Weekly report -- July 19, 2014

 

Hammersmith Marketing Ltd - Grain Trading

 

WEEKLY FEED GRAIN AND PROTEIN REPORT   July 19, 2014

 

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SECTION 1:  FEED GRAINS -- VEGETABLE AND ANIMAL PROTEIN

 

Corn prices were all a little lower this week but not by very much – between USD 2 and 3 m/t while for old crop soybeans and soymeal the market moved lower and new crop moved higher. The huge premium of old crop beans versus new crop is moving a little lower every week.

 

On the corn side of things, most everything still looks very good. The pollination is about 50% complete and experts say that the weather has been close to perfect. Corn is a self-pollinating crop so you don't have to worry about how the bees are doing just about the weather. It seems that if the weather is not too hot and there is good moisture then pollination should be just fine but get it too hot and dry and pollination rates and ultimately yields fall of very badly. But so far this season all looks very good.

 

The weather has been so good this year that some experts are calling for record yield levels for corn, three or four percent higher than the last USDA corn yield forecast. The weather for the next couple of weeks looks to be quite good with temperatures just a little below average – so perhaps, record crop here we come.

 

As mentioned above, soybeans for new crop were up a little on the week overall but were down a little on Friday as the very good weather is putting pressure on soybeans as it has on corn. Weather in most soybean areas looks to be just about perfect for the next two weeks but of course this can change very quickly.

 

The exports bookings for soybeans have been climbing at an amazing rate with China seeming to be in the market almost every day for more US soybeans. This very strong export business should help to keep prices reasonably steady even if the great growing weather is trying to push prices lower.

 

At this point it is impossible to advise that prices will move higher – there are just very few bullish factors in the market for either soybeans, soymeal or corn.    

 

 There was quite a surprise this week for all exporters of corn and sorghum to the EU when the EU tacked on a duty on imports of Euro 5.32 m/t (USD 7.18) – this is the first duty on these items in about four years. The latest USDA WASDE projections had the EU importing 13 million m/t of corn in 2014/15, so now one has to wonder what effect the new duty will have on the imports.

             

USA Crop condition report – July 14, 2014 – all in percentages

 

	Very poor	Poor	Fair	Good	Excellent
Wheat - spring	2	4	24	57	13
Corn	1	4	19	54	22
Soybeans	1	5	22	56	16
Sorghum	1	6	31	51	11
	Last week %	This week %	Last year %	5 year  %
Winter – wheat harvested	57	66	69	68

 

 

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

 

US Gulf to Europe: 60/70,000 (10,000 disch)	$14.00		x
US Gulf to Spain: 30,000 m/t(5,000 disch)	$26/27.00		x
US Gulf to Egypt: Panamax(6,000 disch)	$24/25.00		x
US Gulf other Med: 25,000 MT(3,000 disch)	$32/33.00	Up $1.00	x
US Gulf Israel: 50,000 MT	$26/27.00		x
US Gulf Morocco: 25,000(3,000 disch)	$30/31.00	Up $1.00	x
US Gulf Nigeria: 30,000 m/t	$41/42.00		x
US Gulf Turkey: 50,000	$27/28.00		x
US Gulf Yemen 35/45.000	$42/43.00		x
US Gulf Japan: Panamax(10,000 disch)	$40/41.00		X
US Gulf China: Panamax(8,000 disch)	$40/41.00	Down $1.00	X
US PNW Asia: 35/45,000 m/t	$32/34.00	Down $1.00	X
US PNW Japan: 50,000+ m/t(10,000 disch)	$23/24.00	Up $1.00	x
US PNW China: 50,000+ m/t(8,000 d1sch)	$22/23.00		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		X
Argentina to Egypt: 50,000 m/t(10,000 disch)	$29/30.00		X
Argentina to Algeria: 25/30,000 m/t(3,000 disch)	$31/32.00		X
Argentina to Morocco: 25,000 m/t(3,000 disch)	$28/29.00		X
Argentina to Saudi Arabia	$41.00		X
Argentina to South Africa 30,000 m/t(3,000 disch)	$30/31.00		x
Argentina to Spain: 30,000 m/t	$30/31.00		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		X
Black Sea to Tunisia/Algeria: 30,000(5,000 disch)	$16/17.00		x
Black Sea to East Med: 30,000 m/t(3,000 disch)	$12/13.00		x
Black Sea to East Med: coaster	$35/37.00	Up $4.00	x
Black Sea to Egypt: coaster 3,000 m/t	$45/47.00	Up $3.00	x
Black Sea to Egypt: 40/50,000 m/t – (6,000 disch)	$10/11.00		x
Black Sea to Saudi Arabia – Jeddah – 50k	$21/22.00		X
Baltic Dry Index	732	Down 82	X
Baltic Capesize Index	1235	Down 230	X
Baltic Panamax Index	586	Down 93	X
Baltic Supramax Index	659	Down 20	x
Baltic Handisize Index	372	Down 18	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 230/247 Jul/Oct	X
Wheat, USA Hard Red Winter 12 protein	USD 288/303 Jul/Oct	x
Wheat, Ukraine 11.5 pro, 30,000+ m/t	USD 235/242 Jul/Aug new crop	x
Wheat, Russia 12.0 pro, 30,000+ m/t	USD 241/246 July/Aug new crop	x
Wheat, soft milling, France, Rouen port	USD 249/250 July/Aug	x
Wheat, milling, Argentina, upriver	USD 260/270 Dec/Jan 2015	x
Wheat, feed, Black Sea	USD 224/230 July/Aug new crop	x
Wheat Bran, Black Sea	USD 215/225 Jun/Aug	x
Barley, France, Rouen port	USD 213/216 July/Aug	x
Barley, feed, Argentina, upriver	USD 220/225 Dec/Jan 2015	x
Barley, feed, Black Sea, 30,000+	USD 212/217 July/Aug new crop	x
Barley, feed, USA Pacific Northwest	USD 280/285 Jul/Sep	x

 

Corn, FOB NOLA USA	USD 193/195 July/Sep	x
Corn, FOB USA Pacific northwest	USD 203/207 July/Sep	x
Corn, FOB Argentina port, upriver	USD 188/192 July/Sep	x
Corn, FOB Brazil port	USD 185/188 July/Sep new crop	x
Corn, FOB Black Sea, 30,000+ m/t	USD 184/189 Oct/Nov new crop	x
Corn, FOB France	USD 234/242 July/Aug	x
Corn, FOB Romania	USD 198/205 Sep/Oct new crop	x
Sorghum, FOB Texas	USD  215/218 Aug/Sept	x
Sorghum, FOB Argentina port	USD  155/165 July/Aug	x

 

 

Soymeal,  48 protein, FOB NOLA	USD 495>>475 Jul>>Sep	x
Soymeal, 48 protein, USA, Rotterdam	USD 550>>525 Jul>>Sep	x
Soymeal, Argentina, Rotterdam	USD 492>>485 Jul>>Sep	x
Soymeal, 47 pro, FOB Argentina	USD 438>>400 Jul>>Sep	x
Soymeal, 48 protein, Brazil, Rotterdam	USD 495>>488 Jul>>Sep	x
Soymeal, FOB Brazil	USD 445>>425 Jul>>Sep	X
Soymeal, 48 protein, India FOB	USD 580/610	x
Soybeans, FOB NOLA	USD 490>>455 Jul>>Sep	X
Soybeans, Argentina, FOB	USD 475>>443 Jul>>Sep	X
Soybeans, Brazil, FOB	USD 485>>455 Jul>>Sep	X
Soybeans, Rotterdam	USD 545>>530 Jul>>Sep	X
Soybeans, Black Sea	USD 475/500 Sep/Oct	x

*** see sources note

 

Corn Gluten Meal, USA FOB NOLA	USD   700/720 m/t  Jul/Sep	x
Corn Gluten Feed, USA FOB NOLA	USD   190/195 m/t Jul/Sep	x
DDGS corn, 35 profat, USA FOB NOLA	USD   200/205 m/t July>>Sep	X
DDGS corn, 35 profat, USA CNF Asia	USD   278/284 m/t July>>Sep	x
DDGS corn, France, at producer	USD   317/323 m/t Sep/Oct	x
DDGS corn, Rotterdam	USD   318/322 m/t Sep/Oct	x
DDGS wheat, France, at producer	USD   317/325 m/t Sep/Oct	x

*** see sources note

 

It was difficult to get a good idea of corn by-product prices this week as or regular sources were very far apart on where they thought prices should be pegged. According to the US Grain Council report the corn gluten feed and meal prices were up strongly this week but another couple of sources were not nearly so bullish on prices. The range in prices on CGM was from USD 665 up to USD 720 FOB NOLA which is quite a spread with CGF ranging from a low of USD 160 m/t to a high of USD 195 m/t also FOB NOLA. Even DDGS prices had quite a range from a low of USD 180 m/t to a high of USD 205 m/t, also FOB NOLA.

 

The problem seems to be that no one knows where corn prices are going which leads to a huge amount of variance in market prices. Some DDGS sellers are saying that the prices are heading higher in coming weeks which is part of the reason for the wide spread this week, as some sellers are looking more to the future and higher prices while others are still chugging along at low current market levels.

 

If one looks at the prices above for CGF and DDGS and how close they are getting it certainly looks like DDGS at these levels is quite a bargain.

 

 

 

Container shipments, minimum 200 m/t

 

Argentina Meat & Bone meal, 45 protein    Argentina poultry meal, 57/60 protein	USD 480/490 m/t CNF Asia  USD 630/640 m/t CNF Asia
Paraguay Meat &Bone meal, 45 protein	USD 410/430 m/t CNF Asia
European MBM 50 protein    European Feathermeal, 75 protein    European poultry meal	USD 435/440 m/t CNF Asia  USD 725/730 m/t CNF Asia  No offers
Australian MBM 45 protein    Australian MBM 50 protein    Australian Feathermeal, 80 protein    Australian Poultry Meal, pet food	USD 595/615 m/t CNF Asia  USD 645/665 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 680/700 m/t CNF Asia  USD 890/910 m/t CNF Asia  USD 775/790 m/t CNF Asia  USD 1050/1090 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 530/550 m/t
Feathermeal  80 protein USA	USD 720/740 m/t
Poultry meal  57 protein, Eastern USA	USD 680/700 m/t

*** see sources note

 

Meat and bone meal export prices moved a little higher this week out of the USA and Australia but most market experts don't think that higher prices will last in light of the lower vegetable protein prices for September/October. However we could still see some firmness in prices for near term shipments. In the US there has been good demand for feathermeal that is pushing prices up a little and this will move into the export market in coming days.

 

 

SECTION 2 --- FISHMEAL COMMENTS AND PRICES: PERUVIAN

 

 

It was not too bad a week for fishing in Peru with the weather cooperating a little but then the industry was hit with a 5 day fishing ban in three areas, due to the high percentage of juvenile fish. There is quite a bit of talk in Peru that the fishing season may be extended by a bit so that more of the quota can be landed. However, the government is very concerned about the effect that this could have on the next spawning season (if the percentage of pregnant females caught is high).

 

Both the industry and the government seem to be unsure regarding what the effect could be if the season is extended and no one wants to hurt the late 2014 fishing for a couple of extra weeks in August. At least one US trade report is saying that animal protein in the US is in quite short supply but with short supply and higher prices the end users will just switch over to vegetable protein. At the end of the day it seems that supply/demand ratios always work out: short supply with good demand rallies prices then the higher prices cut off demand and the supply looks to be enough and prices fall – as usual, Economics 101.

 

The sales side of the market was quite slow last week as buyers continue to wait for lower prices and in some of the lower grades there was a softening of the trade indicated price – down by USD 10 to 20 m/t but Prime and Super Prime prices were holding firm.

 

According to trade reports at the end of the week there are now unsold stocks of fishmeal in Peru of just over 140,000 m/t. This is still not a huge amount of stock when you consider how long it will have to last but with some of the major buyers well covered for now, the stocks do create a little bit of a burden for the market.

 

When you consider that the current Peru supply, plus a little more production for the balance of July, will have to cover demand for 5 months or so then it starts to look like the stocks are not too high at all so one could expect prices to show very little weakness in coming weeks.

 

There was an article in the US press this week about a US company that has developed a method to produce a high protein aquafeed meal from barley. They say that they can raise the protein from 12 percent to close to fishmeal levels at a very competitive price to fishmeal. Their work so far has shown that the barley products works well in the diets of carnivorous fish like trout and Atlantic salmon. The company says that they will be able to market at well below the fishmeal price but that market availability is still for the future.

 

As we have seen for the past twenty years, there are many, many people trying to turn a wide variety of things into viable protein feed ingredients for the aquafeed industry: flies, worms, algae, seaweed, to name a few, and now barley.

 

 

Peru Fishing Season Weekly update – July 18, 2014

 

Season	Zone		Quota	Caught	%	Remaining	%
1st	North/Central		2,530,000	1,613,883	63.8	916,117	36.2
1st	South		243,300	10,443	4.3	232,857	95.7

@Andes Connections

 

 

 

 

 

European fishmeal prices – FOB North German port.

 

Type	Protein %	Price per m/t USD
Herring fishmeal	72 protein	1,971
Danish fishmeal	64 protein	1,730
Peru fishmeal	64 protein	1,800
Chile fishmeal	65 protein	1,820
Iceland fishmeal	70 protein	1,890

@Commodity3

 

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	1800/1820 m/t
67 protein SD 150  TVN	1820/1840 m/t
67 protein SD 120 TVN	1840/1860 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	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

           

*** 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