Weekly report May 10, 2014

Hammersmith Marketing Ltd - Grain Trading

WEEKLY FEED GRAIN AND PROTEIN REPORT   May 10, 2014

 

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SECTION 1:  FEED GRAINS -- VEGETABLE AND ANIMAL PROTEIN

 

Well now, Friday was monthly USDA WASDE report day and, other than some surprises with world corn stocks, the report was much as the experts had been expecting. Corn world carryover stocks were a bit higher in the report due to higher numbers for China, Brazil and Argentina. USA numbers were also higher so futures prices slid lower on the day, although, on the week prices for corn were still a little higher than the previous week.

 

The planting weather in the US looks quite good for the next week or two, so farmers should have a good crack at getting the planting numbers moving higher quickly.  Trade reports estimate that corn planting could be as high as 60% in next Monday's report. American farmers can certainly plant up a storm when needed.

 

After the report and with the good planting weather, most US experts are expecting that corn prices should trend lower until the next bit of bad news hits the market. We are now into the period where US prices are going to all be driven by what is happening with the weather and how it is affecting the crop growth and expected yields.

 

One more note on corn, with the expected drop in Ukraine planting and yields for 2014 corn crop, some say as much as 22%, US corn should stay very competitive in North Africa and the Middle East for a much longer period than was originally expected for 2014.

 

On the soybean side of the WASDE report things were a tad more neutral with the major changes being in the size of US soybean imports and the world soybean production. World ending soybean stocks were forecasted to increase quite a bit from 67.0 mm/t in 2013 to 82.2 mm/t in 2014. However, all the forecasts are for the future and for the next few months US supplies will continue tight with additional imports needed from South America to try to ease the supply problems.

 

As can be seen below, the soybean planting is just getting started, so it is a little early to have much effect on prices.

 

For the next few months the old crop soybean prices should remain firm but moderated a little by imports while the expected size of the 2014 crop will probably keep late 2014 prices from increasing, that is until there is some serious weather related crop event that will shake up the market.

 

 

 

USA Crop Progress report – May 05, 2014

 

Product	Last year %	Last week %	This week %	5 year Average %
Corn planted	11	19	26	42
Soybeans planted	2	3	5	11
Sorghum planted	28	27	28	29

 

 

 

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

 

In case anyone wonders what the "x" is at the end of each line it is the method that I use to mark the prices that I have updated. Each week I erase all the x's and then as I update or review a price I put in an X, so that, hopefully, I don't miss anything.

 

US Gulf to Europe: 60/70,000	$18.00	Up $1.00	x
US Gulf to Egypt: Panamax	$29/30.00	Down $1.00	x
US Gulf other Med: 25,000 MT	$35/36.00	Up $1.00	x
US Gulf Israel: 50,000 MT	$31/33.00		x
US Gulf Morocco: 25,000	$34/35.00	Up $1.00	x
US Gulf Nigeria: 30,000 m/t	$37/38.00		x
US Gulf Turkey: 50,000	$32/34.00		x
US Gulf Yemen 35/45.000	$45/46.00		x
US Gulf Japan: Panamax	$46/47.00		x
US Gulf China: Panamax	$45/46.00	Down $1.00	x
US PNW Asia: 35/45,000 m/t	$34/36.00		x
US PNW Japan: 50,000+ m/t	$26/27.00	Up $1.00	x
US PNW China: 50,000+ m/t	$25/26.00	Up $1.00	x
France to Algeria: 30,000 m/t	$25.00		x
France to Morocco: 30,000 m/t	$26.00		x
France to Egypt: 30,000 m/t	$26.00		x
France to Jordan: 35/45,000 m/t	$31.00		x
France to Saudi Arabia: 50/60,000 m/t	$38.00		x
Argentina to Europe: 50,000 m/t	$23.00		x
Argentina to Egypt: 50,000 m/t	$32/33.00		x
Argentina to Algeria: 25/30,000 m/t	$32/33.00	Down $1.00	x
Argentina to Morocco: 25,000 m/t	$32/33.00		x
Argentina to Saudi Arabia	$43.00		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 Turkey/Egypt: 50,000 m/t	$25/26.00		x
Brazil to Morocco: 30,000 m/t	$30/31.00	Up $1.00	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	$22/23.00		x
Black Sea to East Med: 30,000 m/t	$14/15.00		x
Black Sea to East Med: coaster	$23/24.00		x
Black Sea to Saudi Arabia – Jeddah – 50k	$25/27.00		x
Baltic Dry Index	997	Down 20	X
Baltic Capesize Index	1541	Down 288	X
Baltic Panamax Index	869	Down 46	X
Baltic Handisize Index	508	Down 2	x

 

 

 

  

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 303>>291 May>>July	x
Wheat, USA Hard Red Winter 12 protein	USD 356/360 May/July	x
Wheat, Ukraine 11.5 pro, 30,000+ m/t	USD 287/290 May/Jul	x
Wheat, Russia 12.0 pro, 30,000+ m/t	USD 288/294 May/July	x
Wheat, soft milling, France, Rouen port	USD 290/293 May/July	x
Wheat, milling, Argentina, upriver	USD 340/350 May/July	x
Wheat, feed, Black Sea	USD 260/264 July	x
Barley, France, Rouen port	USD 244/247 May/July	x
Barley, feed, Argentina, upriver	USD 222/230 Jul/Aug	x
Barley, feed, Black Sea, 30,000+	USD 243/246 May/July	X
Barley, feed, USA Pacific Northwest	USD 270/275	x

 

Corn, FOB NOLA USA	USD 238>>230 May/July	x
Corn, FOB USA Pacific northwest	USD 247/249 May/July	x
Corn, FOB Argentina port, upriver	USD 238>>223 Jun/Aug	X
Corn, FOB Brazil port	USD 215/222 July/Aug new crop	x
Corn, FOB Black Sea, 30,000+ m/t	USD 246/252 May/July	x
Corn, FOB France	USD 260/263 May/July	x
Sorghum, FOB Texas	USD  258>>253 May/July	x
Sorghum, FOB Argentina port	USD  182/195 Jun/Aug	x

 

 

Soymeal,  48 protein, FOB NOLA	USD 585>>570 May>>July	X
Soymeal, 48 protein, USA, Rotterdam	USD 648>>617 May>>July	X
Soymeal, Argentina, Rotterdam	USD 579>>562 May>>July	x
Soymeal, 47 pro, FOB Argentina	USD 543>>505 May>>July	x
Soymeal, 48 protein, Brazil, Rotterdam	USD 565>>552 May>>July	x
Soymeal, FOB Brazil	USD 524>>501 May>>July	X
Soymeal, 48 protein, India FOB	USD 665/675	X
Soybeans, FOB NOLA	USD 575>>565 May>>July	x
Soybeans, Argentina, FOB	USD 532>>506 May/July	X
Soybeans, Brazil, FOB	USD 530>>501 May>>July	x
Soybeans, Rotterdam	USD 581>>573 May>>July	x
Soybeans, Black Sea	USD 550/565	x

 

 

Bulk vessel shipments, minimum 5000 m/t

 

Corn Gluten Meal, USA FOB NOLA	USD   900/910 m/t  May/July	X
Corn Gluten Feed, USA FOB NOLA	USD   220/225 m/t  May/July	X
DDGS, 35 profat, USA FOB NOLA	USD   289>>281 m/t May>>July	x
DDGS, 35 profat, CNF Asia	USD   355>>350 m/t May>>July	x

 

DDGS prices were a little weaker during the week and with the somewhat bearish WASDE corn report it is expected that prices could slide lower in coming days. There was quite a bit of buyer activity in advance of the report but, now that we see a good chance of lower prices, the buyers will either back off from booking or bid well below the current prices. With much of the May/June supply of DDGS sold out, export buyers are having to look out in July to September for supply and out past July the prices get very sketchy. However, for now, lower seems to be the price direction.

 

As with DDGS, the prices of both corn gluten feed and meal were seen to be lower this week but with buyers looking even lower. There were some corn gluten meal export CNF bids in the market but they seemed to be running about USD 20 m/t below where sellers were willing to do business.   

 

Prices should continue lower in coming days, unless there is a sudden change in corn prices.

 

 

Container shipments, minimum 200 m/t

 

Argentina Meat & Bone meal, 45 protein	USD 520/530 CNF Asia
Paraguay Meat &Bone meal, 45 protein	USD 470/480 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 670/690 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 690/710 m/t CNF Asia  USD 930/940 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 500/530 m/t
Feathermeal  80 protein USA	USD 740/760 m/t
Poultry meal  57 protein, Eastern USA	USD 660/680 m/t

 

Animal protein prices, except poultry meal, moved a little lower in the USA this week for both domestic and export shipments but this was before the WASDE report was issued and very late on Friday USA prices seemed to want to move a little higher. USA prices will depend to a good degree on what happens to US soymeal prices next week.

 

On the international side of things, the prices or at least buyers' price ideas moved lower on the week, even with the OZ/NZ exporters looking for higher prices. It seems that in Australia the domestic market is very strong and this is pushing export price expectations higher even when buyers are bidding lower.

 

Trade reports don't seem to be looking for any serious drop in international animal protein prices but a decent drop in fishmeal prices during the current fishing season could certainly  cause some weakness in animal protein prices, especially for poultry meal.

 

 

 

 

 

 

 

SECTION 2 --- FISHMEAL COMMENTS AND PRICES: PERUVIAN

 

PERU "INDICATION" FISHMEAL PRICES:

 

Fishing in the main area in Peru was lower this week as there was a small "not a ban" restriction event in some fishing areas that is being used by the Peruvian government to direct the fishing to other areas in the attempt to reduce the juvenile catch and perhaps avoid an official ban. Up to last Thursday the catch for the main quota was up to about 215,000 m/t while the southern quota reached 159,000 m/t against their total of 400,000 m/t.

 

As reported last week the IFFO London conference is over and most people are back home. One very interesting thing in trade reports was the presentation in London regarding an El Nino event which seems to be an almost sure thing for later in 2014 but there will not be a definitive answer on how serious the event could be for another couple of months.

 

With the quite high level of juvenile fish that have been seen in Peru and the resulting lower catch numbers, there seem to be concerns about landing the full quota and what the effect will be on price over the next weeks. Most producers are not booking business until they see how the fishing develops, since no one wants to sell too low if prices are going to move higher.  There has been very little in new sales recorded over the past couple of weeks and if fishing improves the fishmeal stocks will grow quickly due to there being a quite small backlog of business but that doesn't mean that prices will be moving lower. What we need to see is a good handle on what will happen with the fishing.

 

There is no change in reported fishmeal prices this week.

 

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	1520/1540 m/t
67 protein SD 150  TVN	1540/1560 m/t
67 protein SD 120 TVN	1560/1580 m/t
67 protein SD 1000 hist, 120 TVN	1580/1600 m/t
68 protein SD 500 hist, 120 TVN	1600/1620 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