Hammersmith Marketing Ltd - Grain Trading
WEEKLY FEED GRAIN AND PROTEIN REPORT May 31, 2014
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SECTION 1: FEED GRAINS -- VEGETABLE AND ANIMAL PROTEIN
Looking at the USA futures price changes at the end of the week it looks like a down and downer week for most everything as corn, soybeans and wheat all trade quite a bit lower with only soymeal being the exception with a smaller drop in prices.
With the corn planting back to about where it should be there is little reason for anyone to be expecting higher prices due to poor planting – as may have existed a couple of weeks ago. As we know from many years in the past, US farmers seem to be able to catch up the planting in the blink of an eye – once the can get out in the fields then nothing can hold them back.
The USDA acreage report is not coming out until June 30the so there is some time yet for rumors before the actual numbers are in hand but the experts seem to think that the actual planting may be a little lower than expected.
On the weather side on things there is quite a bit of rain in the forecast – just what is needed for seeds in the ground. There is little or no bad news in the weather this week that would push corn price higher.
Soybean prices were down on the week but as has been normal for weeks now the old crop soybeans were not down nearly as much as the new crop. The continuing tightness in old crop soybeans is just not going away and there is still a USD 75 m/t premium to pay for most old crop beans. Of course the same situation exists in soymeal where the new crop production is quoted at USD 50 to 70 m/t less than current supply. It is certainly not hard to understand why the USA is a good market, for now, for Brazilian soybeans.
All the experts are saying that the 2014 soybean production is going to be at very high levels and that it is going to be difficult for any prolonged rally in soybeans or soymeal --- assuming that there is no disaster with the weather or with China.
As with corn, the US weather for soybeans is just great with no bad weather news seeming to be lurking over the next couple of weeks.
So, probably lower on beans and meal until we get the next news that will support higher prices.
USA Crop Progress report – May 27, 2014
| Product | Last year % | Last week % | This week % | 5 year Average % |
| Corn planted | 84 | 73 | 88 | 88 |
| Soybeans planted | 41 | 33 | 59 | 56 |
| Sorghum planted | 42 | 39 | 46 | 47 |
| Wheat planted | 77 | 49 | 74 | 82 |
USA Crop condition report - May 27, 2014 – all in percentages
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| Very poor | Poor | Fair | Good | Excellent |
| Wheat - winter | 22 | 22 | 26 | 24 | 6 |
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Estimated Bulk Grain freight in USD per m/t, basis heavy grains
| US Gulf to Europe: 60/70,000 | $17.00 | Up $1.00 | X |
| US Gulf to Spain: 30,000 m/t | $28/29.00 |
| x |
| US Gulf to Egypt: Panamax | $29/30.00 | Up $1.00 | x |
| US Gulf other Med: 25,000 MT | $35/36.00 | Up $1.00 | x |
| US Gulf Israel: 50,000 MT | $31/32.00 | Up $1.00 | x |
| US Gulf Morocco: 25,000 | $34/35.00 | Up $2.00 | x |
| US Gulf Nigeria: 30,000 m/t | $39/40.00 | Up $1.00 | x |
| US Gulf Turkey: 50,000 | $32/33.00 | Up $1.00 | X |
| US Gulf Yemen 35/45.000 | $45/46.00 |
| x |
| US Gulf Japan: Panamax | $47/48.00 | Up $1.00 | x |
| US Gulf China: Panamax | $44/45.00 |
| x |
| US PNW Asia: 35/45,000 m/t | $35/37.00 | Up $1.00 | x |
| US PNW Japan: 50,000+ m/t | $24/25.00 | Up $1.00 | x |
| US PNW China: 50,000+ m/t | $24/25.00 | Up $1.00 | x |
| France/Germany to Algeria: 30,000 m/t | $23.00 |
| X |
| France/Germany to Morocco: 30,000 m/t | $24.00 |
| x |
| France/Germany to Yemen: 30,000 m/t | $41.00 |
| x |
| France/Germany to Egypt: 50,000 m/t | $23.00 |
| x |
| France/Germany to Jordan: 35/45,000 m/t | $28.00 |
| x |
| France/Germany to Saudi Arabia: 50/60,000 | $34.00 |
| x |
| Argentina to Europe: 60,000 m/t | $21/22.00 |
| x |
| Argentina to Egypt: 50,000 m/t | $31/32.00 |
| x |
| Argentina to Algeria: 25/30,000 m/t | $33/34.00 | Up $1.00 | x |
| Argentina to Morocco: 25,000 m/t | $32/33.00 |
| x |
| Argentina to Saudi Arabia | $43.00 |
| x |
| Argentina to South Africa 30,000 m/t | $31/32.00 |
| x |
| Argentina to Spain: 30,000 m/t | $32/33.00 |
| x |
| Brazil to Algeria: 25,000 m/t | $30/31.00 |
| x |
| Brazil to China: 55,000 m/t | $36/37.00 |
| x |
| Brazil to Turkey/Egypt: 50,000 m/t | $24/25.00 |
| x |
| Brazil to Morocco: 30,000 m/t | $30/31.00 |
| x |
| Brazil to Europe | $25.00 |
| x |
| Black Sea to Spain: 30,000 m/t | $17/18.00 |
| x |
| Black Sea to Morocco: 30,000 m/t | $21/22.00 |
| x |
| Black Sea to Tunisia/Algeria: 30,000 | $19/20.00 |
| x |
| Black Sea to East Med: 30,000 m/t | $13/14.00 |
| x |
| Black Sea to East Med: coaster | $25/26.00 |
| x |
| Black Sea to Saudi Arabia – Jeddah – 50k | $25/27.00 |
| x |
| Baltic Dry Index | 940 | Down 24 | x |
| Baltic Capesize Index | 1379 | Up 21 | x |
| Baltic Panamax Index | 904 | Down 97 | x |
| Baltic Handisize Index | 484 | Up 4 | x |
*** see sources note
FOB port or location specified. Prices in US$, 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 256/274 Jun/Sep | x |
| Wheat, USA Hard Red Winter 12 protein | USD 323/330 Jun/Sep | X |
| Wheat, Ukraine 11.5 pro, 30,000+ m/t | USD 258/261 Aug new crop | x |
| Wheat, Russia 12.0 pro, 30,000+ m/t | USD 260/263 July/Aug new crop | x |
| Wheat, soft milling, France, Rouen port | USD 267/270 Jun/July | x |
| Wheat, milling, Argentina, upriver | USD 355/360 June/July | x |
| Wheat, feed, Black Sea | USD 238/242 July/Aug new crop | x |
| Wheat Bran, Black Sea | USD 230/240 Jun/Aug | x |
| Barley, France, Rouen port | USD 219/221 Jun/July | x |
| Barley, feed, Argentina, upriver | USD 220/228 Jul/Aug | x |
| Barley, feed, Black Sea, 30,000+ | USD 225/232 Jun/July new crop | x |
| Barley, feed, USA Pacific Northwest | USD 275/280 | x |
| Corn, FOB NOLA USA | USD 224>>214 Jun/July | x |
| Corn, FOB USA Pacific northwest | USD 229/232 Jun/July | x |
| Corn, FOB Argentina port, upriver | USD 222>>210 Jun/Aug | x |
| Corn, FOB Brazil port | USD 206/211 July/Aug new crop | x |
| Corn, FOB Black Sea, 30,000+ m/t | USD 242/247 Jun/July | x |
| Corn, FOB France | USD 237/240 Jun/July | x |
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| Sorghum, FOB Texas | USD 237/239 July/Sept | x |
| Sorghum, FOB Argentina port | USD 183/191 Jun/Aug | x |
| Soymeal, 48 protein, FOB NOLA | USD 588>>572 Jun>>July | x |
| Soymeal, 48 protein, USA, Rotterdam | USD 643>>612 Jun>>July | x |
| Soymeal, Argentina, Rotterdam | USD 585>>580 Jun>>July | x |
| Soymeal, 47 pro, FOB Argentina | USD 546>>498 Jun>>Aug | x |
| Soymeal, 48 protein, Brazil, Rotterdam | USD 572>>566 Jun>>July | x |
| Soymeal, FOB Brazil | USD 520>>499 Jun>>Aug | x |
| Soymeal, 48 protein, India FOB | USD 653/665 | x |
| Soybeans, FOB NOLA | USD 575>>566 Jun>>July | x |
| Soybeans, Argentina, FOB | USD 540>>505 Jun>>July | x |
| Soybeans, Brazil, FOB | USD 525>>497 Jun>>July | x |
| Soybeans, Rotterdam | USD 591>>583 Jun>>July | x |
| Soybeans, Black Sea | USD 540/550 | x |
*** see sources note
Bulk vessel shipments, minimum 5000 m/t
| Corn Gluten Meal, USA FOB NOLA | USD 880/900 m/t Jun/Aug | x |
| Corn Gluten Feed, USA FOB NOLA | USD 216/223 m/t Jun/Aug | x |
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| DDGS, 35 profat, USA FOB NOLA | USD 272>>267 m/t Jun>Aug | x |
| DDGS, 35 profat, CNF Asia | USD 345>>341 m/t Jun>>Aug | x |
*** see sources note
There was more weakness in all corn by-products this week in the domestic USA market but overall not much change in the export markets – at least no serious change until you get out a few weeks where export supply is more readily available.
The US Grains Council reported this week that the DDGS July/August prices are dropping even though this drop is well before the new crop corn harvest. Of course, as domestic demand slips a little bit in the summer, the export buyers able to step in a find the odd price bargain.
The trade seems to feel that there is a good level of export demand just sitting and waiting for lower prices – of course what they don't know is how much lower the buyers need before buying.
There was also a decent drop in both corn gluten meal and corn gluten feed export prices this week but with corn gluten meal and the rally in fishmeal prices there is a good chance that there will not be too much weakness in any protein related markets. Corn gluten feed and follow corn prices lower but corn gluten meal may not.
Container shipments, minimum 200 m/t
| Argentina Meat & Bone meal, 45 protein | USD 500/510 CNF Asia |
| Paraguay Meat &Bone meal, 45 protein | USD 430/450 m/t CNF Asia |
| Australian MBM 45 protein Australian MBM 50 protein Australian Feathermeal, 80 protein Australian Poultry Meal, pet food | USD 600/620 m/t CNF Asia USD 650/670 m/t CNF Asia USD 860/870 m/t CNF Asia USD 1050/1080 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 660/690 m/t CNF Asia USD 910/940 m/t CNF Asia USD 800/830 m/t CNF Asia USD 1100/1130 m/t CNF Asia |
*** see sources note
The following indications are at producer's factory, ex-works in bulk
| Meat and bone meal, USA, 50 protein | USD 510/530 m/t |
| Feathermeal 80 protein USA | USD 740/760 m/t |
| Poultry meal 57 protein, Eastern USA | USD 660/680 m/t |
*** see sources note
The feeling in Asia is that meat and bone meal prices are moving lower, which will probably not last too long with fishmeal moving up strongly. MBM bids in Asia are off by about USD 20 m/t but the sellers are not too willing to sell at lower levels – at least not yet. Feathermeal prices were steady to perhaps a little lower – maximum USD 10 m/t lower.
In the USA domestic market, it is reported that most animal protein items are feeling weak with both domestic feathermeal and poultry meal feeling a tad top-heavy. A couple of trade reports did say that both should move lower in the next few weeks but that the MBM situation may not be the same and that MBM should be steady.
SECTION 2 --- FISHMEAL COMMENTS AND PRICES: PERUVIAN
Fishing in Peru, even with the odd one day stoppage, is not too bad with the total landings up to 670,000 m/t by the 29th of May in the main northern region, leaving 1.86 million m/t still to land. In the south the catch is up to 305,000 m t which leaves about 125,000 m/t on the quota of 430,000.
Experts on the trade are saying that it is not too likely that the entire quota can be caught in the time remaining – this due to the lower than expected daily catch levels in May. Even the government is saying that the catch may be no more than 1.9 million m/t, far below the 2.5 million m/t quota. We now have a situation where the supply could be less than had been expected and buyers are out in force trying to cover some requirements while producers are not too happy to be selling much with the supply tightening and the demand increasing.
Prices in Peru are up very strongly as buyers are bidding up the market in trying to convince sellers to book some business. There is quite a bit of difference of opinion on exactly how much fishmeal is really available with some "experts" saying that most everything is sold while others say that unsold stocks are building. If you look at the significant rally in prices in the past few days it would seem to favor a smaller availability.
Depending on who you talk to or what you read, the prices in Peru are up USD 50 or USD 100 or USD 125 m/t. There was a report in the press that the super price 68 protein is now being bid at USD 1800 m/t, much higher than the prices below.
While supply is a good chunk of the rally there is also a problem with the quality in some grades as producers are having some difficult in making higher grades of fishmeal due to the smaller size of fish being landed and increased levels of TVN and histamine. So, more fishmeal is having to be marketed as lower grade material which makes buying more difficult for those buyers that need low TVN and histamine.
The situation today would seem to point toward higher prices and tighter supplies from Peru in coming months, which is something that few wanted to see -- buyers because they don't want higher prices and sellers because, even with higher prices, the lower turnover does not keep the factories working or generate much in the way of profits. You see a 10 percent increase in prices does not cover the losses when the catch drops by 25 percent.
PERU "INDICATION" FISHMEAL PRICES:
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 |
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| 65 protein | 1570/1580 m/t |
| 65/66 protein | 1590/1600 m/t |
| 67 protein standard steam | 1600/1610 m/t |
| 67 protein SD 150 TVN | 1660/1670 m/t |
| 67 protein SD 120 TVN | 1680/1690 m/t |
| 67 protein SD 1000 hist, 120 TVN | 1700/1710 m/t |
| 68 protein SD 500 hist, 120 TVN | 1720/1730 m/t |
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| Fish oil, crude bulk | 1900/2000 |
| Fish oil, crude drums | 2100/2200 |
| Fish oil, flexi tank | 2050/2150 |
| Fish oil, Omega 3: 28%EPA/DHA | 2600/2800 |
*** see sources note
INFORMATION: gtee = guarantee, TVN = total volatile nitrogen, hist = histamine,
FAQ = fair average quality (normally flame or hot air dried), SD = steam dried
Wayne Bacon
*** sources for information for the Weekly Report:
US Grains Council --- www.grains.org,
International Grains Council – www.igc.int
US Wheat -- www.uswheat.org ,
France Agrimer – www.franceagrimer.fr
EU DG Agri -- ec.europa.eu/agriculture/index_fr.htm,
Commodity 3 -- http://www.commodity3.com/
Newedge Group -- www.newedge.com,
The Jacobsen Report -- https://www.thejacobsen.com
MSI Ceres Peru -- http://www.msiceres.com,
International Brokers Group S.A.C, Peru.
And many, many, many more
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
