Weekly report -- Aug 02, 2014

 

 

Hammersmith Marketing Ltd - Grain Trading

 

WEEKLY FEED GRAIN AND PROTEIN REPORT   August 02, 2014

 

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SECTION 1:  FEED GRAINS -- VEGETABLE AND ANIMAL PROTEIN

 

It was another down week for grains and oilseeds this week with soybeans and soymeal being hit the hardest by falling prices. Soybean prices dropped between USD 10 and 15 m/t while soymeal was down by USD 8 to 14 m/t. Corn prices were a little lower on the week – down by USD 3 or 4 m/t with all types of wheat also USD 3 or 4 m/t lower, although wheat prices were a little higher on Friday.

 

No matter which trade report you read this week they all seem to be saying weather, weather, weather, since everything looks very good for corn and soybeans. Early weather reports for the next two weeks still look good for the crops so there could be more downside risk on the way.  However, some grain forecasters are saying that prices have fallen so far that any further drop could be limited – but who is to know for sure.

 

On the corn side of things, not only are we looking at a great US crop but it was also announced in Brazil that the government is going to subsidize grain transportation by up to USD 500 million, this in order to get the Brazilian corn crop to the export ports at a reasonable cost. It looks like US and Brazil corn could be in a longer term fight for export business.

 

Some of the corn experts have said this week that the corn crop is now "made" and that there is little that the weather can do to reduce this year's crop. There are also a number of private sector yield estimates in the news, all of which are higher than the USDA's last estimates. Overall, looking at the corn market today there seems to be no reason to expect higher prices.

 

For soybeans, seems that the reason for weakness is that in August soybeans need rain and there is now some rain in the weather forecast – good for the soybeans and probably for the buyers. However, today there was a comment that the rain may not appear and if this is the case prices could move back a little higher next week – bit lower with rain does seem to be more likely.

 

So, at least for soybeans and soymeal, we are still having to watch the weather since August is a very important month for the development of soybeans (it is the reproductive stage, which begins with flowering).

 

Watch the weather for US soybean price direction.

 

 

USA Crop condition report – July 27, 2014 – all in percentages

 

	Very poor	Poor	Fair	Good	Excellent
Wheat - spring	1	4	25	56	14
Corn	1	5	19	53	22
Soybeans	1	5	23	55	16
Sorghum	2	7	31	49	11
	Last week %	This week %	Last year %	5 year  %
Winter – wheat harvested	75	83	80	80

 

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

 

US Gulf to Europe: 60/70,000 (10,000 disch)	$14.00	Steady	x
US Gulf to Spain: 30,000 m/t(5,000 disch)	$26/27.00	Steady	x
US Gulf to Egypt: Panamax(6,000 disch)	$24/25.00	Steady	x
US Gulf other Med: 25,000 MT(3,000 disch)	$32/33.00	Steady	x
US Gulf Israel: 50,000 MT	$26/27.00	Steady	x
US Gulf Morocco: 25,000(3,000 disch)	$30/31.00	Steady	x
US Gulf Nigeria: 30,000 m/t	$44/45.00	Up $1.00	x
US Gulf Turkey: 50,000	$27/28.00	Steady	x
US Gulf Yemen 35/45.000	$42/43.00	Steady	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	Steady	x
US PNW Asia: 35/45,000 m/t	$32/34.00	Steady	x
US PNW Japan: 50,000+ m/t(10,000 disch)	$26/27.00	Up $2.00	x
US PNW China: 50,000+ m/t(8,000 d1sch)	$25/26.00	Up $2.00	x
France/Germany to Algeria: 30,000 m/t(3,000 disch)	$21/22.00	Steady	x
France/Germany to Morocco: 30,000 m/t(3,000 disch)	$22/23.00	Steady	x
France/Germany to Yemen: 30,000 m/t	$39/40.00	Steady	x
France/Germany to Egypt: 50,000 m/t(10,000 disch)	$19/20.00	Steady	x
France/Germany to Jordan: 35/45,000 m/t(4,000 disch)	$24/25.00	Steady	x
France/Germany to Saudi Arabia: 50/60,000	$31/32.00	Steady	x
Argentina to Europe: 60,000 m/t	$19/20.00	Steady	X
Argentina to Egypt: 50,000 m/t(10,000 disch)	$29/30.00	Steady	x
Argentina to Algeria: 25/30,000 m/t(3,000 disch)	$31/32.00	Steady	x
Argentina to Morocco: 25,000 m/t(3,000 disch)	$28/29.00	Steady	x
Argentina to Saudi Arabia	$41.00	Steady	x
Argentina to South Africa 30,000 m/t(3,000 disch)	$29/30.00	steady	x
Argentina to Spain: 30,000 m/t	$30/31.00	Steady	X
Argentina to China: 50,000 m/t, with top-off	$40/42.00	Steady	x
Brazil to Algeria: 25,000 m/t	$30/31.00	Steady	x
Brazil to China: 55,000 m/t	$34/35.00	Steady	x
Brazil to Turkey/Egypt: 50,000 m/t	$24/25.00	Steady	x
Brazil to Morocco: 30,000 m/t	$30/31.00	Steady	x
Brazil to Europe	$25/26.00	Steady	x
Black Sea to Spain: 30,000 m/t(5,000 disch)	$16/17.00	Up $1.00	x
Black Sea to Morocco: 30,000 m/t(3,000 disch)	$19/20.00	Steady	x
Black Sea to Tunisia/Algeria: 30,000(5,000 disch)	$17/18.00	Steady	x
Black Sea to East Med: 30,000 m/t(3,000 disch)	$13/14.00	Up $1.00	x
Black Sea to East Med: coaster	$38/41.00	Up $3.00	x
Black Sea to Egypt: coaster 3,000 m/t	$43/45.00	down $2.00	x
Black Sea to Egypt: 40/50,000 m/t – (6,000 disch)	$11/12.00	Steady	x
Black Sea to Saudi Arabia – Jeddah – 50k	$23/24.00	Up $2.00	x
Baltic Dry Index	751	Down12	x
Baltic Capesize Index	1176	Down 17	x
Baltic Panamax Index	611	Up 5	x
Baltic Supramax Index	728	Up 49	x
Baltic Handisize Index	357	No change	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 239/255 Aug/Oct	x
Wheat, USA Hard Red Winter 12 protein	USD 295/304 Aug/Oct	x
Wheat, Ukraine 11.5 pro, 30,000+ m/t	USD 230/235 Aug/Sep	x
Wheat, Russia 12.5 pro, 30,000+ m/t	USD 240/245 Aug/Sep	x
Wheat, soft milling, France, Rouen port	USD 236/239 Aug/Sep	x
Wheat, milling, Argentina, upriver	USD 270/276 Dec/Jan 2015	x
Wheat, feed, Black Sea	USD 197/203 Aug/Sep	x
Wheat Bran, Black Sea	USD 200/205 Aug/Sep	x
Barley, France, Rouen port	USD 197/200 Aug/Sep	x
Barley, feed, Argentina, upriver	USD 218/225 Dec/Jan 2015	x
Barley, feed, Black Sea, 30,000+	USD 210/215 Aug/Sep	x
Barley, feed, USA Pacific Northwest	USD 280/285 Aug/Oct	x

 

Corn, FOB NOLA USA	USD 195/197 Aug/Oct	x
Corn, FOB USA Pacific northwest	USD 206/208 Aug/Oct	x
Corn, FOB Argentina port, upriver	USD 185/190 Aug/Oct	x
Corn, FOB Brazil port	USD 182/187 Aug/Oct	x
Corn, FOB Black Sea, 30,000+ m/t	USD 188/193 Oct/Nov new crop	x
Corn, FOB France	USD 222/229 Aug/Sep	x
Corn, FOB Romania	USD 194/198 Sep/Oct new crop	x
Sorghum, FOB Texas	USD  219/221 Aug/Sept	x
Sorghum, FOB Argentina port	USD  145/155 Aug/Oct	x

 

 

Soymeal,  48 protein, FOB NOLA	USD 510>>475  Aug>>Oct	X
Soymeal, 48 protein, USA, Rotterdam	USD 556>>525 Aug>>Oct	X
Soymeal, Argentina, Rotterdam	USD 516>>500 Aug>>Oct	X
Soymeal, 47 pro, FOB Argentina	USD 470>>415 Aug>>Oct	X
Soymeal, 48 protein, Brazil, Rotterdam	USD 507>>495 Aug>>Oct	X
Soymeal, FOB Brazil	USD 450>>420 Aug>>Oct	X
Soymeal, 48 protein, India FOB	USD 600/620	X
Soybeans, FOB NOLA	USD 480>>430 Aug>>Oct	X
Soybeans, Argentina, FOB	USD 470>>432 Aug>>Oct	X
Soybeans, Brazil, FOB	USD 520>>460 Aug>>Oct	X
Soybeans, Rotterdam	USD 550>>540 Aug>>Oct	X
Soybeans, Black Sea	USD 440/460 Sep/Oct	x

*** see sources note

 

Corn Gluten Meal, USA FOB NOLA	USD   690/700 m/t  Aug/Oct	x
Corn Gluten Feed, USA FOB NOLA	USD   175/180 m/t  Aug/Oct	x
DDGS corn, 35 profat, USA FOB NOLA	USD   177/186 m/t Aug/Oct	x
DDGS corn, 35 profat, USA CNF Asia	USD   250/257 m/t Aug/Oct	x
DDGS corn, France, at producer	USD   306/311 m/t Sep/Oct	x
DDGS corn, Rotterdam	USD   305/310 m/t Sep/Oct	x
DDGS wheat, France, at producer	USD   307/312 m/t Sep/Oct	x

*** see sources note

 

The DDGS situation with China has seriously shaken up the market, both domestic and export, and had an immediate effect on container prices into Asia from the US. With all that tonnage of DDGS that had been going to China in containers coming to a sudden halt, container lines are finding that they now have large supply of containers available a quite a bit of space on their vessels. For shippers out of the US there are certainly some freight opportunities in container, at least for the short term.

 

DDGS prices out of the US just get lower and lower and this is certainly a good time for export buyers to ramp up their DDGS usage or, for those who don't use DDGS, to look at ways to use it. When you see 35 profat DDGS selling for less than wheat bran then you know that you have a great price.  

 

Corn gluten feed prices are not as soft as for DDGS but then CGF is not the same size export product and depends much more on the domestic US market but the DDGS drop should be exerting a tad more effect on CGF. With corn gluten meal, while prices are lower, there is still the high price for fishmeal and other animal protein that is helping to keep CGM prices firm, CGM is in quite a specialized sector of the protein market.

 

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 660/680 m/t CNF Asia  USD 890/910 m/t CNF Asia  USD 775/790 m/t CNF Asia  USD 1000/1030 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

 

Trade publications in the USA are saying this week that animal protein prices are going to have to move lower the closer that we get to the US harvest. US soymeal/bean prices are much lower going into the harvest period and no one much is going to be interested in buying MBM, etc. at a significant premium over soymeal. However, so far, there is really very little weakness in the market – that will probably come as we get closer to the end of August when we are staring at the US harvest.

 

Export business has been a little slow this week and what business there is is looking for lower prices and later shipment.

 

All is quiet in Asia and export prices are pretty well unchanged on the week but watch for buying opportunities and lower prices as we move through August.

  

 

SECTION 2 --- FISHMEAL COMMENTS AND PRICES: PERUVIAN

 

As everyone knows by now, the government of Peru extended the fishing season by 10 days until August 10^th – it will be very interesting to see how the fishing goes for the 10 days. According to the reports out of Peru, the fishing at the end of July was quite poor and no one expects much of an improvement for a few days in August.

 

There has not been much excitement in the export side of fishmeal in Peru with sales being very quiet and unsold stocks sitting at about 150,000 m/t. Trade reports say that the fishmeal demand in China is down a little as the aquafeed demand in the country is off a little due to all kinds of weather problems affecting the aqua industry. The high consumption period for fishmeal by China is also coming to an end so no one much is looking for big orders from China in the short term.

 

Looking at the Peru fishmeal exports for the first six months of 2014, at 543,000 m/t, China represents close to 60% of the export market with Germany at about 12.7% and Japan at 7.0% -- the top five destinations for Peruvian fishmeal represent 90% of exports: China, Germany, Japan, Chile, Vietnam.

 

There were quite a few holidays in Peru this week and many offices stayed closed for the week or were working with short staff but all will be back to normal next week. Now all we have to hope for is a little rush of business to keep everyone busy.

 

Price have not done anything in the past week, mainly because of the holidays and the low sales activity but prices in Europe were up just a little. However, there seems to be no good reason for a major change in fishmeal prices at present.

 

There was an article in the US this week about a system of filtration, developed by GEA Filtration, which is said to reduce both salt and histamine in fishmeal during manufacture without having any adverse effect on protein or on overall fishmeal quality.

 

 

Peru Fishing Season Weekly update – July 31, 2014

 

Season	Zone		Quota	Caught	%	Remaining	%
1st	North/Central		2,530,000	1,647,600	65.1	882,400	34.9
1st	South		234,300	11,400	4.9	222,900	95.1

@Andes Connections

 

European fishmeal prices – FOB North German port.

 

Type	Protein %	Price per m/t USD
Herring fishmeal	72 protein	1,955
Danish fishmeal	64 protein	1,720
Peru fishmeal	64 protein	1,805
Chile fishmeal	65 protein	1,825
Iceland fishmeal	70 protein	1,944

@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	1720/1730 m/t
65/66 protein	1750/1760 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	1860/1880 m/t
68 protein SD 500 hist, 120 TVN	1880/1900 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