Weekly report -- August 23, 2014

 

 

Hammersmith Marketing Ltd - Grain Trading

 

WEEKLY FEED GRAIN AND PROTEIN REPORT   August 23, 2014

 

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Email:   tradegroup@hammersmith.biz    WWW:  hammersmithltd.blogspot.com       SKYPE: bacon39a  

 

 

SECTION 1:  FEED GRAINS -- VEGETABLE AND ANIMAL PROTEIN

 

It was a quiet week overall for corn but a tad more active for soybeans/soymeal. Export corn prices from the US were down by a couple of dollars while soybeans were down by USD 3 or 4 m/t.

 

Looking at corn, there was quite a bit of discussion of the effect of large European feed wheat supplies on the export business for corn, not just US corn but all corn. There was an article on Reuters that said that export sales of feed wheat from both France and the Ukraine could move into the market in Asia to the detriment of corn exports. That would not be any problem for France as they export little corn but could be important for the Ukraine and perhaps for the USA. Feed wheat is still a little too expensive to compete but it won't take much to move prices lower, especially if you are surrounded by mountains of feed wheat. Interestingly, in some major corn importing countries, like Egypt, where milling wheat imports are somewhat controlled, feed wheat imports will be almost impossible due to the governments fear that low cost feed wheat could slip into the milling wheat sector (as has happened in the past). Some countries do accept feed wheat but only if it is colored so that it can't be confused with or used as milling wheat.    

 

The Pro Farmer Crop Tour in the USA had determined that the actual corn yields will probably be higher than the USDA's last estimate – this will certainly help to keep prices from moving higher. One would have to look far and wide to find a corn expert who is looking for higher prices.

 

On the soybean side of things, the old crop futures prices are moving higher (old crop beans are in very short supply) and are now at a USD 45 m/t premium to new beans. The premium has been higher in past weeks but still USD 45 is a significant premium. Needless to say, once the crop is finished and harvest starts we will see the old and new prices come together.

 

The weather for the next couple of weeks looks very good for soybeans with a mixture of sunshine and rain in what seems to be about the correct proportions for much of the soybean area. There were a couple of experts commenting this week that new crop soybeans could drop by another USD 40 m/t of so but this will not be until we get into the harvest period.

 

So, as with corn, there are very few experts saying that soybean/soymeal prices are going to be moving higher.

 

 

USA crop condition report – Aug 19, 2014 – all in percentages

France crop condition as of August 14, 2014

 

	Very poor	Poor	Fair	Good to excellent
USA crop:
Wheat - spring	1	4	25	70
Corn	2	6	20	73
Soybeans	1	5	23	71
Sorghum	2	8	31	59
French crop:	Very poor	Poor	Fair	Good to excellent
Wheat, soft	1	7	21	70
Wheat, hard	1	8	27	64
Corn	1	3	11	85
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)	$15.00	Up $1.00	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)	$25/26.00	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	Steady	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)	$42/43.00	steady	X
US Gulf China: Panamax(8,000 disch)	$42/43.00	Up $1.00	X
US PNW Asia: 35/45,000 m/t	$31/33.00	Steady	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	$41/42.00	Up $1.00	x
France/Germany to Egypt: 50,000 m/t(10,000 disch)	$21/22.00	Up $1.00	X
France/Germany to Jordan: 35/45,000 m/t(4,000 disch)	$26/27.00	Up $1.00	X
France/Germany to Saudi Arabia: 50/60,000	$32/33.00	Steady	X
Argentina to Europe: 50/60,000 m/t	$20/21.00	up $1.00	X
Argentina to Egypt: 50,000 m/t(10,000 disch)	$30/31.00	Up $1.00	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	$28/29.00	Up $1.00	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	$26/27.00	Up $1.00	X
Brazil to Europe	$22/23.00	Steady	X
Black Sea to Spain: 30,000 m/t(5,000 disch)	$17/18.00	Up $1.00	x
Black Sea to Morocco: 30,000 m/t(3,000 disch)	$21/22.00	Up $1.00	x
Black Sea to Tunisia/Algeria: 30,000(5,000 disch)	$19/20.00	Up $1.00	x
Black Sea to East Med: 30,000 m/t(3,000 disch)	$14/15.00	Up $1.00	x
Black Sea to East Med: coaster	$40/43.00	Down $1.00	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)	$13/14.00	Up $1.00	x
Black Sea to Saudi Arabia – Jeddah – 50k	$25/26.00	Up $2.00	x
Baltic Dry Index	1088	Up 73	X
Baltic Capesize Index	2535	Up 384	X
Baltic Panamax Index	812	Up 9	X
Baltic Supramax Index	937	Up 60	X
Baltic Handisize Index	413	Up 31	x

*** see sources note

 

Some recent freight fixtures (June to August):

Uruguay to Egypt – 25,000 m/t soybeans – USD 35 m/t

Argentina to Morocco – 30,000 m/t corn – USD 29 m/t

Mexico to Turkey – 55,000 m/t wheat – USD 26 m/t

Russia to Saudi Arabia – 75,000 m/t barley – USD 19.50 m/t

 

 

 

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 288/297 Aug/Oct	x
Wheat, Ukraine 11.5 pro, 30,000+ m/t	USD 234/240 Aug/Oct	X
Wheat, Russia 12.5 pro, 30,000+ m/t	USD 251/255 Aug/Oct	X
Wheat, soft milling, France, Rouen port	USD 230/237 Aug/Sep	X
Wheat, milling, Argentina, upriver	USD 270/280 Dec/Jan 2015	x
Wheat, feed, Black Sea	USD 192/203 Aug/Sep	x
Wheat Bran, Black Sea	USD 175/180 Aug/Sep	x
Barley, France, Rouen port	USD 204/207 Aug/Sep	x
Barley, feed, Argentina, upriver	USD 225/230 Dec/Jan 2015	x
Barley, feed, Black Sea, 30,000+	USD 210/215 Aug/Sep	X
Barley, feed, USA Pacific Northwest	USD 265/270 Aug/Oct	X

 

Corn, FOB NOLA USA	USD 196/198 Aug/Oct	X
Corn, FOB USA Pacific northwest	USD 206/209 Aug/Oct	X
Corn, FOB Argentina port, upriver	USD 180/184 Aug/Oct	x
Corn, FOB Brazil port	USD 174/179 Aug/Oct	x
Corn, FOB Black Sea, 30,000+ m/t	USD 182/186 Oct/Nov new crop	x
Corn, FOB France	USD 220/223 Aug/Sep	X
Corn, FOB Romania	USD 184/190 Sep/Oct new crop	x
Sorghum, FOB Texas	USD  223/226 Aug/Oct	x
Sorghum, FOB Argentina port	USD  150/155 Aug/Oct	x

 

 

Soymeal,  48 protein, FOB NOLA	USD 545>>473  Aug>>Oct	x
Soymeal, 48 protein, USA, Rotterdam	USD 595>>528 Aug>>Oct	x
Soymeal, Argentina, Rotterdam	USD 525>>500 Aug>>Oct	x
Soymeal, 47 pro, FOB Argentina	USD 460>>420 Aug>>Oct	X
Soymeal, 48 protein, Brazil, Rotterdam	USD 515>>500 Aug>>Oct	X
Soymeal, FOB Brazil	USD 448>>412 Aug>>Oct	x
Soymeal, 48 protein, India FOB	USD 620/640	x
Soybeans, FOB NOLA	USD 460>>420 Aug>>Oct	X
Soybeans, Argentina, FOB	USD 475>>440 Aug>>Oct	x
Soybeans, Brazil, FOB	USD 495>>445 Aug>>Oct	X
Soybeans, Rotterdam	USD 528/535 Aug/Oct	X
Soybeans, Black Sea	USD 430/450 Sep/Oct	x

*** see sources note

 

Corn Gluten Meal, USA FOB NOLA	USD   680/690 m/t  Aug/Oct	x
Corn Gluten Feed, USA FOB NOLA	USD   178/183 m/t  Aug/Oct	x
DDGS corn, 35 profat, USA FOB NOLA	USD   200/205 m/t Aug/Oct	x
DDGS corn, 35 profat, USA CNF Asia	USD   249/255 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 continue to recover from the "China syndrome" that pushed prices down so far in recent weeks. With DDGS selling at a significant discount to corn, buyers who are able to push up DDGS usage in their feed formulations are moving to the maximum – nothing like saving a few dollars a ton on your feed costs. Unfortunately for export buyers, domestic transportation rates in the USA have moved higher so that CNF export port prices are up more than domestic prices. None the less, there is a great deal of export interest in DDGS at current price levels.

 

Last week there was quite a bit of interest out of Egypt for corn gluten meal in containers, this due to the smaller number of corn shipments from the US to Egypt and reduced opportunities for combination shipments. However, no matter how hard you try it is still much too expensive to ship corn byproducts by containers to Egypt and other destinations where you have to compete with bulk vessel shipments. It all comes down to higher cost of loading bulk containers, high unloading port costs, container demurrage and, of course, higher ocean freight. One cannot expect to offer 500 m/t of containerized CGM for the same price as 7,000 m/t CNF in a combo bulk vessel.

 

Looking at the prices for both corn gluten meal and corn gluten feed, they were both quoted up a little on the week but prices are really moving in a thin up and down range.

 

 

 

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 410/420 m/t CNF Asia
European MBM 50 protein    European Feathermeal, 75 protein    European poultry meal	USD 420/430 m/t CNF Asia  USD 770/780 m/t CNF Asia  USD 1000/1020 m/t CNF Asia
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 620/650 m/t CNF Asia  USD 880/890 m/t CNF Asia  USD 780/790 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 490/520 m/t
Feathermeal  80 protein USA	USD 720/740 m/t
Poultry meal  57 protein, Eastern USA	USD 660/680 m/t

*** see sources note

 

Animal protein prices are starting to slip a little lower this week both in the US domestic market and in the export market. Finally it seems that the fall in soymeal prices is having the expected result on MBM prices. US prices are all a little weaker as are South American prices but Australia seems to be the exception this week with their prices staying steady – although there are some stories of lower prices from Oz direct to major buyers.

 

On the lower end of the MBM market, we see that South American exporters are having trouble booking any new business in Asia as prices out of Europe are still much more competitive. However, as we get closer to the September period, where soymeal is very cheap, the price for all MBM is going to have to move lower if the producers want to do any reasonable amount of export business. Of course there are some applications that have to use MBM but for those that don't vegetable protein is certainly a lower cost alternative at present, even if you have to top up the amino acid levels.

 

So, on the price side, we should see some weakness in MBM prices but perhaps not in feathermeal or poultry meal.  

 

 

 

SECTION 2 --- FISHMEAL COMMENTS AND PRICES: PERUVIAN

 

The fishmeal market seems very quiet at present – is this the lull before the storm. Stocks of fishmeal in China are increasing a little as earlier shipments from Peru are arriving and pushing up stocks. According to trade reports the market price in China for fishmeal is lower than the replacement cost for Peruvian fishmeal, so no one is making any profit on sales.

 

China, which represents over 50% of the Peruvian export fishmeal business, is not buying at present but is expected to be back in the market in coming weeks. The current fishmeal stock levels in Peru are thought to be around 130,000 m/t but this won't last long if China gets back into a buying mood. China has been receiving about 50,000 m/t of Peruvian fishmeal per month, as an average, so could quickly snap up all the Peru stocks if they need them. 

 

The MSI Ceres report this week was saying that the price for Super Prime fishmeal should continue strong due to the limited supply but that the lower grade prices could slip lower. They feel that there could be a significant widening of the spread between quality grades and standard grades.

 

With little happening in the market, the talk all seems to be swinging toward the next fishing season and what the next quota could be – certainly gives everyone something to speculate about.

 

On the pricing side of things, no change in prices in Peru – this is now about a month with steady prices.

 

 

 

 

 

 

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	1,945

@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