Weekly report - July 05, 2014

 

Hammersmith Marketing Ltd - Grain Trading

 

WEEKLY FEED GRAIN AND PROTEIN REPORT   July 05, 2014

 

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SECTION 1:  FEED GRAINS -- VEGETABLE AND ANIMAL PROTEIN

 

 

Again this week: down, down, down and down, as the USDA report on Monday had a bearish effect on every grain and oilseed: corn prices down by about USD 12 m/t, soybeans down USD 36 m/t for new crop and USD 16 m/t for old crop, soymeal from new crop down by USD 30 m/t. Wheat too was lower with soft red winter wheat down about USD 5 m/t and hard red winter down by about USD 11 m/t. As I said: down, down, down.

 

So, not only was the USDA report bearish but the weather is great and is putting pressure on prices. There is some rainfall in the reports for next week and one would be very hard pressed to find anywhere where the corn crop was facing bad weather in the near term. The expectation for next week's crop condition report are for about the same as this week with 75% of the corn crop being in good to excellent condition.

 

So, for now, until the weather changes, it will be difficult to forecast higher prices for USA corn.

 

Soybean prices were down the worst of all thanks mainly to the USDA report and like corn to the great weather. There are also a couple of private crop forecasting services that feel the soybean crop will be even bigger than the USDA has said – not a lot bigger but at least some.

 

There was the comment in at least one trade report that, with continued good weather and the chance of even better crops, there  could be room for new crop soybean prices to drop as much as another USD 50 m/t – now that is bearish.

 

So, for now, for about everything, prices look to be lower – certainly not higher without a major change to crop fundamentals in the USA.

  

 

USA Crop condition report – June 29, 2014 – all in percentages

 

	Very poor	Poor	Fair	Good	Excellent
Wheat - winter	22	22	26	25	5
Wheat - spring	1	4	25	59	11
Corn	1	4	20	55	20
Soybeans	1	4	23	57	15
Sorghum	1	6	34	49	10

 

 

 

 

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

 

US Gulf to Europe: 60/70,000 (10,000 disch)	$14.00	Down $1.00	x
US Gulf to Spain: 30,000 m/t(5,000 disch)	$26/27.00	Down $1.00	x
US Gulf to Egypt: Panamax(6,000 disch)	$24/25.00	Down $2.00	x
US Gulf other Med: 25,000 MT(3,000 disch)	$31/32.00	Down $2.00	x
US Gulf Israel: 50,000 MT	$26/27.00	Down $2.00	x
US Gulf Morocco: 25,000(3,000 disch)	$29/30.00	Down $2.00	x
US Gulf Nigeria: 30,000 m/t	$41/42.00	Up $1.00	x
US Gulf Turkey: 50,000	$27/29.00	Down $2.00	x
US Gulf Yemen 35/45.000	$43/44.00		x
US Gulf Japan: Panamax(10,000 disch)	$40/41.00	Down $1.00	x
US Gulf China: Panamax(8,000 disch)	$41/42.00		x
US PNW Asia: 35/45,000 m/t	$35/37.00	Up $1.00	x
US PNW Japan: 50,000+ m/t(10,000 disch)	$24/25.00	Up $1.00	x
US PNW China: 50,000+ m/t(8,000 d1sch)	$24/25.00	Up $1.00	x
France/Germany to Algeria: 30,000 m/t(3,000 disch)	$22.00		x
France/Germany to Morocco: 30,000 m/t(3,000 disch)	$23.00		x
France/Germany to Yemen: 30,000 m/t	$40.00		x
France/Germany to Egypt: 50,000 m/t(10,000 disch)	$20.00		x
France/Germany to Jordan: 35/45,000 m/t(4,000 disch)	$25.00		x
France/Germany to Saudi Arabia: 50/60,000	$32.00		x
Argentina to Europe: 60,000 m/t	$19/20.00	Down $2.00	x
Argentina to Egypt: 50,000 m/t(10,000 disch)	$29/30.00	Down $1.00	X
Argentina to Algeria: 25/30,000 m/t(3,000 disch)	$31/32.00	Down $1.00	X
Argentina to Morocco: 25,000 m/t(3,000 disch)	$29/30.00	Down $2.00	x
Argentina to Saudi Arabia	$41.00	Down $1.00	x
Argentina to South Africa 30,000 m/t(3,000 disch)	$31/32.00	Down $1.00	x
Argentina to Spain: 30,000 m/t	$31/32.00		x
Argentina to China: 50,000 m/t, with top-off	$40/42.00		x
Brazil to Algeria: 25,000 m/t	$30/31.00		x
Brazil to China: 55,000 m/t	$34/35.00		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)	$15/16.00	Down $1.00	x
Black Sea to Morocco: 30,000 m/t(3,000 disch)	$19/20.00	Down $1.00	x
Black Sea to Tunisia/Algeria: 30,000(3,000 disch)	$17/18.00	Down $1.00	X
Black Sea to East Med: 30,000 m/t(3,000 disch)	$11/12.00	Down $1.00	X
Black Sea to East Med: coaster	$30/32.00	Up $2.00	x
Black Sea to Egypt: coaster 3,000 m/t	$40/44.00	Up $2.00	X
Black Sea to Saudi Arabia – Jeddah – 50k	$23/25.00	Down $2.00	x
Baltic Dry Index	893	up 72	x
Baltic Capesize Index	1864	Up 91	X
Baltic Panamax Index	640	Down 10	X
Baltic Supramax Index	682	Up 4	x
Baltic Handisize Index	403	Down 17	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 245/259 Jul/Oct	x
Wheat, USA Hard Red Winter 12 protein	USD 315/319 Jul/Oct	x
Wheat, Ukraine 11.5 pro, 30,000+ m/t	USD 240/248 Jul/Aug new crop	x
Wheat, Russia 12.0 pro, 30,000+ m/t	USD 240/250 July/Aug new crop	x
Wheat, soft milling, France, Rouen port	USD 245/247 July/Aug	x
Wheat, milling, Argentina, upriver	USD 270/280 Dec/Jan 2015	x
Wheat, feed, Black Sea	USD 223/227 July/Aug new crop	x
Wheat Bran, Black Sea	USD 225/230 Jun/Aug	x
Barley, France, Rouen port	USD 220/223 July/Aug	x
Barley, feed, Argentina, upriver	USD 210/215 Dec/Jan 2015	x
Barley, feed, Black Sea, 30,000+	USD 218/223 July/Aug new crop	x
Barley, feed, USA Pacific Northwest	USD 280/285 Jul/Sep	x

 

Corn, FOB NOLA USA	USD 202>>194 July/Sep	x
Corn, FOB USA Pacific northwest	USD 216>>212 July/Sep	x
Corn, FOB Argentina port, upriver	USD 200>>195 July/Sep	X
Corn, FOB Brazil port	USD 185/189 July/Sep new crop	x
Corn, FOB Black Sea, 30,000+ m/t	USD 193/199 Oct/Nov new crop	x
Corn, FOB France	USD 239/245 July/Aug	x
Corn, FOB Romania	USD 210/215 Sep/Oct new crop	x
Sorghum, FOB Texas	USD  233>>230 Aug/Sept	x
Sorghum, FOB Argentina port	USD  180/190 Jun/Aug	x

 

 

Soymeal,  48 protein, FOB NOLA	USD 537>>505 Jul>>Sep	x
Soymeal, 48 protein, USA, Rotterdam	USD 600>>565 Jul>>Sep	x
Soymeal, Argentina, Rotterdam	USD 520>>511 Jul>>Sep	x
Soymeal, 47 pro, FOB Argentina	USD 485>>435 Jul>>Sep	X
Soymeal, 48 protein, Brazil, Rotterdam	USD 515>>506 Jul>>Sep	X
Soymeal, FOB Brazil	USD 488>>455 Jul>>Sep	X
Soymeal, 48 protein, India FOB	USD 620/640	x
Soybeans, FOB NOLA	USD 545>>525 Jul>>Sep	x
Soybeans, Argentina, FOB	USD 500>>460 Jul>>Sep	x
Soybeans, Brazil, FOB	USD 540>>495 Jul>>Sep	X
Soybeans, Rotterdam	USD 570>>550 Jul>>Sep	X
Soybeans, Black Sea	USD 500/520 Sep/Oct	x

*** see sources note

 

Bulk vessel shipments, minimum 5000 m/t

 

 

Corn Gluten Meal, USA FOB NOLA	USD   690/710 m/t  Jul/Sep	x
Corn Gluten Feed, USA FOB NOLA	USD   165/170 m/t Jul/Sep	x
DDGS, 35 profat, USA FOB NOLA	USD   202/204 m/t July>>Sep	X
DDGS, 35 profat, CNF Asia	USD   293/299 m/t July>>Sep	x

*** see sources note

 

 

Corn by-products followed corn prices lower again this week – no surprise there. Most of the major export buyers were out of the market due to the Monday USDA report and the Friday US holidays – everyone was looking for prices to go even lower. Even though DDGS is a major export product, the largest share of DDGS is consumed within the US and with domestic buyer staying out of the market the DDGS prices were very soft. The US export prices have not moved lower as much as the domestic prices but they too were quite weak.

 

It is expected that export buyers will be watching the market very closely and will be buyers once they feel that corn is at the bottom. The problem with all corn by-products for export is that when all the buyers jump in the market there will be a serious export capacity problem and either prices will take a good jump higher or buyers will be forced to buy supplies further out in the year – this applies to all corn by-products.

 

The lack of export business to China will probably keep export DDGS prices on the back foot for a while – it is tough to replace 2.5 million m/t of export business overnight but the domestic market will probably absorb the excess as long as domestic prices are competitive.  

 

 

USDA export statistics – Jan to May 2014 – in m/t – major importers

 

	Corn Gluten Feed	Corn Gluten Meal	Distillers Dried Grains: DDGS
Canada		23,200	114,700
Chile		52,800
China			2,437,600
Columbia		27,900	47,100
Costa Rica			26,700
Egypt	8,800	93,600	81,900
El Salvador			29,300
Germany	30,300
Guatemala			23,800
Indonesia	5,100	71,900	121,800
Ireland	194,500	15,900	107,500
Israel	96,300		58,200
Japan		29,600	187,600
Malaysia		12,200
Mexico	6,800	20,400	680,400
Morocco	11,200		36,700
New Zealand			21,500
Philippines			37,000
South Korea	25,300		300,700
Spain			21,900
Taiwan			104,000
Thailand		10,900	88,000
Turkey			51,900
UK	21,500		53,700
Vietnam			276,100
Total all exports	407,700	391,000	4,996,100
Change 2014/2013	Up 5.0%	Down 12.0%	Up 56.0%

USDA GATS

 

Container shipments, minimum 200 m/t

 

Argentina Meat & Bone meal, 45 protein	USD 440/460 m/t CNF Asia
Paraguay Meat &Bone meal, 45 protein	USD 410/420 m/t CNF Asia
Australian MBM 45 protein    Australian MBM 50 protein    Australian Feathermeal, 80 protein    Australian Poultry Meal, pet food	USD 570/590 m/t CNF Asia  USD 620/640 m/t CNF Asia  USD 840/850 m/t CNF Asia  USD 1030/1050 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 775/790 m/t CNF Asia  USD 1060/1090 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 520/540 m/t
Feathermeal  80 protein USA	USD 700/720 m/t
Poultry meal  57 protein, Eastern USA	USD 660/680 m/t

*** see sources note

 

Animal protein prices in Asia seem to be wanting to move lower and sellers in Australia appear to be offering below the prices show above but, at least for this week, there doesn't seem to be a great deal of buying interest. Indonesia is the biggest importer in the area and with Ramadan in full swing the business is very quiet for now.

 

USA exporters also say the demand is quiet this week – partially due to Ramadan and partially due to the USA long July 4^th weekend.

 

With US vegetable protein prices dropping lower this week we will certainly see some pressure on animal protein prices and it is expected that prices, both domestic and export, should move lower next week.

 

There was some good news from Thailand for US animal protein exports as proposed changes to import requirements that would have limited US shipments have not been made. The problem was with wording to be required on animal health certificates and this has now been modified slightly so that both the USA producers and Thai importers will be able to meet all updated regulations. Thailand is not the biggest customer for US exports but the country did import about 15,000 m/t of US pork and poultry meal in 2013 (beef meal is not allowed)

 

USDA export statistics – Jan to May 2014 – in m/t

 

	Meat and bone meal Including pork and poultry	Feathermeal
Canada	18,100	3,700
Chile		18,600
China	18,100
Ecuador	3,300
Guatemala	6,600
Indonesia	29,900	41,200
Mexico	9,900
Thailand	2,900
Total all exports	101,500	63,600
Change 2014/2013	Up 2.0%	Down 19.0%

USDA GATS

 

 

SECTION 2 --- FISHMEAL COMMENTS AND PRICES: PERUVIAN

 

Up to the end of last Thursday the catch in Peru was up to 1.3 million m/t leaving 1.2 million m/t to go but the end of July. Fishing this week was up and down depending largely on local fishing bans but in four days about 80,000 m/t was landed. With just over three weeks left in July, assuming that fishing stays about the same, there could be 600/700,000 m/t of quota not landed, which is about 28% of the total quota – quite chunk, as it could mean as much as 150,000 m/t of fishmeal short.

 

However, one quite good bit of news is that, by all reports, there will be no major El Nino event in Peru this year, at least not in the next few months. According to the Peruvian authorities the sea temperatures are getting back to normal and the anchovy seem to be flowing back to their normal areas.

 

New export sales seem to be a little hard to find this week as buyers look to be out of the market – perhaps expecting lower prices. Looking at European prices for all fishmeal it is easy to see why the business is quiet, as into Europe, Peru and Chile are just a little too high priced:

 

European prices: (basis German port)

Herring fishmeal 72 protein:  USD 1,980 m/t   USD 27.50 protein unit

Danish fishmeal 64 protein:   USD 1,280 m/t   USD 20.00 protein unit

Peru fishmeal 64 protein:      USD 1,800 m/t   USD 28.12 protein unit

Chile fishmeal 65 protein:     USD  1,820 m/t   USD 28.00 protein unit

Iceland fishmeal 70 protein:  USD 1,900 m/t   USD 27.14 protein unit

 

(prices from commodity3.com)

 

There doesn't seem to be much reason for fishmeal prices to drop lower, even though vegetable protein prices are weak, as there is just not a great amount of supply but the demand side is still very good. It is true that prices could slip a little lower but if they do this then would become a buying opportunity and keep prices from dropping much. This year, fishmeal will probably all be about the supply and supply may just be very tight as we get through the next three months or so.

 

 

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	1740/1750 m/t
65/66 protein	1760/1770 m/t
67 protein standard steam	1780/1790 m/t
67 protein SD 150  TVN	1830/1850 m/t
67 protein SD 120 TVN	1850/1870 m/t
67 protein SD 1000 hist, 120 TVN	1880/1900 m/t
68 protein SD 500 hist, 120 TVN	1900/1920 m/t
Fish oil, crude bulk	1950/2050
Fish oil, crude drums	2150/2250
Fish oil, flexi tank	2100/2200
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