Weekly Report -- Sep 06, 2014

 

 

 

Hammersmith Marketing Ltd - Grain Trading

WEEKLY FEED GRAIN AND PROTEIN REPORT   September 06, 2014

 

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SECTION 1:  US FEED GRAINS -- VEGETABLE AND ANIMAL PROTEIN

 

 

Looking at the week, we once again had a down week overall for corn, soybeans and soymeal prices, although things would have been quite a bit lower had the US market not rallied higher on Friday.

 

Reading various trade reports this weekend, it seems that the majority of the experts are of the opinion that the USDA will increase their estimate corn yields in next week's WASDE Report. We are already looking at USDA corn yields being 5.4 percent up on last year with most experts saying the yields will move another 1.5 to 2 percent higher – this may not sound like much but it certainly is when considered over what will be a record crop. Now it will just be an even bigger record crop.

 

The corn market did move a little higher on Friday which was due to weather concerns with what seems to be cold weather and perhaps a risk of frost in the northern reaches of the corn-belt. The corn is not far enough along that it would survive a serious frost. Experts are saying that there is only a very small risk of frost and even that would be in a small area of the corn-belt, not enough to have much of an effect but enough to excite the market.

 

The biggest risk seems to be that colder weather could lengthen the time from now to harvest as corn crops may not dry as quickly – causing some harvest delays.

 

Informa came out with their yield estimates last week and they are at 170.3 bushels per acre compared to the USDA's 167.4 – up by 1.7%.

 

New crop soybean futures have been doing their best to get down to new low price levels but just can't seem to stay there as new buying interest pushes prices up a little – or it could be short covering that is causing the small increases.

 

The cold weather than had corn prices moving higher is actually much more of a threat to soybeans and if the cold weather and possible frost does get serious then we should see a run up in soybean prices next week.

 

As with corn, everyone is expecting the USDA crop yield forecast to move higher next week with Informa looking for about a 3.5% increase in the new crop yields, much more than they see in the corn yields.

 

For the next few days, prices up/down will be following weather developments and the latest expert opinions on what the USDA WASDE report will have to say. Today, the weather looks bullish while the WASDE looks bearish, so it should be an interesting week.  

 

 

 

 

 

 

 

 

USA crop condition report – September 02 26, 2014 – all in percentages

France crop condition as of September 04, 2014

 

	Very poor	Poor	Fair	Good to excellent
USA crop:
Wheat - spring	1	7	29	63
Corn	2	5	19	74
Soybeans	1	5	22	72
Sorghum	3	9	31	57
French crop:	Very poor	Poor	Fair	Good to excellent
Corn	0	2	11	87
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)	$16.00	Up $1.00	X
US Gulf to Spain: 30,000 m/t(5,000 disch)	$27/28.00	Up $1.00	X
US Gulf to Egypt: Panamax(6,000 disch)	$26/27.00	Up $1.00	x
US Gulf other Med: 25,000 MT(3,000 disch)	$33/34.00	Up $1.00	x
US Gulf Israel: 50,000 MT	$27/28.00	Up $1.00	X
US Gulf Morocco: 25,000(3,000 disch)	$31/32.00	Up $1.00	X
US Gulf Nigeria: 30,000 m/t	$45/46.00	Up $1.00	x
US Gulf Turkey: 50,000	$28/29.00	Up $1.00	x
US Gulf Yemen 35/45.000	$44/45.00	Up $1.00	x
US Gulf Japan: Panamax(10,000 disch)	$43/44.00	Up $1.00	X
US Gulf China: Panamax(8,000 disch)	$45/46.00	Up $2.00	X
US PNW Asia: 35/45,000 m/t	$33/35.00	Up $2.00	x
US PNW Japan: 50,000+ m/t(10,000 disch)	$28/29.00	Up $1.00	x
US PNW China: 50,000+ m/t(8,000 d1sch)	$27/28.00	Up $1.00	x
France/Germany to Algeria: 30,000 m/t(3,000 disch)	$22/23.00	Up $1.00	x
France/Germany to Morocco: 30,000 m/t(3,000 disch)	$23/24.00	Up $1.00	x
France/Germany to Yemen: 30,000 m/t	$43/44.00	Up $1.00	X
France/Germany to Egypt: 50,000 m/t(10,000 disch)	$23/24.00	Up $1.00	X
France/Germany to Jordan: 35/45,000 m/t(4,000 disch)	$28/29.00	Up $1.00	X
France/Germany to Saudi Arabia: 50/60,000	$34/35.00	Up $1.00	X
Argentina to Europe: 50/60,000 m/t	$21/22.00	Up $1.00	x
Argentina to Egypt: 50,000 m/t(10,000 disch)	$31/32.00	Up $1.00	x
Argentina to Algeria: 25/30,000 m/t(3,000 disch)	$32/33.00	Up $1.00	X
Argentina to Morocco: 25,000 m/t(3,000 disch)	$29/30.00	Up $1.00	X
Argentina to Saudi Arabia	$41.00	Steady	X
Argentina to South Africa 30,000 m/t(3,000 disch)	$30/31.00	Up $1.00	X
Argentina to Spain: 30,000 m/t	$31/32.00	Up $1.00	x
Argentina to China: 50,000 m/t, with top-off	$39/40.00	Up $1.00	x
Brazil to Algeria: 25,000 m/t	$28/29.00	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	$26/27.00	Steady	x
Brazil to Europe	$22/23.00	Steady	x
Black Sea to Spain: 30,000 m/t(5,000 disch)	$17/18.00	Steady	x
Black Sea to Morocco: 30,000 m/t(3,000 disch)	$21/22.00	Steady	x
Black Sea to Tunisia/Algeria: 30,000(5,000 disch)	$19/20.00	Steady	X
Black Sea to East Med: 30,000 m/t(3,000 disch)	$14/15.00	Steady	X
Black Sea to East Med: coaster	$40/43.00	Steady	X
Black Sea to Egypt: coaster 3,000 m/t	$43/45.00	Steady	X
Black Sea to Egypt: 40/50,000 m/t – (6,000 disch)	$13/14.00	Steady	x
Black Sea to Saudi Arabia – Jeddah – 50k	$23/24.00	Steady	x
Baltic Dry Index	1155	Up 8	x
Baltic Capesize Index	2483	Down 144	X
Baltic Panamax Index	931	Up 60	X
Baltic Supramax Index	997	Up 27	X
Baltic Handisize Index	469	Up 27	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 245/254 Sep/Nov	X
Wheat, USA Hard Red Winter 12 protein	USD 283/293 Sep/Nov	x
Wheat, Ukraine 11.5 pro, 30,000+ m/t	USD 234/238 Sep/Nov	x
Wheat, Russia 12.5 pro, 30,000+ m/t	USD 245/252 Sep/Nov	x
Wheat, soft milling, France, Rouen port	USD 219/227 Sep/Nov	x
Wheat, milling, Argentina, upriver	USD 245/255 Dec/Jan 2015	x
Wheat, feed, Black Sea	USD 192/197 Sep/Nov	x
Wheat Bran, Black Sea	USD 160/170 Sep/Nov	x
Barley, France, Rouen port	USD 200/203 Sep/Nov	x
Barley, feed, Argentina, upriver	USD 220/224 Sep/Nov	x
Barley, feed, Black Sea, 30,000+	USD 213/216 Sep/Nov	x
Barley, feed, USA Pacific Northwest	USD 265/270 Sep/Nov	x
Corn, FOB NOLA USA	USD 190/193 Sep/Nov	x
Corn, FOB USA Pacific northwest	USD 201/203 Sep/Nov	x
Corn, FOB Argentina port, upriver	USD 173/178 Sep/Nov	x
Corn, FOB Brazil port	USD 168/172 Sep/Nov	x
Corn, FOB Black Sea, 30,000+ m/t	USD 175/182 Oct/Nov new crop	x
Corn, FOB France	USD 216/227 Sep/Nov	x
Corn, FOB Romania	USD 187/192 Sep/Nov	x
Sorghum, FOB Texas	USD  217/220 Sep/Nov	x
Sorghum, FOB Argentina port	USD  140/153 Sep/Nov	x
Soymeal,  48 protein, FOB NOLA	USD 530>>440  Sep>>Nov	x
Soymeal, 48 protein, USA, Rotterdam	USD 600>>515 Sep>>Nov	x
Soymeal, Argentina, Rotterdam	USD 498>>485 Sep>>Nov	x
Soymeal, 47 pro, FOB Argentina	USD 450>>400 Sep>>Nov	x
Soymeal, 48 protein, Brazil, Rotterdam	USD 493>>475 Sep>>Nov	x
Soymeal, FOB Brazil	USD 440>>390 Sep>>Nov	x
Soymeal, 48 protein, India FOB	USD 625/640	x
Soybeans, FOB NOLA	USD 438>>419 Sep>>Nov	X
Soybeans, Argentina, FOB	USD 460>>430 Sep>>Nov	X
Soybeans, Brazil, FOB	USD 485>>445 Sep>>Nov	X
Soybeans, Rotterdam	USD 470>>455 Sep>>Nov	X
Soybeans, Black Sea	USD 420/435 Sep/Nov	x
Corn Gluten Meal, USA FOB NOLA	USD   690/700 m/t Sep/Nov	x
Corn Gluten Feed, USA FOB NOLA	USD   175/180 m/t Sep/Nov	x
Corn Gluten Feed, France, at producer	USD   215/220 m/t Sep/Oct	x
DDGS corn, 35 profat, USA FOB NOLA	USD   200/205 m/t Sep/Nov	x
DDGS corn, 35 profat, USA CNF Asia	USD   256/261 m/t Sep/Nov	x
DDGS corn, France, at producer	USD   295/305 m/t Sep/Oct	X
DDGS corn, Rotterdam	USD   270/280 m/t Sep/Oct	X
DDGS wheat, France, at producer	USD   300/305 m/t Sep/Oct	x

*** see sources note

 

 

Corn prices were down a little again this week but it seems that it was not enough to have any effect of the current price for corn by-products: DDGS, corn gluten feed and corn gluten meal. As a matter of fact the US domestic DDGS prices were up slightly last week but only USD 2 or 3 m/t.

 

It was interesting to read the USGC DDGS report this week where there was a paragraph on buyer/seller relationships and dependable buyers versus buyers breaking trust. One could probably assume from the tone of the comments that there have been some defaults in the export DDGS business and the USGC is very politely mentioning the topic and pointing out how important to the buyer is their reputation for dependability.  

 

There has been no change at all in the prices for corn gluten meal and corn gluten feed this week. It looks like we are going to continue for a bit in the same trading range that we have had for past weeks.

 

US export shipments – Jan to July 2014 – in m/t – major destinations

 

	Distillers Dried Grains – DDGS	Corn Gluten Feed	Corn Gluten Meal
Canada	180,500		32,400
Chile			91,600
China	3,573,900
Columbia	93,600	8,300	42,800
Egypt	115,600	15,800	111,500
Germany		30,300
Indonesia	165,100	8,600	98,800
Ireland	135,000	244,900	15,900
Israel	114,400	167,400	14,500
Japan	313,500		41,100
Malaysia			15,100
Mexico	931,000	11,600	32,600
Morocco	61,300	20,300
South Korea	334,100	25,300	3,700
Taiwan	144,900		8,300
Thailand	141,300		15,200
Turkey	94,400	25,400	9,000
UK	70,200	23,000	5,600
Vietnam	364,300		7,900

 

 

Container shipments, minimum 200 m/t

 

Argentina Meat & Bone meal, 45 protein    Argentina poultry meal, 57/60 protein	USD 450/470 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 580/590 m/t CNF Asia  USD 640/660 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 610/630 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 470/500 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

 

 

Meat and bone meal export prices from the USA are weaker this week as lower vegetable protein prices and increasing animal protein inventories put downward pressure on prices. Domestic and export prices for MBM are both lower in the US and seem to be even lower for shipments getting into November. 

 

Australia and New Zealand prices have been steady but buying pressure will probably cause them to slide lower too as buyer don't much want to pay a price premium to anyone.

 

As has been the story for several weeks now, MBM is overpriced versus soymeal and the much lower soymeal prices in Oct/Nov/Dec are bound to pull MBM prices lower. Feathermeal and poultry meal seem to be a little stronger than MBM due to the differences in use but there are some feelings of weakness in both these items, at least in the near term.

 

 

US export shipments – Jan to July 2014 – in m/t – major destinations

 

	Meat and Bone Meal Incl pork and poultry meal	Feathermeal
Bangladesh	1,500
Canada	26,300	6,600
Chile		29,800
China	24,700
Columbia	1,200
Ecuador	4,000
Guatemala	6,600
Holland	4,500
Indonesia	42,100	65,400
Malaysia	3,500
Mexico	11,500
Philippines	4,600
Thailand	4,000

 

 

 

SECTION 2 --- FISHMEAL COMMENTS AND PRICES: PERUVIAN

 

In Peru, it has been another week of slow sales and little or no change in export fishmeal prices. The unsold stocks of fishmeal are at about the 120,000 m/t level, perhaps a tad higher. However, according to local trade reports there is some expectation that China is going to have to be back in the fishmeal market in the near future as stocks on hand and goods afloat don't look to be enough to keep China supplied for too long – they will need more fishmeal before the end of the year and as we are now in September that does not leave too much time to get it shipped and on hand in China.

 

It was interesting to note in the MSI Ceres report this week that there has been a major change in production in Peru in the last 15 years from 60 percent FAQ (standard) grade to 70 percent Prime and Super Prime. That is a major shift in production and looking at the spread between Super Prime and Standard grade is putting an extra USD 150 m/t in the hands of the fishmeal producers for a much larger share of the production. But overall what this means is that the producers are doing a much better job of producing quality fishmeal – from fishing all the way through production and packaging.

 

So, while the selling price is higher, the overall product is better. The fishmeal producers have made major investments in fishing and production facilities that have enabled the increase in high quality production. It is also true that a good chunk of the fishmeal demand is from the aquafeed industries where Prime and Super Prime are more in demand and not from the old-time FAQ users in the poultry industry where the fishmeal demand gets smaller every year.

 

To me, it looks like the change in production quality to Prime and Super Prime and the investment in facilities and systems was one of the best decisions made by the fishmeal producers.

 

There was an article in the press reports this week that says the spread between super prime and 65 protein will be expanding to about USD 200 m/t, it is currently at about USD 150/160, so if the expectation is correct some prices will have to move by USD 50 m/t or so. It could be standard moving lower or Super Prime higher but the spread looks to be widening.

 

 

European fishmeal prices – FOB North German port.

 

Type	Protein %	Price per m/t USD
Herring fishmeal	72 protein	1,940
Danish fishmeal	64 protein	1,700
Peru fishmeal	64 protein	1,760
Chile fishmeal	65 protein	1,800
Iceland fishmeal	70 protein	1,940

@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	1780/1800 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