Weekly Report -- Oct 04, 2014

Hammersmith Trade Services

A division of Hammersmith Marketing Ltd.

 

WEEKLY FEED GRAIN AND PROTEIN REPORT   October 04, 2014

 

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

 

It was an interesting week in grains and oilseeds this week – at least it looked interesting from a distance. For the first time in weeks the futures markets closed the week without falling totally out of bed. Corn, soybeans and soymeal were all almost unchanged on the week while only wheat was able to finish higher as the week closed.

 

The USDA Grain Stocks Report came out this week and had the effect of pushing prices for corn a little lower as stocks are higher than had been expected. Corn consumption numbers were good but the higher stocks level still had the effect of weakening the market. There have been many articles in trade papers about when famers should sell their crops and the general tone is that they should sell today as tomorrow will probably be lower. Everyone, at least the experts, seem to feel that we will have a gigantic corn crop and lower corn prices well into 2015. Ah but, when to sell your corn is still a big gamble for farmers – although most are probably fully hedged going out many months, so they have their selling prices locked in.

 

Soybeans had a bad day on Friday that wiped out the rise in prices earlier in the week and left us all with prices about unchanged from the week before. The futures prices are down to the level where experts were saying a few weeks ago was the absolute bottom for prices – today the bottom would seem to be even lower.

 

The Informa crop forecast report that came out this week pegged both soybeans and corn at very high levels but this was echoed by other private forecasters. It certainly look like we will be having record or near record crops with yields that few expected we could reach. Record crops and record yields certainly don't look like factors that will move the market higher in the near term.

 

What we need to see is the actual harvest numbers --- although the early harvest numbers look awfully darn good. I just don't see any significantly higher prices in the short term and other than harvest weather delays there looks like little to change the fundamentals for now.   

 

 

USA crop condition report – September 29, 2014 – all in percentages

France crop condition as of September 29, 2014

 

	Very poor	Poor	Fair	Good to excellent	Harvested %
USA crop:
Corn	2	5	19	74	12
Soybeans	1	5	22	72	10
Sorghum	3	9	31	57	32
Spring Wheat					94
Winter Wheat					Planted 43%
French crop:	Very poor	Poor	Fair	Good to excellent
Corn	0	2	11	87	3

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

 

US Gulf to Europe: 60/70,000 (10,000 disch)	$18.00	Steady	X
US Gulf to Spain: 30,000 m/t(5,000 disch)	$29/30.00	Steady	X
US Gulf to Egypt: Panamax(6,000 disch)	$29/30.00	Steady	X
US Gulf other Med: 25,000 MT(3,000 disch)	$35/36.00	Steady	X
US Gulf Israel: 50,000 MT	$30/31.00	Steady	X
US Gulf Morocco: 25,000(3,000 disch)	$34/35.00	Steady	X
US Gulf Turkey: 50,000	$31/32.00	Steady	X
US Gulf Nigeria: 30,000 m/t	$47/48.00	Steady	x
US Gulf Yemen 35/45.000	$48/49.00	Steady	x
US Gulf South Africa: 30,000 m/t	$40/41.00	Steady	x
US Gulf Japan: Panamax(10,000 disch)	$46/47.00	Up $2.00	x
US Gulf China: Panamax(8,000 disch)	$45/46.00	Steady	x
US PNW Asia: 35/45,000 m/t	$33/34.00	Up $1.00	x
US PNW Japan: 50,000+ m/t(10,000 disch)	$29/30.00	Steady	X
US PNW China: 50,000+ m/t(8,000 d1sch)	$28/29.00	Steady	x
France/Germany to Algeria: 30,000 m/t(3,000 disch)	$24/25.00	Up $1.00	x
France/Germany to Morocco: 30,000 m/t(3,000 disch)	$25/26.00	Up $1.00	x
France/Germany to Jordan: 35/45,000 m/t(4,000 disch)	$30/31.00	Up $1.00	x
France/Germany to Saudi Arabia: 50/60,000	$36/37.00	Up $1.00	x
France/Germany to Egypt: 50,000 m/t(10,000 disch)	$25/26.00	Up $1.00	x
France/Germany to Yemen: 30,000 m/t	$45/46.00	Up $1.00	x
France/Germany to South Africa: 30,000 m/t	$36/37.00	Up $1.00	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	$34/35.00	Up $2.00	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	Steady	X
Black Sea to Spain: 30,000 m/t(5,000 disch)	$19/21.00	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)	$15/16.00	Steady	x
Black Sea to East Med: coaster	$42/44.00	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	$26/27.00	Up $3.00	x
Baltic Dry Index	1037	Down 12	x
Baltic Capesize Index	1758	Down 94	x
Baltic Panamax Index	887	Up 80	x
Baltic Supramax Index	1028	Down 25	x
Baltic Handisize Index	530	Up 4	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 236/241 Oct/Dec	x
Wheat, USA Hard Red Winter 12 protein	USD 279/284 Oct/Dec	x
Wheat, Ukraine 11.5 pro, 30,000+ m/t	USD 222/226 Oct/Dec	X
Wheat, Russia 12.5 pro, 30,000+ m/t	USD 235/238 Oct/Dec	x
Wheat, Romania	USD 243/247 Oct/Dec	x
Wheat, soft milling #1, France, Rouen	USD 211/213 Oct/Dec	x
Wheat, soft milling #2, France, Rouen	USD 203/207 Oct/Dec	x
Wheat, milling, Argentina, upriver	USD 232/242 Dec/Jan 2015	x
Wheat, feed, Black Sea	USD 187/192 Oct/Dec	x
Wheat Bran, Black Sea	USD 160/170 Oct/Dec	x
Barley, France, Rouen port	USD 194/202 Oct/Dec	x
Barley, feed, Argentina, upriver	USD 195/210 Oct/Dec	x
Barley, feed, Black Sea, 30,000+	USD 203/209 Oct/Dec	x
Barley, feed, USA Pacific Northwest	USD 250/255 Oct/Dec	x
Corn, FOB NOLA USA	USD 177>>172 Oct>>Dec	x
Corn, FOB USA Pacific northwest	USD 192>>185 Oct>>Dec	x
Corn, FOB Argentina port, upriver	USD 155/162 Oct/Dec	x
Corn, FOB Brazil port	USD 153/160 Oct/Dec	x
Corn, FOB Black Sea, 30,000+ m/t	USD 162/166 Oct/Dec	x
Corn, FOB France	USD 178/182 Oct/Dec	x
Corn, FOB Romania	USD 168/172 Oct/Dec	x
Sorghum, FOB Texas	USD  229>>225 Oct>>Dec	x
Sorghum, FOB Argentina port	USD  135/145 Oct/Dec	x
Soymeal,  48 protein, FOB NOLA	USD 460>>450  Oct>>Dec	x
Soymeal, 48 protein, USA, Rotterdam	USD 470>>460 Oct>>Dec	x
Soymeal, Argentina, Rotterdam	USD 440/447 Oct/Dec	x
Soymeal, 47 pro, FOB Argentina	USD 385/415 Oct/Dec	x
Soymeal, 48 protein, Brazil, Rotterdam	USD 430/450 Oct/Dec	x
Soymeal, FOB Brazil	USD 390/435 Oct/Dec	x
Soymeal, 48 protein, India FOB	USD 600/610	x
Soybeans, FOB NOLA	USD 400/410 Oct/Dec	x
Soybeans, Argentina, FOB	USD 420>>410 Oct>>Dec	x
Soybeans, Brazil, FOB	USD 405>>395 Oct>>Dec	x
Soybeans, Rotterdam	USD 440>>418 Oct>>Dec	x
Soybeans, Black Sea	USD 375/385 Oct/Dec	x
Corn Gluten Meal, USA FOB NOLA	USD   680/690 m/t Oct/Dec	x
Corn Gluten Feed, USA FOB NOLA	USD   175/180 m/t Oct/Dec	x
DDGS corn, 35 profat, USA FOB NOLA	USD   173/175 m/t Oct/Dec	x
DDGS corn, 35 profat, USA CNF Asia	USD   223/225 m/t Oct/Dec	x

*** see sources note

 

 

Corn by-products were all a little lower this week even though corn prices were not. It seems to just be a case of catching up with where prices should be after the long drop in corn prices. The comment in the DDGS market is that export buyers are still bidding well below the market and don't seem too interested in buying unless they can get lower price levels. Every buyer sees the weakness in longer term corn prices and wants to see the same in DDGS, CGF and CGM.

 

The recent strength in the US dollar is also causing export buyers to try for lower prices so that their CNF prices in local currency are not moving higher. There is also the bump in prices for container shipments from the US which again is making buyers bid lower on FOB to try and control any increase in CNF prices.

 

According to the US Grains Council DDGS report this week the US domestic prices were down by as much as USD 20 m/t in some areas – this will quickly translate into lower export prices and may get buyers back into the purchasing mood.

 

So, as to prices, there doesn't seem to be any reason to be looking for higher prices but we will still see up/down price levels every week depending on market sentiment.

 

 

USA Corn by-product exports – January/August 2014

– in m/t - major destinations.

 

	Corn Gluten Feed	Corn Gluten Meal	Distillers Dried Grains -- DDGS
Canada		38,400	212,900
Chile		119,300
China			4,051,100
Colombia	15,100	44,100	100,800
Egypt	15,800	120,300	123,300
Germany	30,300
Indonesia		115,200	199,200
Ireland	270,400	15,900	141,700
Israel	176,700	14,500	121,600
Japan		60,700	341,800
Malaysia		19,500	30,500
Mexico	12,600	37,500	1,032,400
Morocco	28,500		71,800
Philippines			70,500
South Korea	25,300		392,500
Taiwan			162,500
Thailand		18,700	191,000
Turkey	62,600	9,000	171,500
UK	23,000		88,200
Vietnam			426,000

 

 

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 870/880 m/t CNF Asia  USD 750/770 m/t CNF Asia  USD 930/980 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 430/440 m/t
Feathermeal  80 protein USA	USD 710/740 m/t
Poultry meal  57 protein, Eastern USA	USD 650/670 m/t

*** see sources note

 

According to all the trade reports this week, the animal protein prices did little or nothing this week even though buyers were all hoping for lower prices. Demand in Asia is said to good for Australian and New Zealand product but buyers are bidding below the market and exporters to seem to see much reason for accepting lower bids.

 

Market prices in the US were also steady this week but poultry meal moved a tad higher, especially per food grade poultry meal.

 

In South America, export prices were off a little, perhaps USD 10 m/t but business was very limited.

 

It is expected that animal protein prices will have to move lower as vegetable protein alternatives are much lower priced and the spread of animal protein over vegetable protein is much higher than what is considered a normal level. It is not too likely that vegetable protein prices will be moving higher so animal protein should slip lower.

 

 

USA Animal by-product exports – January/August 2014

– in m/t - major destinations.

 

	Meat and Bone meal	Feathermeal
Canada	30,100	10,000
Chile		35,900
China	28,200
Colombia	1,500
Ecuador	5,300
Guatemala	6,600
Holland	4,800
Indonesia	46,800	75,600
Malaysia	4,000
Mexico	12,700
Philippines	4,900
Thailand	4,500

 

 

SECTION 2 --- FISHMEAL COMMENTS AND PRICES: PERUVIAN

 

Aha, a week of slipping prices as everything seems have dropped by about USD 20 m/t – just shows you what low demand and reasonable supply can do to prices. However, it is interesting to see the variation in comments from the trade reports out of Peru with some saying prices are firmer on new China demand while others are saying that slow demand is pushing prices lower. I guess that with only a change of USD 20 m/t (just over 1%) it could just be trading in the recent price range. China is now on holidays until the 7^th or 8^th so not much more will happen from that direction.

 

Expectations out of the fishmeal conference in China last week are that the next Peru fishing quota will be only 1 to 1.5 million m/t which is lower than most of Peru has been expecting. At this quota level prices should be steady to higher over the next few months but, as usual, these numbers are only guesses by someone in the trade and mean little in reality.

 

According to comments in the MSI Ceres report from Peru this week, the strength of the US dollar in recent weeks is pushing up local currency prices for most importers which could limit demand a tad. They also mention that the new Minister of Fisheries in Peru has promised tighter control and supervision of the fishing industry in Peru and as we have seen in recent months much more direction toward fish for food rather than fish for feed. Too early to know what effect, if any, there may be on the fishmeal industry.

 

So what about prices – inventories are still low but then so is demand. We have been working in a +/- USD 20 to 30 range but the most likely picture would seem to be steady to higher as supply is not going to increase in the short term but demand certainly could. So, if fishmeal users need any more supply in 2014 they should probably be locking it up now as lower prices are just not too likely but supply shortages for particular grades could be.  

 

 

European fishmeal prices – FOB North German port.

 

Type	Protein %	Price per m/t USD
Herring fishmeal	72 protein	1,860
Danish fishmeal	64 protein	1,660
Peru fishmeal	64 protein	1,700
Chile fishmeal	65 protein	1,725
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	1680/1690 m/t
65/66 protein	1700/1710 m/t
67 protein standard steam	1720/1730 m/t
67 protein SD 150  TVN	1740/1750 m/t
67 protein SD 120 TVN	1760/1770 m/t
67 protein SD 1000 hist, 120 TVN	1780/1790 m/t
68 protein SD 500 hist, 120 TVN	1800/1820 m/t
Fish oil, crude bulk	1850/1900
Fish oil, crude drums	2050/2100
Fish oil, flexi tank	2000/2050
Fish oil, Omega 3: 28%EPA/DHA	2500/2600

*** 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 -- etc.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