Weekly report -- August 16, 2014

 

 

Hammersmith Marketing Ltd - Grain Trading

 

WEEKLY FEED GRAIN AND PROTEIN REPORT   August 16, 2014

 

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SECTION 1:  FEED GRAINS -- VEGETABLE AND ANIMAL PROTEIN

 

The USDA WASDE report that was issued this week did not have much of an effect on the corn market and, even though the expected yield was increased to a record level and the size of the corn crop looks to be amazing, many of the factors on yield and crop were already in the market so there was little reason for corn to move lower. Actually, in some cases, experts felt that the USDA report did not go high enough on yield or crop size.

 

Most experts seem to feel that corn prices will just drift along for now with no good reason to go much lower or much higher that is until there is some new market shaking news.

 

One thing on corn is the reports from Europe on the expected high stocks of feed wheat and record barley crops. One must wonder if all these feed grains are going to eat into the corn export business in countries that can benefit from low European feed grain export prices. Will US corn export numbers be affected or perhaps Ukraine corn exports – all that feed wheat will have to go somewhere.

 

Soybean prices were lower on the week, pushed lower by a slightly bearish WASDE report and some very beneficial rain in the weather for the next few days. Seems that now is about the perfect time for rain for soybeans and the rain is co-operating.

 

Looking at the futures side of things on beans, the commodity funds are still very short soybean futures, so they are looking for lower prices but any rally in beans could see the funds cover some of their shorts and push prices higher --- but for now there does not seem to be too much reason for a rally – unless the needed rains does not appear.

 

With soybeans, you need to keep your eyes on the weather for the next few weeks as this is an important time in making the crop.

 

 

USA Crop condition report – Aug 12, 2014 – all in percentages

 

I have changed the report this week to show "good to excellent" as it makes much more sense to see how much of the crop is good and above. When 70% and more is in this category it is looking like a great crop year. Even "fair" is not all that bad.

 

And, just for comparison I have included the latest information on the French grain crop.

 

	Very poor	Poor	Fair	Good to excellent
USA crop:
Wheat - spring	1	4	25	70
Corn	2	5	20	73
Soybeans	2	5	23	70
Sorghum	2	8	31	59
French crop:
Wheat, soft	1	7	21	70
Wheat, hard	1	8	27	64
Corn	1	3	13	83
Barley, winter	2	7	20	71
Barley, spring	2	10	26	62

 

 

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)	$25/25.00	down $1.00	x
US Gulf other Med: 25,000 MT(3,000 disch)	$32/33.00	down $1.00	x
US Gulf Israel: 50,000 MT	$26/27.00	down $1.00	x
US Gulf Morocco: 25,000(3,000 disch)	$30/31.00	down $1.00	x
US Gulf Nigeria: 30,000 m/t	$44/45.00	Steady
US Gulf Turkey: 50,000	$27/28.00	down $1.00	x
US Gulf Yemen 35/45.000	$42/43.00	Steady	x
US Gulf Japan: Panamax(10,000 disch)	$42/43.00	steady	X
US Gulf China: Panamax(8,000 disch)	$41/42.00	Steady	x
US PNW Asia: 35/45,000 m/t	$31/33.00	Down $1.00	X
US PNW Japan: 50,000+ m/t(10,000 disch)	$27/28.00	Steady	X
US PNW China: 50,000+ m/t(8,000 d1sch)	$26/27.00	Steady	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	$40/41.00	Steady	X
France/Germany to Egypt: 50,000 m/t(10,000 disch)	$20/21.00	Up $1.00	X
France/Germany to Jordan: 35/45,000 m/t(4,000 disch)	$25/26.00	Up $1.00	X
France/Germany to Saudi Arabia: 50/60,000	$32/33.00	Up $1.00	x
Argentina to Europe: 50/60,000 m/t	$19/20.00	down $1.00	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	$38/40.00	Steady	x
Brazil to Algeria: 25,000 m/t	$27/29.00	steady	x
Brazil to China: 55,000 m/t	$32/33.00	Steady	x
Brazil to Turkey/Egypt: 50,000 m/t	$24/25.00	Steady	x
Brazil to Morocco: 30,000 m/t	$25/27.00	steady	x
Brazil to Europe	$22/23.00	Steady	x
Black Sea to Spain: 30,000 m/t(5,000 disch)	$16/17.00	Steady	x
Black Sea to Morocco: 30,000 m/t(3,000 disch)	$20/21.00	Up $1.00	x
Black Sea to Tunisia/Algeria: 30,000(5,000 disch)	$18/19.00	Up $1.00	X
Black Sea to East Med: 30,000 m/t(3,000 disch)	$13/14.00	Steady	X
Black Sea to East Med: coaster	$41/44.00	Steady	X
Black Sea to Egypt: coaster 3,000 m/t	$45/47.00	Steady	x
Black Sea to Egypt: 40/50,000 m/t – (6,000 disch)	$12/13.00	Up $1.00	X
Black Sea to Saudi Arabia – Jeddah – 50k	$23/24.00	Steady	X
Baltic Dry Index	1015	Up 238	x
Baltic Capesize Index	2151	Up 985	x
Baltic Panamax Index	803	Up 179	x
Baltic Supramax Index	877	Up 73	x
Baltic Handisize Index	382	Up 19	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 252/260 Aug/Oct	x
Wheat, USA Hard Red Winter 12 protein	USD 283/296 Aug/Oct	x
Wheat, Ukraine 11.5 pro, 30,000+ m/t	USD 230/235 Aug/Oct	x
Wheat, Russia 12.5 pro, 30,000+ m/t	USD 245/248 Aug/Oct	X
Wheat, soft milling, France, Rouen port	USD 234/237 Aug/Sep	x
Wheat, milling, Argentina, upriver	USD 260/270 Dec/Jan 2015	x
Wheat, feed, Black Sea	USD 196/203 Aug/Sep	x
Wheat Bran, Black Sea	USD 185/190 Aug/Sep	x
Barley, France, Rouen port	USD 203/207 Aug/Sep	x
Barley, feed, Argentina, upriver	USD 220/228 Dec/Jan 2015	x
Barley, feed, Black Sea, 30,000+	USD 210/215 Aug/Sep	x
Barley, feed, USA Pacific Northwest	USD 275/280 Aug/Oct	x

 

Corn, FOB NOLA USA	USD 194/198 Aug/Oct	x
Corn, FOB USA Pacific northwest	USD 209/213 Aug/Oct	x
Corn, FOB Argentina port, upriver	USD 184/187 Aug/Oct	x
Corn, FOB Brazil port	USD 178/182 Aug/Oct	x
Corn, FOB Black Sea, 30,000+ m/t	USD 183/188 Oct/Nov new crop	x
Corn, FOB France	USD 222/225 Aug/Sep	x
Corn, FOB Romania	USD 185/191 Sep/Oct new crop	x
Sorghum, FOB Texas	USD  225/228 Aug/Oct	x
Sorghum, FOB Argentina port	USD  150/155 Aug/Oct	x

 

 

Soymeal,  48 protein, FOB NOLA	USD 495>>465  Aug>>Oct	x
Soymeal, 48 protein, USA, Rotterdam	USD 550>>525 Aug>>Oct	x
Soymeal, Argentina, Rotterdam	USD 525>>495 Aug>>Oct	x
Soymeal, 47 pro, FOB Argentina	USD 465>>425 Aug>>Oct	x
Soymeal, 48 protein, Brazil, Rotterdam	USD 505>>495 Aug>>Oct	x
Soymeal, FOB Brazil	USD 450>>415 Aug>>Oct	x
Soymeal, 48 protein, India FOB	USD 600/620	x
Soybeans, FOB NOLA	USD 425>>410 Aug>>Oct	x
Soybeans, Argentina, FOB	USD 435>>425 Aug>>Oct	X
Soybeans, Brazil, FOB	USD 460>>435 Aug>>Oct	X
Soybeans, Rotterdam	USD 485/510 Aug/Oct	x
Soybeans, Black Sea	USD 430/450 Sep/Oct	X

*** see sources note

 

Corn Gluten Meal, USA FOB NOLA	USD   670/680 m/t  Aug/Oct	x
Corn Gluten Feed, USA FOB NOLA	USD   172/177 m/t  Aug/Oct	X
DDGS corn, 35 profat, USA FOB NOLA	USD   198/206 m/t Aug/Oct	x
DDGS corn, 35 profat, USA CNF Asia	USD   241/250 m/t Aug/Oct	x
DDGS corn, France, at producer	USD   312/315 m/t Sep/Oct	X
DDGS corn, Rotterdam	USD   312/315 m/t Sep/Oct	X
DDGS wheat, France, at producer	USD   310/313 m/t Sep/Oct	x

*** see sources note

 

DDGS prices took another jump higher this week as it is recovering a little from the sudden drop that had been caused by China stopping US DDGS imports. The very low prices had attracted quite a bit of export interest but so far about all that it has been is interest with little booked. As is normal, the export buyers are bidding well under current market prices. Supplies of DDGS in the US are very good and domestic buyers are benefiting but it looks like the prices for Oct/Nov are moving higher leaving most of the opportunities for low prices in September.

 

Depending on who you talk to, the price for corn gluten meal is either steady or down a little in the export market. Domestic prices seem to be unchanged on the week. Corn gluten feed too is about unchanged on the week but with DDGS moving higher CGF will start to get a little more attention from domestic US buyers.

 

There could be some further price strength in export DDGS, especially CNF prices due to expected freight increases, but CGM and CGF look to be just moving in a narrow price range for now with nothing much pushing them up or down.

 

 

 

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 595/610 m/t CNF Asia  USD 655/675 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 650/670 m/t CNF Asia  USD 880/890 m/t CNF Asia  USD 790/800 m/t CNF Asia  USD 950/1000 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 500/520 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

 

Animal protein activity seemed to be very quiet this week with not much happening to prices. However the US export meat and bone meal price dropped a little as did pet food grade poultry meal – both of these price drops were following changes in the US domestic market. All the experts feel that the animal protein prices will have to move lower, especially MBM, as the premium versus soymeal is too far out of whack to stay that way for long – and it doesn't look much like soymeal will move higher so MBM should drop lower. So, looks like buyers of animal proteins should hold off buying for a bit and wait for prices to slide lower.  

 

 

 

 

SECTION 2 --- FISHMEAL COMMENTS AND PRICES: PERUVIAN

 

So the Northern fishing season in Peru is all done and dusted, as they say, and we came up short on the quota by 860,000 m/t, just shy of 210,000 m/t of fishmeal.  210,000 m/t is a pretty fair chunk of fishmeal and is equal to about one third of all Peru's exports in the first seven months of 2014. Ah well, what is to be done.

 

So now, according to the trade, there are unsold stocks of about 150,000 m/t of fishmeal that will have to last until about December 2014, around four months. In the first seven months of 2014, the shipments averaged out at about 90,000 m/t per month which would make it look like there is only about 1.6 month's supply left but you can't just look at it that way. The fishmeal business seems to come in lumps and we probably don't have any big purchasing lumps in the next couple of months with China being in quite good shape and other buyers at the end of their seasons. However, all that being said, it will not take too much of an increase in demand to create a very short position for fishmeal for the next many weeks.

 

With the low stock levels any small increase in demand could push prices higher and the low stocks should certainly keep prices from making any move to lower levels.

 

There were notes in a couple of the trade reports that Peru has not joined the countries with sanctions on Russia and there has been some speculation that Peru could be in for in excess of USD 1 billion in new export business to Russia. Will some of that business be fishmeal or will it all be food items – it is a little too early to tell.

 

For now the main fishing is over, the stocks are known, the prices should not move lower so now all we need to do is find a few buyers.     

 

Peru Fishing Season Weekly update – August 10, 2014

 

Season	Zone		Quota	Caught	%	Remaining	%
1st	North/Central Final total		2,530,000	1,667,900	65.9	862,100	34.1
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	1,965
Danish fishmeal	64 protein	1,737
Peru fishmeal	64 protein	1,795
Chile fishmeal	65 protein	1,815
Iceland fishmeal	70 protein	1,935

@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	2500/2700

*** 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