Hammersmith Marketing Ltd - Grain Trading
WEEKLY FEED GRAIN AND PROTEIN REPORT May 17, 2014
Representative Office: +33.9.7044.4881 Mobile: +33.6.8068.4564 Fax: +33.4.5774.7575
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One Bay Street, PO Box N-3944, Nassau, Bahamas. Tel 1.242.322.6154
Email: tradegroup@hammersmith.biz WWW: hammersmithltd.blogspot.com SKYPE: bacon39a
The International Grains Council annual London Conference and the GAFTA dinner are both coming up the week of June 9th in London and I will be attending both, inshallah. I hope to see some readers of my weekly report at these two events.
SECTION 1: FEED GRAINS -- VEGETABLE AND ANIMAL PROTEIN
Looking at the grain and soybean/soymeal prices at week's end it was certainly a down week across the board -- everything was down on the week. The futures prices for corn were down by about USD 8 m/t which showed up in export prices dropping by USD 6 to 8 m/t. Old crop soybean futures were down by about USD 7 m/t while the new crop was only down by USD 2 to 4 m/t. It was a similar story with soymeal where the old crop supply was down by about USD 7 m/t while new crop was only down by about USD 2 m/t.
Corn futures were down four days out of five this week as the effect of the bearish USDA WASDE report was still being felt in the market. Of course, with the planting have caught up to the average and the weather for the next ten days or so looking just great, there was little in the way of bullish news to push prices higher. South American and US corn are fighting it out in world corn markets as Ukraine has little left to sell and present and buyer remain concerned about buying any Black Sea corn. US corn is doing very well into North Africa and the Middle East but Brazil corn is going to give the US a run for its money.
For the next few weeks we will see the US prices being highly weather driven and, at present, weather looks good and lower prices are expected in the short term. It is impossible to know for certain where prices are going longer term but for now there seems little reason to expect a rally in corn prices.
Looking at world corn and the spring plantings: France is having a great corn year, much better than last year, Ukraine planting is coming along although projections say it will be down by at least 10 percent this year and India's corn crop is up 10 percent on last year – so, all looks good for corn crops at present.
With soybeans, experts say that the planting level should reach close to 40% in Monday's report which will be right about on average and, at present, the weather looks good for continued quick planting. Trade reports this week are saying that if the planting continues at the current level with limited weather delays then the soybean prices should move lower.
There are continued shipments of soybeans reported from South America to the US and this will lead to more weakness in the old crop prices. Also China is going to sell 300,000 m/t of soybeans from its reserve stock which will limit short-term imports a little.
A number of trade experts were saying that soybean prices, especially the old crop, do not seem to want to slip any lower than the current level and even further soybean imports don't seem to be having any major effect on the price levels. According to most trade reports soybeans just don't have as much potential of going lower in price as corn does.
USA Crop Progress report – May 12, 2014
| Product | Last year % | Last week % | This week % | 5 year Average % |
| Corn planted | 26 | 29 | 59 | 58 |
| Soybeans planted | 5 | 5 | 20 | 21 |
| Sorghum planted | 29 | 28 | 36 | 33 |
Estimated Bulk Grain freight in USD per m/t, basis heavy grains
| US Gulf to Europe: 60/70,000 | $16.00 | down $2.00 | x |
| US Gulf to Egypt: Panamax | $28/29.00 | Down $1.00 | x |
| US Gulf other Med: 25,000 MT | $34/35.00 | down $1.00 | x |
| US Gulf Israel: 50,000 MT | $30/32.00 | Down $1.00 | x |
| US Gulf Morocco: 25,000 | $32/33.00 |
| x |
| US Gulf Nigeria: 30,000 m/t | $38/39.00 | Up $1.00 | x |
| US Gulf Turkey: 50,000 | $31/33.00 | Down $1.00 | x |
| US Gulf Yemen 35/45.000 | $45/46.00 |
| x |
| US Gulf Japan: Panamax | $46/47.00 |
| x |
| US Gulf China: Panamax | $44/45.00 | Down $1.00 | x |
| US PNW Asia: 35/45,000 m/t | $34/36.00 |
| x |
| US PNW Japan: 50,000+ m/t | $25/26.00 | down $1.00 | x |
| US PNW China: 50,000+ m/t | $25/26.00 |
| x |
| France/Germany to Algeria: 30,000 m/t | $24.00 | Down $1.00 | x |
| France/Germany to Morocco: 30,000 m/t | $25.00 | Down $1.00 | X |
| France/Germany to Egypt: 50,000 m/t | $23.00 | Size change | X |
| France/Germany to Jordan: 35/45,000 m/t | $29.00 | Down $2.00 | X |
| France/Germany to Saudi Arabia: 50/60,000 m/t | $36.00 | Down $2.00 | x |
| Argentina to Europe: 60,000 m/t | $19/20.00 | Changed vessel size | x |
| Argentina to Egypt: 50,000 m/t | $30/31.00 | Down $2.00 | x |
| Argentina to Algeria: 25/30,000 m/t | $32/33.00 |
| 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 | New | 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 | new | x |
| Brazil to Turkey/Egypt: 50,000 m/t | $24/25.00 | Down $1.00 | 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 | $18/19.00 | Up $1.00 | x |
| Black Sea to Morocco: 30,000 m/t | $21/22.00 | Down $1.00 | X |
| Black Sea to East Med: 30,000 m/t | $14/15.00 |
| x |
| Black Sea to East Med: coaster | $25/26.00 | Up $2.00 | x |
| Black Sea to Saudi Arabia – Jeddah – 50k | $26/28.00 | Up $1.00 | x |
| Baltic Dry Index | 1027 | Up 30 | x |
| Baltic Capesize Index | 1530 | Down 11 | x |
| Baltic Panamax Index | 899 | Up 172 | x |
| Baltic Handisize Index | 485 | Down 23 | x |
*** see sources note
FOB port or location specified. Prices in US$, 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 282>>276 Jun>>Aug | x |
| Wheat, USA Hard Red Winter 12 protein | USD 343>>340 Jun>>Aug | x |
| Wheat, Ukraine 11.5 pro, 30,000+ m/t | USD 284/290 May/Jul | x |
| Wheat, Russia 12.0 pro, 30,000+ m/t | USD 286/291 May/July | x |
| Wheat, soft milling, France, Rouen port | USD 275/278 May/July | x |
| Wheat, milling, Argentina, upriver | USD 350/355 June/July | x |
| Wheat, feed, Black Sea | USD 240/250 July/Aug | x |
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| Barley, France, Rouen port | USD 230/234 May/July | x |
| Barley, feed, Argentina, upriver | USD 222/230 Jul/Aug | x |
| Barley, feed, Black Sea, 30,000+ | USD 235/240 May/July | x |
| Barley, feed, USA Pacific Northwest | USD 270/275 | x |
| Corn, FOB NOLA USA | USD 225>>221 Jun/July | X |
| Corn, FOB USA Pacific northwest | USD 236/238 Jun/July | x |
| Corn, FOB Argentina port, upriver | USD 230>>216 Jun/Aug | x |
| Corn, FOB Brazil port | USD 209/216 July/Aug new crop | x |
| Corn, FOB Black Sea, 30,000+ m/t | USD 250/260 May/July | x |
| Corn, FOB France | USD 246/249 May/July | x |
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| Sorghum, FOB Texas | USD 249>>243 May/July | x |
| Sorghum, FOB Argentina port | USD 180/190 Jun/Aug | x |
| Soymeal, 48 protein, FOB NOLA | USD 577>>563 May>>July | x |
| Soymeal, 48 protein, USA, Rotterdam | USD 641>>609 May>>July | x |
| Soymeal, Argentina, Rotterdam | USD 583>>575 May>>July | x |
| Soymeal, 47 pro, FOB Argentina | USD 542>>495 May>>Aug | x |
| Soymeal, 48 protein, Brazil, Rotterdam | USD 562>>555 May>>July | x |
| Soymeal, FOB Brazil | USD 517>>494 May>>July | x |
| Soymeal, 48 protein, India FOB | USD 655/665 | x |
| Soybeans, FOB NOLA | USD 571>>562 May>>July | x |
| Soybeans, Argentina, FOB | USD 532>>497 May>>July | x |
| Soybeans, Brazil, FOB | USD 528>>496 May>>July | x |
| Soybeans, Rotterdam | USD 592>>579 May>>July | x |
| Soybeans, Black Sea | USD 550/565 | x |
*** see sources note
Bulk vessel shipments, minimum 5000 m/t
| Corn Gluten Meal, USA FOB NOLA | USD 900/910 m/t Jun/Aug | X |
| Corn Gluten Feed, USA FOB NOLA | USD 225/230 m/t Jun/Aug | X |
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| DDGS, 35 profat, USA FOB NOLA | USD 283>>279 m/t Jun>Aug | X |
| DDGS, 35 profat, CNF Asia | USD 355>>351 m/t Jun>>Aug | x |
*** see sources note
Corn prices were down this week as were soymeal prices and these two factors put pressure on US prices for all corn by-products. Looking at DDGS in the US market, prices are reported to be down as much as USD 15 m/t in some areas. Export buyers are going to be watching the market very closely and will be buying DDGS for later in the year as soon as they think the market has dropped to a decent pricing level.
The US Grains Council report this week (www.grains.org) reports that there is renewed Asian buying in DDGS, even in nearby positions. Of course with most DDGS positions having been sold weeks ago, nearby tends to be in July and August.
With corn prices looking to go lower, until there is some bullish news, and soymeal slipping, it is hard to expect any rally in prices for DDGS, corn gluten meal and corn gluten feed. It would be nice to see some weakness in corn gluten meal prices, as at the current USD 900 m/t level, it is just too high priced for some export markets.
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 670/690 m/t CNF Asia USD 920/940 m/t CNF Asia USD 800/820 m/t CNF Asia USD 1100/1120 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 500/530 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
Everything seemed to want to move lower this week except for poultry meal where prices were just a tad higher – especially for pet food grade poultry meal. Meat and bone meal prices in the USA and for US export dropped a little, as much as USD 20 m/t depending on who you talked to, and export prices in Asia for MBM seemed to be about USD 20 m/t lower from all origins. Trade reports from the US are saying that US animal protein prices will be moving lower in coming weeks as supply increases and sellers have to fight against falling soymeal prices. Market reports say that Australian and New Zealand export prices were steady while some exporters in South America were dropping prices to try to lock up some business.
As has been the pattern in recent weeks, there were quite a few export buyers looking around in the MBM market but looking seemed to be all they wanted to do as there was little booked. Perhaps all the business that looks this direction is being covered from European sources.
SECTION 2 --- FISHMEAL COMMENTS AND PRICES: PERUVIAN
PERU "INDICATION" FISHMEAL PRICES:
Total catch in Peru up to the 15th is reported as 420,000 m/t which represents about 95,000 m/t of fishmeal and 27,000 m/t of fishoil. The balance on the major quota now stands at about 2.1 million m/t. For the southern quota of 430,000 m/t the total landed is now at 261.000 m/t: 60,000 m/t of fishmeal and 6,600 m/t of fishoil. The Peruvian government has declared a four day fishing ban for specific areas from April 17 to 21.
The talk in Peru this week has been about the possibility of not being able to complete the fishing quota in the allotted time as fishing has been quite low and the high percentage of juvenile fish will lead to more mini-bans and reduced fishing.
Buyers are getting a little concerned that fishing is not too good and prices are not falling, So, the feeling in the market is that buyers are going to have to start booking at current market prices in order to lock in supply – especially important if the full quota is not caught.
One trade report this week did say that there was some 68 protein business done at a price about USD 50 m/t higher than as shown below – perhaps prices will be moving higher rather than lower or perhaps this higher priced sale was just a one time thing. However it is also reported that the production of the higher grades of fishmeal is quite low at present due to the smaller size of the fish being caught.
It was announced this week by Triple Nine in Denmark that they will be building a state of the art fishmeal factory in Shandong Province, China with an investment of Euro 18.8 million. They project the yearly production at 20,000 m/t with a staff of 60.
Just for information purposes the major market fishmeal production so far in 2014 is as follows:
|
| Production 2014 to date m/t | Production 2013 to date m/t | Change |
|
|
|
|
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| Chile | 175,800 | 130,500 | 34.7% |
| Peru | 190,100 | 89,500 | 112.4% |
| Denmark/Norway | 110.400 | 79,100 | 39.5% |
| Iceland/North Atlantic | 75,600 | 116,800 | -35.2% |
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IFFO May 2014
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 | 1450/1470 m/t |
| 65/66 protein | 1480/1500 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 |
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| 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 |
*** 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
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