Steady – improving
Black Sea to East Med: coaster	$24/25.00	Steady – improving
Black Sea to Saudi Arabia – Jeddah – 50k	$29/31.00	Steady – improving
Baltic Dry Index	1205	Down 168
Baltic Capesize Index	2306	Down 251
Baltic Panamax Index	822	Down 156
Baltic Handisize Index	598	Down 51

 

  

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 279>>271 Apr>>Jun	x
Wheat, USA Hard Red Winter 12 protein	USD 338>>326 Apr>>Jun	x
Wheat, Ukraine 11.5 pro, 30,000+ m/t	USD 285/290 Apr/Jun	x
Wheat, Russia 12.0 pro, 30,000+ m/t	USD 295/300 Apr/Jun	x
Wheat, soft milling, France, Rouen port	USD 288/292 Apr/Jun	x
Wheat, milling, Argentina, upriver	USD 340/350 Apr/May	x
Wheat, feed, Black Sea	USD 260/267	x
Barley, France, Rouen port	USD 239/245 Apr/May	x
Barley, feed, Argentina, upriver	USD 227/235 Apr/May	x
Barley, feed, Black Sea, 30,000+	USD 250/258 Apr/May	x
Barley, feed, USA Pacific Northwest	USD 265/273	x

 

Corn, FOB NOLA USA	USD 230>>227 Apr>>Jun	x
Corn, FOB USA Pacific northwest	USD 256>>251 Apr>>Jun	x
Corn, FOB Argentina port, upriver	USD 225>>220 Apr>>May	x
Corn, FOB Brazil port	USD 215/222 July/Aug new crop	x
Corn, FOB Black Sea, 30,000+ m/t	USD 245/253 May/Jun	x
Corn, FOB France	USD 248/260 Apr/May	x
Sorghum, FOB Texas	USD  266>>249 Apr/July	x
Sorghum, FOB Argentina port	USD  190/198 Apr/Jun	x

 

 

Soymeal,  48 protein, FOB NOLA	USD 587>>552 Apr>>Jun	x
Soymeal, 48 protein, USA, Rotterdam	USD 641>>597 Apr>>Jun	x
Soymeal, Argentina, Rotterdam	USD 593>>560 Apr>>Jun	x
Soymeal, 47 pro, FOB Argentina	USD 523>>500 May>>Jun	x
Soymeal, 48 protein, Brazil, Rotterdam	USD 581>>545 Apr>>Jun	x
Soymeal, FOB Brazil	USD 528>>483 Apr>>Jun	x
Soymeal, 48 protein, India FOB	USD 640/650	x
Soybeans, FOB NOLA	USD 577>>570 Apr>>Jun	x
Soybeans, Argentina, FOB	USD 526>>514  Apr/Jun	x
Soybeans, Brazil, FOB	USD 525>>510 Apr>>Jun	x
Soybeans, Rotterdam	USD 597>>586 Apr>>June	x
Soybeans, Black Sea	USD 555/565 Apr/Jun	x

 

 

Bulk vessel shipments, minimum 5000 m/t

 

Corn Gluten Meal, USA FOB NOLA	USD   930/940 m/t  Apr/Jun	x
Corn Gluten Feed, USA FOB NOLA	USD   228/238 m/t  Apr/Jun	x
DDGS, 35 profat, USA FOB NOLA	USD   305>>289 m/t Apr>>Jun	x
DDGS, 35 profat, CNF Asia	USD   385>>370 m/t Apr>>Jun	x

 

 

 According to trade reports, a number of US ethanol facilities will be down for their annual maintenance in April and this may tighten up supply a little. April DDGS prices have moved a little higher but there is also little to sell for April as traders are now working May and June/July. Also buyers were staying out of the market this week hoping that corn prices might take a serious dip after the USDA planting report.

 

Both corn gluten meal and corn gluten feed showed a drop in reported prices this week but this may just be due to the increase in the accuracy of the trades reported this week. However, with the much improved domestic transport logistic in the USA it is certainly much easier to source corn gluten meal for export.

 

Looking at the US export number below it can be seen that both DDGS and corn gluten meal have a much wider import base than corn gluten feed but then CGF does have to compete with very low cost wheat bran in many destinations.

 

Experts feel that DDGS and CGF will be up and down with corn while CGM will be following corn and protein prices more than just corn. 

 

USA export shipments of vegetable proteins – 2014 to Feb 28 – in m/t – major destinations.

 

	Soymeal	Distillers Dried Grains – DDGS	Corn Gluten Meal	Corn Gluten Feed
Canada	137,900	52,900	7,200	1,700
Chile			18,400
China		815,200
Columbia	72,700	11,200	5,700	1,600
Cuba	64,000
Denmark	44,000
Ecuador	144,700
Egypt		32,000	32,100
Indonesia		46,800	26,100
Ireland		53,100		95,000
Israel				15,000
Italy	62,400
Japan		76,800	14,400
Korea, South	113,700	119,600	1,000	25,200
Malaysia			7,000
Mexico	189,700	250,300	11,300	2,400
Morocco		14,700
Philippines	351,200	17,200
Spain	112,900	21,900
Taiwan		38,100	3,700
Thailand	148,400	45,800	5,300
Turkey	93,400	17,500
Venezuela	169,000
Vietnam	125,100	115,300	3,200

 

 

Container shipments, minimum 200 m/t

 

Argentina Meat & Bone meal, 45 protein	USD 500 m/t CNF Asia
Paraguay Meat &Bone meal, 45 protein	USD 480 m/t CNF Asia
Australian MBM 45 protein    Australian MBM 50 protein    Australian Feathermeal, 80 protein    Australian Poultry Meal, pet food	USD 620/640 m/t CNF Asia  USD 680/700 m/t CNF Asia  USD 860/870 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 720/740 m/t CNF Asia  USD 920/930 m/t CNF Asia  USD 810/830 m/t CNF Asia  USD 1080/1100 m/t CNF Asia

 

 

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

 

Meat and bone meal, USA, 50 protein	USD 580/610 m/t
Feathermeal  80 protein USA	USD 740/760 m/t
Poultry meal  57 protein, Eastern USA	USD 630/650 m/t

 

 

Animal protein prices into Asia have been creeping a little higher this week as prices out of Australia have trended a little higher and USA export prices followed along. With world protein prices looking to stay firm for now it is difficult to expect any drop in animal proteins. Soymeal prices look quite strong into July 2014 and this will certainly help to keep animal protein prices from falling.

 

One of the USA trade papers was mentioning this week that it is actually better to buy feed grade poultry meal than meat and bone meal as the value, on a protein basis, is much better but while this does appear to work in domestic USA prices it does not seem to have any advantage in export prices.

 

Feathermeal prices were all over this week and it was very difficult to know if prices were going to go higher or lower as prices seemed to have about a plus/minus USD 20 m/t range in the US.  

 

Now that we know when the next fishing season will begin in Peru, perhaps a new supply of fishmeal will allow animal protein prices to Asia to slip lower. As we all know, and as show below, Asia is the main importing market for animal proteins and this is for all origins not just the USA.

 

 

USA Animal Protein exports – 2014 to Feb 28 – in m/t – major destinations

 

	Meat and bone meal Incl poultry and pork meal	Feathermeal
Canada	7,111	405
Chile		7,198
China	5,272
Ecuador	884
Guatemala	2,313
Holland	1,431
Indonesia	10,456	7,663
Mexico	4,470
Philippines	1,004
Thailand	1,250

 

 

 

SECTION 2 --- FISHMEAL COMMENTS AND PRICES: PERUVIAN

 

PERU "INDICATION" FISHMEAL PRICES:

 

 

Well, it looks like the new fishing season will begin in Peru on April 23^rd in order to get the fishing done before there could be any major El Nino effect. The actual quota amount has not been released as yet but many seem to feel that 2 million m/t, or there about, may be the maximum. The trade is hoping for a higher level than 2 mm/t but we will just have to wait to see what the powers decide.

 

The biomass review cruise is almost finished and the results should be submitted to the government of Peru upon the ships return to port in the next few days.

 

All the major Peruvian producers are back from the conference in China and according to trade reports the conference was not all that well attended by world fishmeal producers. Those who attended the conference say that it was interesting but not much, if any, business was done. So, I guess that it was one of the few conferences where one actually had to listen to the presentations.

 

There is not much of a carry-over of Peruvian fishmeal into the next season with stocks on hand almost at zero and close to 100,000 m/t of business booked for the new season. Inventories of fishmeal in China are large and local Chinese demand is down so there may not be a rush to book new shipments from Peru. Also, China is tightening up on some of its rules and regulations for feed ingredient shipments and this may complicate procedures and packaging for new fishmeal shipments.    

 

As I write this it seems that the results of the earthquakes in Chile have been minimal to the fishmeal industry and very luckily resulted in only limited injury to the population. There was concern that there could be a high level of port damage, which does not appear to be the case while the very quick evacuation of the population in threatened areas did a great deal to limit injuries. However, it is reported that some smaller fishing vessels were destroyed by the wave but with no loss of life.  

 

 

 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