Weekly report -- June 14, 2014

 

Hammersmith Marketing Ltd - Grain Trading

 

WEEKLY FEED GRAIN AND PROTEIN REPORT   June 14, 2014

 

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SECTION 1:  FEED GRAINS -- VEGETABLE AND ANIMAL PROTEIN

 

It seems that all I can say these days on prices is down, down, down and down and it is the same this week with everything in grains and oilseeds moving lower.

 

Corn prices were down about USD 5 m/t for export much of which was due to the continuing good weather in the USA. The USDA WASDE report that came out last week did not have any surprises for corn buyers or sellers (the June report rarely has any surprises). However, there is a little worry about what the weather will do for the next couple of weeks and this may be enough to move new crop corn prices a little higher next week. At this time of year the market is just looking for a reason to move and weather is really the major market factor.

 

Some weather reports say the weather will be great for the next two weeks but others hint that we could have very high temperatures in some parts of the USA, temperatures higher than the farmers would normally want.

 

Poor old soybeans and soymeal were down strongly on the week, more in the old crop than the new but still down everywhere. The weather is good for soybeans and there is some rain in the forecast that should be just great for the crops. The new crop of soybeans are probably close to 95% planted which is above average for soybeans and the USDA condition report has the planted soybeans all in pretty good condition.

 

As with corn the USDA WASDE report held no serious surprises. Weak as soybean/soymeal prices may seem to be there is still going to be a very heavy premium to be paid for buying old crop soybeans and the weather won't change that. Of course, the closer we get to new crop the smaller the old crop premium will become but then the smaller the available stocks will also become. Now through August buyers are going to have to pay a significant premium to buy USA beans and meal.   

 

USA Crop Progress report – June 09, 2014

 

Product	Last year %	Last week %	This week %	5 year Average %
Soybeans planted	69	78	87	81
Sorghum planted	67	56	67	71
Wheat planted, spring	86	88	95	93

 

 

 

USA Crop condition report – June 09, 2014 – all in percentages

 

	Very poor	Poor	Fair	Good	Excellent
Wheat - winter	22	22	26	25	5
Corn	1	3	21	60	15

 

 

 

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

 

US Gulf to Europe: 60/70,000 (10,000 disch)	$15.00	Down $1.00	x
US Gulf to Spain: 30,000 m/t(5,000 disch)	$28/29.00		x
US Gulf to Egypt: Panamax(6,000 disch)	$27/28.00	Down $1.00	x
US Gulf other Med: 25,000 MT(3,000 disch)	$35/36.00		x
US Gulf Israel: 50,000 MT	$29/30.00	Down $1.00	x
US Gulf Morocco: 25,000(3,000 disch)	$32/33.00	Down $2.00	x
US Gulf Nigeria: 30,000 m/t	$39/40.00	Down $1.00	x
US Gulf Turkey: 50,000	$30/31.00	Down $1.00	x
US Gulf Yemen 35/45.000	$45/46.00		x
US Gulf Japan: Panamax(10,000 disch)	$45/46.00	Down $2.00	x
US Gulf China: Panamax(8,000 disch)	$43/44.00	Down $2.00	x
US PNW Asia: 35/45,000 m/t	$34/36.00	Down $1.00	x
US PNW Japan: 50,000+ m/t(10,000 disch)	$23/24.00	Down $2.00	x
US PNW China: 50,000+ m/t(8,000 d1sch)	$23/24.00	Down $1.00	x
France/Germany to Algeria: 30,000 m/t(3,000 disch)	$23.00		X
France/Germany to Morocco: 30,000 m/t(3,000 disch)	$24.00		X
France/Germany to Yemen: 30,000 m/t	$41.00		X
France/Germany to Egypt: 50,000 m/t(10,000 disch)	$22.00	Down $1.00	X
France/Germany to Jordan: 35/45,000 m/t(4,000 disch)	$27.00	Down $1.00	X
France/Germany to Saudi Arabia: 50/60,000	$33.00	Down $1.00	x
Argentina to Europe: 60,000 m/t	$21/22.00		x
Argentina to Egypt: 50,000 m/t(10,000 disch)	$31/32.00		x
Argentina to Algeria: 25/30,000 m/t(3,000 disch)	$33/34.00		x
Argentina to Morocco: 25,000 m/t(3,000 disch)	$32/33.00		x
Argentina to Saudi Arabia	$42.00	Down $1.00	x
Argentina to South Africa 30,000 m/t(3,000 disch)	$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(5,000 disch)	$17/18.00		x
Black Sea to Morocco: 30,000 m/t(3,000 disch)	$21/22.00		x
Black Sea to Tunisia/Algeria: 30,000(3,000 disch)	$19/20.00		x
Black Sea to East Med: 30,000 m/t(3,000 disch)	$13/14.00		x
Black Sea to East Med: coaster	$23/26.00		x
Black Sea to Egypt: coaster 3,000 m/t	$33/37.00		x
Black Sea to Saudi Arabia – Jeddah – 50k	$24/26.00		x
Baltic Dry Index	906	Down 83	X
Baltic Capesize Index	1730	Down 63	X
Baltic Panamax Index	582	Down 145	X
Baltic Handisize Index	459	Down 22	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 241/256 Jun/Oct	x
Wheat, USA Hard Red Winter 12 protein	USD 321/325 Jun/Oct	x
Wheat, Ukraine 11.5 pro, 30,000+ m/t	USD 240/245 Aug new crop	x
Wheat, Russia 12.0 pro, 30,000+ m/t	USD 250/255 July/Aug new crop	x
Wheat, soft milling, France, Rouen port	USD 260/262 Jun/July	x
Wheat, milling, Argentina, upriver	USD 270/290 Dec/Jan 2015	x
Wheat, feed, Black Sea	USD 224/230 July/Aug new crop	x
Wheat Bran, Black Sea	USD 230/240 Jun/Aug	x
Barley, France, Rouen port	USD 216/217 Jun/July	x
Barley, feed, Argentina, upriver	USD 216/221 Dec/Jan 2015	x
Barley, feed, Black Sea, 30,000+	USD 217/223 Jun/July new crop	X
Barley, feed, USA Pacific Northwest	USD 275/280 Jun/Aug	x

 

Corn, FOB NOLA USA	USD 211>>208 July/Sep	X
Corn, FOB USA Pacific northwest	USD 226/228 July/Sep	x
Corn, FOB Argentina port, upriver	USD 216>>211 Jun/Aug	x
Corn, FOB Brazil port	USD 201/205 July/Aug new crop	x
Corn, FOB Black Sea, 30,000+ m/t	USD 220>>210 July/Aug new crop	x
Corn, FOB France	USD 236/240 Jun/July	x
Sorghum, FOB Texas	USD  249>>243 Aug/Sept	x
Sorghum, FOB Argentina port	USD  180/190 Jun/Aug	x

 

 

Soymeal,  48 protein, FOB NOLA	USD 580>>555 Jun>>Aug	X
Soymeal, 48 protein, USA, Rotterdam	USD 630>>600 Jun>>Aug	X
Soymeal, Argentina, Rotterdam	USD 575>>562 Jun>>Aug	X
Soymeal, 47 pro, FOB Argentina	USD 530>>480 Jun>>Aug	X
Soymeal, 48 protein, Brazil, Rotterdam	USD 555>>535 Jun>>Aug	X
Soymeal, FOB Brazil	USD 505>>480 Jun>>Aug	X
Soymeal, 48 protein, India FOB	USD 655/665	x
Soybeans, FOB NOLA	USD 560>>550 Jun>>Aug	X
Soybeans, Argentina, FOB	USD 520>>490 Jun>>Aug	X
Soybeans, Brazil, FOB	USD 520>>488 Jun>>Aug	X
Soybeans, Rotterdam	USD 568>>560 Jun>>Aug	x
Soybeans, Black Sea	USD 480/500 Sep/Oct	x

*** see sources note

 

Bulk vessel shipments, minimum 5000 m/t

 

Again this week the US Grains council showed much lower prices: CGM at USD 810, CGF at USD 150 and DDGS at USD 232….looking at various reports, we do not see the prices to be as low as the USGC report states. The prices below are our best estimates of where the market prices are although the price will depend greatly upon the particular supplier.

 

Corn Gluten Meal, USA FOB NOLA	USD   850/860 m/t  Jun/Aug	X
Corn Gluten Feed, USA FOB NOLA	USD   200/215  Jun/Aug	x
DDGS, 35 profat, USA FOB NOLA	USD   242>>235 m/t July>Sep	X
DDGS, 35 profat, CNF Asia	USD   315>>308 m/t July>Sep	x

*** see sources note

 

It is very hard to know exactly where the DDGS, corn gluten meal (CGM) and corn gluten feed (CGF) prices are this week. As noted above the table the US Grains Council is very bearish prices while other are not nearly so bearish. A couple of well-known reporting groups are showing prices at or slightly above the prices shown in my table and we understand from a couple of exporters that they are not selling as low as the USGC price ideas. As I said…hard to know where the prices are this week.

 

On the DDGS side of things, it is not all that surprising if prices are lower as the China GM problems are certainly shaking the market and causing both domestic and export prices to drop. With China being most of the export DDGS business, a stop in business is a major shock to the industry. Prices across the USA for DDGS are about USD 30 m/t lower and will probably stay low until the China business can be moved into the domestic market or to other destinations. While the China situation is certainly bad short term news for the industry it has created a tremendous buying opportunity for export buyers who are able to use DDGS or it seems CGF and CGM.

 

Several trade reports this week were saying that the sudden drop in DDGS prices has it being offered at below the cost of production this in order to find a home for all the production that looks unlikely to be going to China.

 

So export buyers get out there and fill up some ships with DDGS, CGM and CGF.

 

 

Container shipments, minimum 200 m/t

 

Argentina Meat & Bone meal, 45 protein	USD 460/480 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 660/680 m/t CNF Asia  USD 890/910 m/t CNF Asia  USD 780/800 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 710/730 m/t
Poultry meal  57 protein, Eastern USA	USD 660/680 m/t

*** see sources note

 

Animal protein prices in Asia are reported to be a little variable this week with some sellers a little lower while others were steady. The market is being pushed in two directions: lower because of vegetable protein prices but higher due to fishmeal prices. With soymeal and corn gluten prices being lower by at least USD 20 m/t in the last week it is tough to hold animal protein export prices up.

 

Interestingly, in the USA for both domestic and export, the meat and bone meal prices did not drop although both feathermeal and feed grade poultry meal did move lower. It is reported that pet food grade poultry meal had also dropped but, with fishmeal jumping, any drop in pet food grade is probably very short term.

 

There is very little chance that animal protein prices will move higher in the near future as overall the effect of weak soymeal prices is just dragging things down.

 

 

SECTION 2 --- FISHMEAL COMMENTS AND PRICES: PERUVIAN

 

According to some trade reports there has been business done for Super Prime as high as USD 1900 m/t but, at least for this week, demand for high quality is much larger than supply. The price increase in lower grade fishmeal is not quite so high but all prices are going up.

 

On the Peru fishing quotas, we have about 950,000 m/t landed on the 2.53 million m/t quota up to June 12, which leaves just under 1.6 million m/t to go. The smaller southern quota of 430,000 m/t still has about 88,000 m/t to go but time is running out in the south as the quota expires on June 15^th. The hopes for fishing seem to be quite good for the rest of June but there is concern over July where the weather can be very bad and the fishing poor. There are quite a few comments in the trade that it is impossible to land the entire quota and at least one trade publication was forecasting fishmeal prices at about another USD 150 m/t higher in 2014.

 

According to trade reports the stocks of unsold fishmeal are now at about 60,000 m/t, for both North and South, with sales on the books for just over 200,000 m/t – the northern fishmeal production this fishing season is currently at about 220,000 m/t plus the southern production.

 

For anyone who wants to read/review the FAO report on "Sustainable Fisheries and Aquaculture" it is available at the following:

 

http://www.fao.org/fileadmin/user_upload/hlpe/hlpe_documents/HLPE_Reports/HLPE-Report-7_EN.pdf

 

The report is not all that supportive of the fishmeal industry or the use of fishmeal and fishoil in animal feed.

 

IFFO fishmeal and fishoil production table

 

	2014 m/t Year to Date	2013 m/t Year to Date	% change
Fishmeal
Chile	204,977	140,600	37.0
Peru	338,043	345,700	-2.2
Denmark/Norway	148,317	113,200	31.0
Iceland/Atlantic	101,093	120,400	-16.1
Total	792,430	728,900	8.7
Fishoil
Chile	90,011	49,400	82.0
Peru	73,002	67,500	8.1
Denmark/Norway	35,802	35,200	1.7
Iceland/Atlantic	15,234	34,600	-56.0
Total	214,048	186,800	+14.6

IFFO

 

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	1700/1720 m/t
65/66 protein	1730/1750 m/t
67 protein standard steam	1750/1770 m/t
67 protein SD 150  TVN	1790/1810 m/t
67 protein SD 120 TVN	1810/1830 m/t
67 protein SD 1000 hist, 120 TVN	1830/1850 m/t
68 protein SD 500 hist, 120 TVN	1850/1870 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