Weekly report -- Sep 20, 2014

 Hammersmith Trade Services

A division of Hammersmith Marketing Ltd.

 

WEEKLY FEED GRAIN AND PROTEIN REPORT   September 20, 2014

 

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

 

Every week seems to be the same – lower, lower and lower – but now more and more "experts" are saying that the drop in prices is coming to an end. Corn prices were not all that much lower last week, perhaps USD 2 or 3 m/t which is really nothing these days. Soybeans were down by about USD 10 m/t in the USA with soymeal down by about the same USD 10 m/t amount.

 

On the corn side of things, the yields that are being shown by the early harvest are much higher than most people expected and the expectation that the overall crop yields could be higher was certainly enough to get the market excited. There is nothing like the thought of an even bigger crop to get prices moving lower. It is very early days still so the high yields of today may not carry on into other harvest areas – it will take a little time to see if the super yields continue.

 

From a buyer/end-user point of view, corn prices are certainly very attractive and world feed costs are going to continue to drop lower as the glut of corn from almost every exporting nation gets into the world market. Feed producers and livestock people could be looking to having the best year that they have had in a couple of years with raw material prices dropping faster than retail price levels.

 

As seems to be the pattern, soybean/soymeal prices continue lower as all the experts feel that the very good corn yields will probably also be seen in soybeans. The USA is going to have mounds of soybeans anyway which is why prices started to drop but if the mounds are even bigger then the prices will be even lower. The 1.2 million m/t sale of soybeans to China wasn't enough to stop soybeans and soymeal from sliding this as everyone knows how much China is going to buy so that the fact that they did buy is no surprise.

 

Most of the trade reports suggest that soybean/soymeal prices will continue lower, especially once some harvest info is known (assuming good yields) and the feeling is that buyer should be only buying as they need because prices will probably be lower tomorrow.

 

For the next few weeks, prices in the USA are going to be driven by the harvest and the yields. Harvest delays will probably push prices up for a day or two but if yields continue to be very good then there is little reason for higher prices until the harvesting is completed.    

 

 

USA crop condition report – September 14, 2014 – all in percentages

France crop condition as of September 12, 2014

 

	Very poor	Poor	Fair	Good to excellent	Harvested %
USA crop:
Wheat - spring	1	7	29	63	95
Corn	2	5	19	74	4
Soybeans	1	5	22	72
Sorghum	3	9	31	57	28
French crop:	Very poor	Poor	Fair	Good to excellent
Corn	0	3	11	86	No info
Barley, spring	2	10	26	62	100

 

 

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

 

US Gulf to Europe: 60/70,000 (10,000 disch)	$17.00	Up $1.00	X
US Gulf to Spain: 30,000 m/t(5,000 disch)	$28/29.00	Up $1.00	x
US Gulf to Egypt: Panamax(6,000 disch)	$28/29.00	Up $1.00	x
US Gulf other Med: 25,000 MT(3,000 disch)	$34/35.00	Up $1.00	X
US Gulf Israel: 50,000 MT	$29/30.00	Up $1.00	x
US Gulf Morocco: 25,000(3,000 disch)	$33/34.00	Up $1.00	x
US Gulf Turkey: 50,000	$30/31.00	Up $1.00	x
US Gulf Nigeria: 30,000 m/t	$46/47.00	Up $1.00	x
US Gulf Yemen 35/45.000	$47/48.00	Up $1.00	x
US Gulf South Africa: 30,000 m/t	$39/40.00	Up $1.00	x
US Gulf Japan: Panamax(10,000 disch)	$44/45.00	Down $1.00	x
US Gulf China: Panamax(8,000 disch)	$45/46.00	down $1.00	X
US PNW Asia: 35/45,000 m/t	$32/33.00	Down $1.00	x
US PNW Japan: 50,000+ m/t(10,000 disch)	$29/30.00	Up $1.00	X
US PNW China: 50,000+ m/t(8,000 d1sch)	$28/29.00	Up $1.00	x
France/Germany to Algeria: 30,000 m/t(3,000 disch)	$22/23.00	Steady	X
France/Germany to Morocco: 30,000 m/t(3,000 disch)	$23/24.00	Steady	X
France/Germany to Jordan: 35/45,000 m/t(4,000 disch)	$28/29.00	Steady	X
France/Germany to Saudi Arabia: 50/60,000	$34/35.00	Steady	X
France/Germany to Egypt: 50,000 m/t(10,000 disch)	$23/24.00	Steady	X
France/Germany to Yemen: 30,000 m/t	$43/44.00	Steady	X
France/Germany to South Africa: 30,000 m/t	$34/35.00	Steady	X
Argentina to Europe: 50/60,000 m/t	$21/22.00	Steady	X
Argentina to Egypt: 50,000 m/t(10,000 disch)	$31/32.00	Steady	X
Argentina to Algeria: 25/30,000 m/t(3,000 disch)	$32/33.00	Steady	X
Argentina to Morocco: 25,000 m/t(3,000 disch)	$29/30.00	Steady	X
Argentina to Tunisia: 30,000 m/t	$33/34.00	Steady	X
Argentina to Saudi Arabia	$41.00	Steady	X
Argentina to South Africa 30,000 m/t(3,000 disch)	$30/31.00	Steady	X
Argentina to Spain: 30,000 m/t	$31/32.00	Steady	X
Argentina to China: 50,000 m/t, with top-off	$39/40.00	Steady	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 Saudi Arabia	$41/42.00	Steady	X
Brazil to Europe	$22/23.00	up $1.00	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	$22/23.00	Steady	x
Baltic Dry Index	1075	Down 106	X
Baltic Capesize Index	2112	Down 434	x
Baltic Panamax Index	814	Down 61	X
Baltic Supramax Index	1029	Up 23	X
Baltic Handisize Index	498	Up 21	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 235/238 Sep/Nov	x
Wheat, USA Hard Red Winter 12 protein	USD 271/275 Sep/Nov	x
Wheat, Ukraine 11.5 pro, 30,000+ m/t	USD 230/233 Sep/Nov	x
Wheat, Russia 12.5 pro, 30,000+ m/t	USD 243/247 Sep/Nov	x
Wheat, soft milling #1, France, Rouen	USD 212/215 Sep/Nov	x
Wheat, soft milling #2, France, Rouen	USD 200/205 Sep/Nov	x
Wheat, milling, Argentina, upriver	USD 245/250 Dec/Jan 2015	x
Wheat, feed, Black Sea	USD 180/188 Sep/Nov	x
Wheat Bran, Black Sea	USD 155/165 Sep/Nov	x
Barley, France, Rouen port	USD 190/192 Sep/Nov	x
Barley, feed, Argentina, upriver	USD 205/212 Sep/Nov	x
Barley, feed, Black Sea, 30,000+	USD 211/216 Sep/Nov	x
Barley, feed, USA Pacific Northwest	USD 250/255 Sep/Nov	x
Corn, FOB NOLA USA	USD 176/179 Sep/Nov	x
Corn, FOB USA Pacific northwest	USD 188/192 Sep/Nov	x
Corn, FOB Argentina port, upriver	USD 165/170 Sep/Nov	x
Corn, FOB Brazil port	USD 160/165 Sep/Nov	x
Corn, FOB Black Sea, 30,000+ m/t	USD 167/172 Oct/Nov new crop	X
Corn, FOB France	USD 177/180 Sep/Nov	x
Corn, FOB Romania	USD 172/178 Oct/Nov	x
Sorghum, FOB Texas	USD  227/230 Sep/Nov	x
Sorghum, FOB Argentina port	USD  130/140 Sep/Nov	x
Soymeal,  48 protein, FOB NOLA	USD 450>>440  Sep>>Nov	x
Soymeal, 48 protein, USA, Rotterdam	USD 490>>475 Sep>>Nov	X
Soymeal, Argentina, Rotterdam	USD 471>>455 Sep>>Nov	X
Soymeal, 47 pro, FOB Argentina	USD 370/400 Sep/Nov	X
Soymeal, 48 protein, Brazil, Rotterdam	USD 460>>450 Sep>>Nov	X
Soymeal, FOB Brazil	USD 370/420 Sep/Nov	x
Soymeal, 48 protein, India FOB	USD 610/620	X
Soybeans, FOB NOLA	USD 405/420 Sep>>Nov	x
Soybeans, Argentina, FOB	USD 428>>420 Sep>>Nov	X
Soybeans, Brazil, FOB	USD 450>>440 Sep>>Nov	X
Soybeans, Rotterdam	USD 455>>4435 Sep>>Nov	x
Soybeans, Black Sea	USD 390/400 Oct/Nov	x
Corn Gluten Meal, USA FOB NOLA	USD   695/700 m/t Sep/Nov	x
Corn Gluten Feed, USA FOB NOLA	USD   175/180 m/t Sep/Nov	x
DDGS corn, 35 profat, USA FOB NOLA	USD   188/192 m/t Sep/Nov	x
DDGS corn, 35 profat, USA CNF Asia	USD   226/231 m/t Sep/Nov	x

*** see sources note

 

This was another week for lower prices for corn by-products with DDGS showing a drop of between USD 10 and 20 m/t depending on what exporter you were talking to. The story in the US trade reports is that DDGS supplies are getting a tad too heavy with inventories building and producers much more motivated to move some stock….thus the price slides lower. Of course if China was back buying DDGS then this would probably not be the situation.

 

With both corn gluten feed and corn gluten meal nothing too much has been happening. CGF did move a little lower following along with lower corn prices but CGM is holding its price level even though soymeal was down by USD 10 to 15 m/t. With fishmeal being a little weaker and soymeal still dropping then one could hope for a little lower price for CGM but hope does not always work.

 

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 45 protein    European MBM 50 protein    European Feathermeal, 75 protein    European poultry meal	USD 360/370 m/t CNF Asia  USD 400/415 m/t CNF Asia  USD 740/750 m/t CNF Asia  USD 900/920 m/t CNF Asia
Australian MBM 45 protein    Australian MBM 50 protein    Australian Feathermeal, 80 protein    Australian Poultry Meal, pet food	USD 540/550 m/t CNF Asia  USD 590/610 m/t CNF Asia  USD 800/820 m/t CNF Asia  USD 1000/1020 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 570/590 m/t CNF Asia  USD 880/890 m/t CNF Asia  USD 750/770 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 450/460 m/t
Feathermeal  80 protein USA	USD 710/740 m/t
Poultry meal  57 protein, Eastern USA	USD 660/680 m/t

*** see sources note

 

Looking at USA animal protein prices we saw that domestic feathermeal was a little higher, up by USD 10 m/t or so, while meat and bone meal is finally starting to show some serious weakness and dropped by about USD 20 m/t in much of the USA. USA export prices showed the same pattern with MBM being about USD 20 m/t lower into Asia. The comment from most USA traders was that prices will have to continue lower to get back into the feed formulations in the US.

 

On the international side, everyone seemed to be lower this week as the vegetable protein prices are putting pressure on animal proteins. In Asia the price for European MBM just seems to get lower and lower (for those markets that can use it) which is keeping South American product out of the market. No one wants to pay a USD 50 to 80 m/t premium to source from Paraguay or Argentina.

 

Both Australia and New Zealand had lower export price levels this week with the market expecting that prices will continue to slide, even with supplies getting a little tighter.

 

So, for now it looks like lower prices are still in the cards.  

 

 

 

SECTION 2 --- FISHMEAL COMMENTS AND PRICES: PERUVIAN

 

This has been another week of very little new business in Peru, certainly nothing to get excited about. Buyers from China are looking around but only seem to be half interested and are floating price ideas well below the current market levels. Of course, they are only floating as no one much seems to be in the buying mood.

 

According to the MSI Ceres report this week, the available fishmeal stocks in Peru are getting close to 100,000 m/t and with at least 12weeks to go before we will see any new fishmeal there is the chance that a little buying excitement could push the market into a "net short position" much like last year.

 

For the past 5 or 6 months China has been taking about 25,000 m/t of Peruvian fishmeal per month. So, if business to China continues at about the same level then China can easily use all the remaining fishmeal supply. It sounds bullish but there is no guarantee of what China may do or of what they may have booked in Peru at present.

 

As mentioned last week, Peru's exports of fishmeal are at just over 700,000 m/t for the first 8 months of the year, that is about 87,000 m/t per month on average, so how long will today's 100,000 m/t of fishmeal last.

 

If I was a small user of fishmeal, I would probably be making sure that I had covered my needs for the next two or three months – especially if what is needed is higher grade fishmeal.

 

No change in price indications from Peru this week.

 

 

European fishmeal prices – FOB North German port.

 

Type	Protein %	Price per m/t USD
Herring fishmeal	72 protein	1,890
Danish fishmeal	64 protein	1,695
Peru fishmeal	64 protein	1,700
Chile fishmeal	65 protein	1,740
Iceland fishmeal	70 protein	1,885

@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	1700/1720 m/t
65/66 protein	1710/1730 m/t
67 protein standard steam	1720/1740 m/t
67 protein SD 150  TVN	1740/1760 m/t
67 protein SD 120 TVN	1760/1780 m/t
67 protein SD 1000 hist, 120 TVN	1780/1800 m/t
68 protein SD 500 hist, 120 TVN	1810/1830 m/t
Fish oil, crude bulk	1850/1950
Fish oil, crude drums	2050/2150
Fish oil, flexi tank	2000/2100
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