Weekly report -- April 12, 2014

 

Hammersmith Marketing Ltd - Grain Trading

WEEKLY FEED GRAIN AND PROTEIN REPORT   April 12, 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 Corporate Services (Bahamas) Limited, Suite 200B, Centre of Commerce,

One Bay Street, PO Box N-3944, Nassau, Bahamas. Tel 1.242.322.6154

Email:   tradegroup@hammersmith.biz    WWW:  hammersmithltd.blogspot.com       SKYPE: bacon39a  

 

 

SECTION  :  FEED GRAINS -- VEGETABLE AND ANIMAL PROTEIN

 

From the corn point of view the WASDE report this week was a little bullish and the bullish reaction was seen for most of the week as both futures and physical prices in the USA moved higher. However, by the end of the week the corn market was back to just below where it had been prior to the report and all was like it had never happened.

 

Although the report was bullish, based on just the numbers, there are always factors beyond the numbers the will affect what happens to prices. For example, on the futures side, there are many speculators and funds on the long side who tend to take profits whenever the market moves higher and until most of these "greedy" longs are out of the futures market there is a risk of trading lower as they sell off to protect their profits.  There is a great deal of concern about what China will do in coming months and how that could affect corn demand. And then there are the good crops in South America, the expected good crops in the USA and the weakness in wheat which could make more feed wheat available. On the other side we do have the situation in the Black Sea and what it could do to long term Ukraine corn exports – but for today this seems to be a little bit of a non-event for corn as shipments just keep chugging along from the Ukraine.

 

The US has had a good increase in corn exports to countries that normally buy from the Ukraine but if you look at the Argentina lineups for corn shipments over the next few weeks then you can certainly see that US corn is going to have a fight on its hands to maintain a good share of the market.

 

As the week ended we had old crop USA soybeans dropping a little in price while new crop prices moved a little higher. Much of the drop in old crop was due to the concern about China's imports and the current problems with letters of credit. If China does cancel or roll forward old crop soybeans then this would ease the pressure on the current supply a little and move the pressure to the new crop. All this is just speculation at present but the situation in China for soybeans is quite fluid.

 

The soybean harvest in Brazil continues to be ahead of last year with about 86% harvested versus last year's 82%.

 

The USDA did announce a sale of 330,000 m/t of soybeans for the new crop to an unknown destination – probably China – but as China buys so many soybeans this is not really a market moving bit of news: unless it is combined with a cancellation of 330,000 m/t of old crop, which it was not.

 

Some experts feel that there could be continued weakness in the price for soybeans for May-July shipment but much depends on China's actions.

 

 

 

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

 

It is not always easy to come up with revised freight rates on a weekly basis, as for some destinations there is not grain activity every week. So, in some cases, the freight is a best estimate and in other it has not changed just because there is no new information.

 

US Gulf to Europe: 60/70,000	$18.00	Down $1.00
US Gulf to Egypt: Panamax	$30/32.00	Down $1.00
US Gulf other Med: 25,000 MT	$35/36.00	Down $1.00
US Gulf Israel: 50,000 MT	$31/33.00	Down $1.00
US Gulf Morocco: 25,000	$33/34.00	Down $1.00
US Gulf Turkey: 50,000	$32/34.00	Down $1.00
US Gulf Yemen 35/45.000	$46/47.00	New
US Gulf Japan: Panamax	$46/47.00	Down $1.00
US Gulf China: Panamax	$47/48.00	Down $1.00
US PNW Asia: 35/45,000 m/t	$34/36.00	Steady
US PNW Japan: 50,000+ m/t	$19/21.00	Down $4.00
US PNW China: 50,000+ m/t	$22/24.00	Down $3.00
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	Steady
France to Jordan: 50,000 m/t	$31.00	Steady
France to Saudi Arabia: 60,000 m/t	$38.00	Steady
Argentina to Europe: 50,000 m/t	$24.00	Down $1.00
Argentina to Egypt: 50,000	$34/35.00	Down $2.00
Argentina to Algeria: 25/30,000 m/t	$34/35.00	Down $1.00
Argentina to Morocco: 25,000	$33/34.00	Down $1.00
Argentina to Saudi Arabia	$43.00	Down $2.00
Argentina to Spain: 30,000	$33/34.00	Down $1.00
Brazil to Algeria: 25,000 m/t	$30/31.00	Down $2.00
Brazil to Turkey/Egypt: 50,000 m/t	$25/26.00	Down $2.00
Brazil to Morocco: 30,000 m/t	$29/30.00	Down $2.00
Brazil to Europe	$25.00	Steady
Black Sea to Spain: 30,000 m/t	$19/20.00	Down $1.00
Black Sea to Morocco: 30,000 m/t	$23/24.00	Down $1.00
Black Sea to East Med: 30,000 m/t	$15/16.00	Down $1.00
Black Sea to East Med: coaster	$23/24.00	Down $1.00
Black Sea to Saudi Arabia – Jeddah – 50k	$27/29.00	Down $2.00
Baltic Dry Index	1002	Down 203
Baltic Capesize Index	1789	Down 517
Baltic Panamax Index	782	Down   40
Baltic Handisize Index	556	Down   42

 

  

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 280>>268 Apr>>Jun	x
Wheat, USA Hard Red Winter 12 protein	USD 330>>321 Apr>>Jun	x
Wheat, Ukraine 11.5 pro, 30,000+ m/t	USD 284/290 Apr/Jun	X
Wheat, Russia 12.0 pro, 30,000+ m/t	USD 287/293 Apr/Jun	X
Wheat, soft milling, France, Rouen port	USD 294/296 Apr/Jun	X
Wheat, milling, Argentina, upriver	USD 330/336 Apr/May	X
Wheat, feed, Black Sea	USD no offers	x
Barley, France, Rouen port	USD 243/245 Apr/May	X
Barley, feed, Argentina, upriver	USD 227/235 Apr/May	X
Barley, feed, Black Sea, 30,000+	USD 235/239 Apr/May	x
Barley, feed, USA Pacific Northwest	USD 267/273	x

 

Corn, FOB NOLA USA	USD 228>>225 May/July	x
Corn, FOB USA Pacific northwest	USD 245/249 May/July	x
Corn, FOB Argentina port, upriver	USD 224>>220 Apr>>May	x
Corn, FOB Brazil port	USD 213/225 July/Aug new crop	x
Corn, FOB Black Sea, 30,000+ m/t	USD 247/255 May/Jun	x
Corn, FOB France	USD 261/264 Apr/May	x
Sorghum, FOB Texas	USD  261>>247 Apr/July	x
Sorghum, FOB Argentina port	USD  192/200 Apr/Jun	x

 

 

Soymeal,  48 protein, FOB NOLA	USD 589>>554 Apr>>Jun	x
Soymeal, 48 protein, USA, Rotterdam	USD 643>>599 Apr>>Jun	x
Soymeal, Argentina, Rotterdam	USD 587>>547 Apr>>Jun	x
Soymeal, 47 pro, FOB Argentina	USD 521>>500 May>>Jun	x
Soymeal, 48 protein, Brazil, Rotterdam	USD 576>>547 Apr>>Jun	x
Soymeal, FOB Brazil	USD 520>>483 Apr>>Jun	x
Soymeal, 48 protein, India FOB	USD 640/650	x
Soybeans, FOB NOLA	USD 576>>570 Apr>>Jun	x
Soybeans, Argentina, FOB	USD 525>>514  Apr/Jun	x
Soybeans, Brazil, FOB	USD 524>>510 Apr>>Jun	x
Soybeans, Rotterdam	USD 602>>585 Apr>>June	x
Soybeans, Black Sea	USD no offers	x

 

 

Bulk vessel shipments, minimum 5000 m/t

 

Corn Gluten Meal, USA FOB NOLA	USD   930/940 m/t  May/July	X
Corn Gluten Feed, USA FOB NOLA	USD   228/238 m/t  May/July	X
DDGS, 35 profat, USA FOB NOLA	USD   306>>298 m/t May>>July	X
DDGS, 35 profat, CNF Asia	USD   369>>361 m/t May>>July	x

 

 

DDGS prices slipped a little further this week and most experts think that there is a chance that prices can continue lower – how much lower is the big question. While most exporters are sold out into June, there are some decent price around for June/July shipment and buyers are certainly looking at that rather than paying a serious premium for anything sooner. There are some stories of domestic buyers rolling their purchases of DDGS into later periods which is making the tight supply situation a little better in the nearby.

 

For both corn gluten meal and corn gluten feed there is little or no change in the market situation. Buyers of CGM are still looking for the price to drop from the very high current level as CGM is still at a bit of a bloated premium against other alternative proteins. However, with buyers of CGM, mainly pet food people, quite willing to pay a high price for their supply, it does tend to keep prices high. As usual there is little new with corn gluten feed as it just follows along with corn prices.

 

 

Container shipments, minimum 200 m/t

 

Argentina Meat & Bone meal, 45 protein	USD 470 m/t CNF Asia
Paraguay Meat &Bone meal, 45 protein	USD 450 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 940/950 m/t CNF Asia  USD 830/850 m/t CNF Asia  USD 1100/1120 m/t CNF Asia

 

 

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

 

Meat and bone meal, USA, 50 protein	USD 570/600 m/t
Feathermeal  80 protein USA	USD 760/780 m/t
Poultry meal  57 protein, Eastern USA	USD 660/680 m/t

 

 

Animal protein prices in the USA both for the domestic market and export were higher this week as demand seems to have increased a little. However, exporters in Australia say that their prices were unchanged from a week ago as the stronger demand was already factored into the market.

 

Market experts are saying that the current strength in prices will not continue as, in the US in particular, the supply of animal proteins will soon outpace the demand as US supply always picks up in spring and summer months due to increased meat demand.

 

MBM exporters in South America are saying that they are having difficulty in booking any export business as buyers in Vietnam and Bangladesh want lower prices and there is import concern over the risk of pork traces in the beef MBM. Buyers in Bangladesh now need guarantee of 100 percent beef with no risk of pork and want sellers to indemnify them against any product rejection on arrival.

 

 

 

SECTION 2 --- FISHMEAL COMMENTS AND PRICES: PERUVIAN

 

PERU "INDICATION" FISHMEAL PRICES:

 

At long last there is some fishing in the south of Peru against their 400,000 m/t quota. The catch in the southern ports seems to be averaging about 8,000 m/t per day which is not too bad for the area. There is still about 345,000 m/t of southern quota left that runs to the end of October, so lots of time to catch some fish – if the fish and the weather both co-operate.

 

Prices quoted in Peru are all up by USD 20 to 30 m/t but there is not much buying activity going on as China seems to be out of the market for now. Of course this is not too surprising as China stocks are good and the weekly take-away in China is not all that fantastic. Seems that most major buyers are just waiting to see exactly what the new Peru fishing quota will be before they jump into the market. Of course, buyers are hoping for a higher quota and lower prices but there is no guarantee that this will happen.

 

There was some good news on the El Nino front this week, as it looks like the chances of a serious event in Peru over the next few weeks is very limited but there could be some chance of an "event" later in 2014 – only time will tell.

 

I see in their weekly report this week that MSI Ceres has a "once in a lifetime" free subscription offer for their Weekly Fishmeal Market Report. It seems that all one has to do is to send a request to msiceres@gmail.com in order to take advantage of their offer.    

 

Chile had quite a good fishing week last week with a total catch of about 165,000 m/t. Chile exports prices for 67 Prime and Super Prime 67 are running at about USD 20/30 m/t lower than Peru but then Chile has something to sell while Peru does not.

 

 

 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	1450/1470 m/t
65/66 protein	1500/1520 m/t
67 protein standard steam	1540/1560 m/t
67 protein SD 150  TVN	1560/1580 m/t
67 protein SD 120 TVN	1580/1600 m/t
67 protein SD 1000 hist, 120 TVN	1600/1620 m/t
68 protein SD 500 hist, 120 TVN	1620/1640 m/t
Fish oil, crude bulk	1950/2000
Fish oil, crude drums	2150/2200
Fish oil, flexi tank	2100/2150
Fish oil, Omega 3: 28%EPA/DHA	2600/2800

 

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