Weekly report -- June 07, 2014

Hammersmith Marketing Ltd - Grain Trading

 

WEEKLY FEED GRAIN AND PROTEIN REPORT   June 07, 2014

 

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SECTION 1:  FEED GRAINS -- VEGETABLE AND ANIMAL PROTEIN

 

Soybeans and soymeal were the biggest losers this week as the markets closed. Corn was down a little for old crop and almost unchanged for new crop with soft red winter wheat (SRW) being down a little while hard red winter wheat (HRW) was up as much as SRW was down, about USD 4 m/t.

 

With almost all the corn crop in the ground and the weather forecasts remaining quite good for most of the corn area, there seemed to be good reason for prices to quietly slip lower. The commodity funds were liquidating some of their long corn positions as did some speculators – they can only wait so long for a rally in prices and as the futures market moves lower they just hurt more and more.

 

Reading the trade reports at the end of the week one would think that the market has very little room to move lower with the feeling seeming to be that corn prices will probably just move up and down a little at the current levels until there is a good piece of information that will set a new direction for prices.

 

One trade report was saying that the weather is so good they feel we may see record corn yields later in the year. There is nothing like starting the crop of very well in order to have a great finish a few months down the road.

 

Soybeans were down on the week with old crop down the most but new crop also showing some weakness: old crop down by USD 7 to 10 m/t with new crop down by USD 5 to 7 m/t and soymeal down by USD 9 to 12 m/t.

 

The soybean crop is over 90% planted and the early estimates are that 70+ percent of the crop is in good to excellent condition – that is what comes of great weather. The USDA WASDE report will be issued next week and most experts don't think that there will be much in the way of changes to the USDA projections on soybeans, except perhaps a small reduction in the estimated carryout for the old crop beans.

 

As to prices, old crop is still well above new crop so may have some more room to slide but for new crop prices one needs to watch the weather.

 

 

USA Crop Progress report – June 02, 2014

 

Product	Last year %	Last week %	This week %	5 year Average %
Corn planted	90	88	95	94
Soybeans planted	55	59	70	78
Sorghum planted	51	46	56	57
Wheat planted	80	74	88	88

 

 

 

USA Crop condition report – June 02, 2014 – all in percentages

 

	Very poor	Poor	Fair	Good	Excellent
Wheat - winter	22	22	26	25	5

 

 

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

 

US Gulf to Europe: 60/70,000	$16.00	Down $1.00	x
US Gulf to Spain: 30,000 m/t	$28/29.00		x
US Gulf to Egypt: Panamax	$28/29.00	Down $1.00	x
US Gulf other Med: 25,000 MT	$35/36.00		x
US Gulf Israel: 50,000 MT	$30/31.00	Down $1.00	x
US Gulf Morocco: 25,000	$34/35.00		x
US Gulf Nigeria: 30,000 m/t	$40/41.00	Up $1.00	x
US Gulf Turkey: 50,000	$31/32.00	Down $1.00	x
US Gulf Yemen 35/45.000	$45/46.00		x
US Gulf Japan: Panamax	$47/48.00		x
US Gulf China: Panamax	$45/46.00	Up $1.00	x
US PNW Asia: 35/45,000 m/t	$35/37.00		x
US PNW Japan: 50,000+ m/t	$25/26.00	Up $1.00	X
US PNW China: 50,000+ m/t	$24/25.00		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		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	$23/26.00	Down $2.00	X
Black Sea to Egypt: coaster 3,000 m/t	$33/37.00		x
Black Sea to Saudi Arabia – Jeddah – 50k	$24/26.00	Down $1.00	x
Baltic Dry Index	989	Up 49	x
Baltic Capesize Index	1793	Up 414	x
Baltic Panamax Index	727	Down 177	x
Baltic Handisize Index	481	Down 3	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 251/269 Jun/Oct	X
Wheat, USA Hard Red Winter 12 protein	USD 327/332 Jun/Oct	x
Wheat, Ukraine 11.5 pro, 30,000+ m/t	USD 245/253 Aug new crop	x
Wheat, Russia 12.0 pro, 30,000+ m/t	USD 253/258 July/Aug new crop	x
Wheat, soft milling, France, Rouen port	USD 265/268 Jun/July	x
Wheat, milling, Argentina, upriver	USD 355/368 June/July	x
Wheat, feed, Black Sea	USD 228/232 July/Aug new crop	X
Wheat Bran, Black Sea	USD 235/245 Jun/Aug	X
Barley, France, Rouen port	USD 212/215 Jun/July	X
Barley, feed, Argentina, upriver	USD 220/230 Jul/Aug	x
Barley, feed, Black Sea, 30,000+	USD 225/232 Jun/July new crop	x
Barley, feed, USA Pacific Northwest	USD 280/285 Jun/Aug	x

 

Corn, FOB NOLA USA	USD 215>>213 July/Aug	x
Corn, FOB USA Pacific northwest	USD 227/229 Jun/Aug	x
Corn, FOB Argentina port, upriver	USD 219>>210 Jun/Aug	x
Corn, FOB Brazil port	USD 205/208 July/Aug new crop	x
Corn, FOB Black Sea, 30,000+ m/t	USD 225/230 July/Aug new crop	x
Corn, FOB France	USD 235/246 Jun/July	x
Sorghum, FOB Texas	USD  240/242 Aug/Sept	x
Sorghum, FOB Argentina port	USD  180/190 Jun/Aug	x

 

 

Soymeal,  48 protein, FOB NOLA	USD 600>>579 Jun>>July	x
Soymeal, 48 protein, USA, Rotterdam	USD 650>>618 Jun>>July	X
Soymeal, Argentina, Rotterdam	USD 580>>570 Jun>>July	X
Soymeal, 47 pro, FOB Argentina	USD 555>>503 Jun>>Aug	X
Soymeal, 48 protein, Brazil, Rotterdam	USD 563>>555 Jun>>July	X
Soymeal, FOB Brazil	USD 530>>504 Jun>>Aug	X
Soymeal, 48 protein, India FOB	USD 660/670	x
Soybeans, FOB NOLA	USD 580>>568 Jun>>July	X
Soybeans, Argentina, FOB	USD 545>>510 Jun>>July	X
Soybeans, Brazil, FOB	USD 531>>504 Jun>>July	X
Soybeans, Rotterdam	USD 587>>576 Jun>>July	X
Soybeans, Black Sea	USD 545/555	x

*** see sources note

 

 

 

Bulk vessel shipments, minimum 5000 m/t

 

The US Grains Council weekly report show much lower prices for CGF and CGM at USD 810 for CGM and USD 162 m/t for CGF --- these very low USGC prices are quite suspect.

 

Corn Gluten Meal, USA FOB NOLA	USD   890/900 m/t  Jun/Aug	x
Corn Gluten Feed, USA FOB NOLA	USD   225/230 m/t  Jun/Aug	x
DDGS, 35 profat, USA FOB NOLA	USD   263>>257 m/t Jun>Aug	x
DDGS, 35 profat, CNF Asia	USD   336>>330 m/t Jun>>Aug	x

*** see sources note

 

Well, a weaker corn market means a weaker market for all corn by-products and the drop seems to have hit distillers dried grains (DDGS) the hardest with prices coming down by as much as USD 10 m/t in the USA domestic market with similar price drops seen at export ports. Most major DDGS export buyers seem to be sitting back again this week just waiting for prices to go lower and lower. However, the feeling seems to be that corn may be near the bottom and export buyers should be careful and not wait too long to cover at least some of their needs.

 

The prices seen for both corn gluten meal (CGM) and corn gluten feed (CGF) were all over the place this week with some very, very low prices being talked about while most of the market was a little softer but not by a huge amount. The corn gluten meal market should do well in the short term with the USD 200 m/t rise in fishmeal prices and buyer should try to switch some of their protein needs to CGM from fishmeal, if possible.

 

The USA export number shown below are very interesting, especially for DDGS, where shipments are up by about 1.4 million m/t over last year – with 1.15 million m/t being extra sales to China, shipments to South East Asia are up by 41% or an additional 130,000 m/t – so between China and Asia all the increase in DDGS sales is covered.  Mexico was also up by about 34% or 130,000 m/t more but the MENA region was down 140,000 m/t due mainly to the GMO problems in Turkey.

 

The fall in CGM exports is largely due to a drop in shipments to Southeast Asia and Mexico while shipments were up to Egypt and Chile but not enough to offset the drop in Asia. CGF shipments were up a 11% overall but shipments to the EU (Ireland, UK, Germany) were up very strongly as were shipments to Israel but shipments to Turkey fell to zero from 110,000 m/t in this period last year which was enough to push the overall total lower – this was again due to GMO complications in Turkey.

 

USA corn by product exports Jan/April 2014 – in m/t – major destinations

 

	Corn Gluten Feed	Corn Gluten Meal	Distillers Dried Grains -- DDGS
Canada	2,500	17,100	93,000
Caribbean			4,200
Central America			86,900
Chile		52,800	5,900
China			1,853,100
Columbia		15,500	42,000
Egypt		75,200	57,700
Germany	30,300
Indonesia	3,500	60,700	100,100
Ireland	158,600		94,300
Israel	87,000		42,900
Japan		29,300	167,000
Malaysia		11,000	12,000
Mexico	5,800	17,500	511,700
Morocco			16,400
New Zealand			21,500
Philippines			33,000
Portugal
Saudi Arabia			8,100
South Korea	25,300	3,300	246,200
Spain			21,900
Taiwan		6,500	77,400
Thailand		8,900	71,000
Turkey			51,900
UK	21,200		41,100
Vietnam		5,200	236,200
Total all exports	340,100	313,000	3,919,500
	Up 11%	Down 6%	Up 58%

USDA GATS

 

Container shipments, minimum 200 m/t

 

Argentina Meat & Bone meal, 45 protein	USD 470/490 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 590/610 m/t CNF Asia  USD 640/660 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 910/940 m/t CNF Asia  USD 800/830 m/t CNF Asia  USD 1080/1100 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

 

There didn't seem to be much change at all in the animal protein business this week. USA prices were bout unchanged for export and both Australia and New Zealand seemed steady. According to trade reports there has been some demand for prompt shipment to Indonesia for MBM, I guess so that material can arrive before Ramadan.

 

The feeling in the USA domestic market is that prices can slip a little lower but not too sure that this will move into the export market as the very strong fishmeal prices could help to keep animal protein CNF prices firm.

 

There was some very good selling interest from Argentina this week for MBM, at very attractive prices, but there just didn't seem to be any serious buyers around to take advantage, too bad.

 

Most of the trade reports are not calling for a serious change in prices but suggest a range of trading over the next few weeks – down a little then up a little or up a little then down a little – with no strong price movement in any direction.  

 

 

USA animal protein exports – Jan/April 2014 – in m/t

 

	Meat and Bone Meal – incl pork And poultry	Feathermeal
Bangladesh	1,500
Canada	14,700	2,000
Chile		13,700
China	15,600
Guatemala	6,600
Indonesia	22,800	28,300
Ecuador	2,700
Holland	2,100
Mexico	7,600
Philippines	3,000
Thailand	2,700

USDA GATS

 

 

SECTION 2 --- FISHMEAL COMMENTS AND PRICES: PERUVIAN

 

Fishing in Peru has been a little up and down the last week with mini-bans, bad weather, juvenile fish and El Nino concerns all seeming to be affecting the fishing in one way or another. Up to June 5^th the major northern catch is getting close to 900,000 m/t which leaves about 65% of the quota of 2.53 mm/t still to catch. The much smaller southern quota of 430,000 m/t has only about 100,000 m/t to go and the southern quota has been extended to June 15^th but this may still not be enough to guarantee the full quota is landed.

 

The fish catch overall was very good this week but that didn't make much difference to the rally in fishmeal prices as we see prices moving about another USD 100 m/t higher. According to the trade the major producers are now offering fishmeal for sale so they must like the level that prices have reached.

 

Buyer demand from Asia and a little from Europe seems to be quite good at present and the trade is looking for even more demand from China as their stocks on hand start to dwindle. Perhaps dwindle is an exaggeration as they never get low enough to be said to have dwindled but stocks are moving lower and China will be a buyer one of these days.

 

It is difficult to know where prices are going after the very strong rally of the past two weeks. Some experts say that the rally is now at the top – this because fishing remains good and supplies in Peru are growing. While other are more bullish and see demand continuing to push prices higher.

 

A few more days of good fishing could possibly move prices a little lower but then, if China jumps in, then lower prices may not be possible. With China being such a large share of the fishmeal business, all eyes tend to be on China to see what their next step may be.

 

 

 

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
65 protein	1670/1680 m/t
65/66 protein	1690/1700 m/t
67 protein standard steam	1700/1710 m/t
67 protein SD 150  TVN	1760/1770 m/t
67 protein SD 120 TVN	1780/1790 m/t
67 protein SD 1000 hist, 120 TVN	1800/1810 m/t
68 protein SD 500 hist, 120 TVN	1820/1830 m/t
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