Weekly Report - Oct 11, 2014

 

Hammersmith Trade Services

A division of Hammersmith Marketing Ltd.

 

WEEKLY FEED GRAIN AND PROTEIN REPORT   October 11, 2014

 

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

 

Almost everything finished the week up a little. Actually all prices were up by about the same amount with corn, soybean, soft red wheat and hard red wheat all being up by about USD 4 m/t on the week.

 

The USDA WASDE report didn't have any major effect on prices as the expected yield increases were not as high as all experts felt while the US crop production was just about what had been expected and only the ending stocks for wheat were a slight surprise (being lower than trade estimates). All in all the WASDE was much of a non-event.

 

The end result of the WASDE report may be that it has stopped the market decline in corn and we may now be at the low of the period. A number of experts are now saying that any further drop in corn prices will be a definite buying opportunity – so the market situation seems to have changed from one of waiting for lower corn prices to one of buying if you get a down day.

 

However, there is a strong feeling in soybeans and perhaps in wheat that prices could have some room to move lower. Any slight bullishness that may have been seen after the WASDE soon turned to bearishness as everyone recognized that the harvest is huge and that for soybeans we will be up to our armpits in supply.

 

There was a long article in the press at the end of the week, by a noted corn expert, that farmers will be turning away from corn in 2015 due to the market price being significantly below their cost of production and the chance that farmers will hold onto their supply as long as possible in the hopes of a rally that will allow them to recover their costs. Both are very possible and both are likely for some but 2015 is a ways away so prices don't seem to have much reason to rally in the near term – looks like an up/down price range for the next few weeks until we get some market moving news.

 

  

 

USA crop condition report – October 05, 2014 – all in percentages

France crop condition as of October 06, 2014

 

	Very poor	Poor	Fair	Good to excellent	Harvested %
USA crop:
Corn	2	5	19	74	17
Soybeans	1	5	21	73	20
Sorghum	3	9	31	57	37
Spring Wheat					96
Winter Wheat					Planted 56%
French crop:	Very poor	Poor	Fair	Good to excellent
Corn	0	2	10	88	9

 

 

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	$38/39.00	Down $2.00	x
US Gulf Japan: Panamax(10,000 disch)	$44/45.00	Down $2.00	x
US Gulf China: Panamax(8,000 disch)	$45/46.00	Steady	x
US PNW Asia: 35/45,000 m/t	$34/35.00	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	Steady	X
France/Germany to Morocco: 30,000 m/t(3,000 disch)	$25/26.00	Steady	x
France/Germany to Jordan: 35/45,000 m/t(4,000 disch)	$30/31.00	Steady	X
France/Germany to Saudi Arabia: 50/60,000	$36/37.00	Steady	X
France/Germany to Egypt: 50,000 m/t(10,000 disch)	$25/26.00	Steady	x
France/Germany to Yemen: 30,000 m/t	$45/46.00	Steady	x
France/Germany to South Africa: 30,000 m/t	$35/36.00	Down $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	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	Steady	X
Black Sea to Spain: 30,000 m/t(5,000 disch)	$18/20.00	Down $1.00	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	$24/25.00	Down $2.00	x
Baltic Dry Index	963	Down 74	x
Baltic Capesize Index	1544	Down 214	x
Baltic Panamax Index	865	Down 22	X
Baltic Supramax Index	970	Down 58	X
Baltic Handisize Index	516	Down  14	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 240/243 Oct/Dec	x
Wheat, USA Hard Red Winter 12 protein	USD 282/288 Oct/Dec	x
Wheat, Ukraine 11.5 pro, 30,000+ m/t	USD 225/228 Oct/Dec	x
Wheat, Russia 12.5 pro, 30,000+ m/t	USD 236/240 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 235/245 Dec/Jan 2015	x
Wheat, feed, Black Sea	USD 190/193 Oct/Dec	x
Wheat Bran, Black Sea	USD 160/170 Oct/Dec	x
Barley, France, Rouen port	USD 198/202 Oct/Dec	x
Barley, feed, Argentina, upriver	USD 200/210 Oct/Dec	x
Barley, feed, Black Sea, 30,000+	USD 205/210 Oct/Dec	x
Barley, feed, USA Pacific Northwest	USD 250/255 Oct/Dec	x
Corn, FOB NOLA USA	USD 177>>174 Oct>>Dec	x
Corn, FOB USA Pacific northwest	USD 208>>204 Oct>>Dec	x
Corn, FOB Argentina port, upriver	USD 168/172 Oct/Dec	x
Corn, FOB Brazil port	USD 160/164 Oct/Dec	x
Corn, FOB Black Sea, 30,000+ m/t	USD 162/170 Oct/Dec	x
Corn, FOB France	USD 178/182 Oct/Dec	x
Corn, FOB Romania	USD 172/175 Oct/Dec	x
Sorghum, FOB Texas	USD  233>>225 Oct>>Dec	x
Sorghum, FOB Argentina port	USD  142/147 Oct/Dec	x
Soymeal,  48 protein, FOB NOLA	USD 475>>450  Oct>>Dec	x
Soymeal, 48 protein, USA, Rotterdam	USD 501>>477 Oct>>Dec	X
Soymeal, Argentina, Rotterdam	USD 443>>439 Oct>>Dec	x
Soymeal, 47 pro, FOB Argentina	USD 409/410 Oct/Dec	x
Soymeal, 48 protein, Brazil, Rotterdam	USD 433>>424 Oct>>Dec	x
Soymeal, FOB Brazil	USD 408/422 Oct/Dec	x
Soymeal, 48 protein, India FOB	USD 610/620	x
Soybeans, FOB NOLA	USD 406/415 Oct/Dec	x
Soybeans, Argentina, FOB	USD 401>>390 Oct>>Dec	X
Soybeans, Brazil, FOB	USD 425>>415 Oct>>Dec	X
Soybeans, Rotterdam	USD 440>>428 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   153/160 m/t Oct/Dec	x
DDGS corn, 35 profat, USA FOB NOLA	USD   170/175 m/t Oct/Dec	x
DDGS corn, 35 profat, USA CNF Asia	USD   205/210 m/t Oct/Dec	x

*** see sources note

 

 

Corn by-product prices slipped a little lower this week as the USDA WASDE report did not have much of an effect on the corn market. Depending who you talked to the export prices were either up a little or down a little as it will take a few days for prices to adjust to the new WASDE information. However, so far, it doesn't look like there will be any drastic market reaction.

 

Other than corn gluten meal, which could run up on strong fishmeal prices, there looks like little reason to expect higher prices in the near term for corn gluten feed or DDGS. On the other hand it also looks like there is not too much room for prices to drop a lot lower. Prices are currently down near the bottom for the year so may just stop here.

 

The problem in the works in the US is the very large harvest and the strain that that will put on internal transportation – we may find that while prices are soft it could be more expensive to get the product to the export port which could result in higher FOB prices even with low commodity prices. It is the old squeeze on transportation that happens every harvest in the US but even worse this year due to the size of the harvest.

 

 

Container shipments, minimum 200 m/t

 

Argentina Meat & Bone meal, 45 protein    Argentina poultry meal, 57/60 protein	USD 440/460 m/t CNF Asia  USD 630/640 m/t CNF Asia
Paraguay Meat &Bone meal, 45 protein	USD 400/410 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 520/530 m/t CNF Asia  USD 820/830 m/t CNF Asia  USD 650/700 m/t CNF Asia  USD 950/980 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

 

It is interesting to see that, with fishmeal prices looking to rush higher, animal protein export prices to Asia have taken a sudden dip. The dip is not all that surprising as animal protein prices have been too high versus vegetable protein and an equalizing drop was expected – just not all in one week.

 

Published prices out of Australia and New Zealand do not as yet reflect the drop but the market says that buyers are at least USD 40 to 50 m/t lower in their bids for MBM and even lower for higher prices feathermeal. Poultry meal prices are at two levels with feed grade poultry meal dropping lower while very good demand is keeping pet food grade poultry meal prices firm.

 

The internal markets in Australia and the USA do not seem to be as weak as the export markets but everyone expects that the weakness will spread as domestic prices versus veg protein are just too high.

 

So, for now it looks like lower prices for feed grade MBM, poultry meal and feathermeal but how much lower is anyone's guess.

 

 

SECTION 2 --- FISHMEAL COMMENTS AND PRICES: PERUVIAN

 

The big news in the fishmeal business in Peru is the very low level of the biomass as reported by the latest IMARPE information. Looking at their recent numbers there seems to be a serious shortage of fish and one can only hope that their numbers are wrong or that the biomass increases before the next survey.

 

Buyers are now in a quandary as to what to do but it does seem that some are rushing to market to buy up most of what little is left in Peru, in anticipation of a very small fishing quota. However with very little left it won't take much to clear out the supplies.

 

There were some stories in the press in Asia advising that buyers need to cover needs for fishmeal now as there may be no Nov/Dec fishing season. These comments are a tad premature but one never knows what could happen with the next biomass survey and where the quota mat be set.

 

One thing for sure, with the biomass news, prices have been all over the place with the higher grades quoted by some at about USD 100 m/t above the levels shown below. As can be seen by the prices in Europe this week, some are up and some are down depending on exactly the markets the buyers are rushing in to.

 

The latest inventory numbers out of Peru show stock levels at about 90,000 m/t which is certainly not all that much supply – especially if buyer in Asia start to panic about a possible low quota in Nov/Dec.

 

It looks like the next weeks will be quite exciting in the fishmeal business as we all worry about fishing and buyer run all over the world trying to lock down some fishmeal supplies for later in 2014 and early 2015.

 

I think that we all should be expecting higher prices until the situation becomes clearer. At least one expert in Peru is saying that prices look to go about USD 200 m/t higher.

 

 

European fishmeal prices – FOB North German port.

 

Type	Protein %	Price per m/t USD
Herring fishmeal	72 protein	1,780
Danish fishmeal	64 protein	1,670
Peru fishmeal	64 protein	1,755
Chile fishmeal	65 protein	1,805
Iceland fishmeal	70 protein	1,850

@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 -- 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