Weekly report -- Oct 19, 2014

 

Hammersmith Trade Services

A division of Hammersmith Marketing Ltd.

 

WEEKLY FEED GRAIN AND PROTEIN REPORT   October 19, 2014

 

Representative Office: +33.9.7044.4881   Mobile: +33.6.8068.4564    Fax: +33.4.5774.7575

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A day late with the report this week as I am at the US Grains Council Export Exchange in Seattle, Washington and, contrary to all the stories about Seattle, it is not raining. I spent all day yesterday on a plane but am now all set to roll on my weekly report – stuffed with a breakfast of pancakes, bacon, maple syrup, orange juice and endless cups of coffee – there is nothing like breakfast in the US. 

 

 

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

 

  Well what do you know, another up week for everything: corn up US 5 to 7 m/t, soybeans up USD 10 to 13 m/t, soymeal up USD 15-20 m/t and wheat up by about USD 7 m/t across the range.

 

The US export report that came out on Friday, delayed a day by the earlier holiday, show very large corn exports and if you combine that with private surveys that show expected lower corn plantings in 2015 then there is sufficient reason for the market to move higher for the day/week. With the very low prices that we see these days for corn it is difficult to imagine that farmers will be interested in planting massive corn crops in 2015. No one wants to plant anything that will create losses or very low profits. The thing is that next year's planting is a long way away and we may have some lower corn prices for a few months yet.

 

However, as mentioned before, more and more experts are saying that corn has reached about as low a price level as it is going to and that, while it may not have any major move higher, it looks now to be more likely to be steady to higher in price rather than steady to lower.

 

The next big factor in corn should be want is happening in South America and how the weather may affect their corn crops.

 

Soybeans and soymeal were up a good bit this week as buyers suddenly decided to jump into the market. Much of the rally in futures prices was due to short sellers covering their positions and taking profits before prices could move any higher.

 

The Informa 2015 planting estimates that showed corn planting dropping also showed soybean plantings increasing this mainly due to a switch from corn to beans. Still all this is just a best guess projection.

 

The harvest weather in the US has improved, so farmers should be back out in the fields this week harvesting like mad which should push US harvest levels up to close to the average level in next week's report.

 

As to soybean/soymeal prices, they have had a decent run higher and could probably see a little more weakness as the harvest progresses this week. Other than the continued liquidation of short futures positions there does not look to be too many good reasons for prices to move any higher at present.

 

 

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USA crop condition report – October 12, 2014 – all in percentages

France crop condition as of October 16, 2014

 

	Very poor	Poor	Fair	Good to excellent	Harvested %
USA crop:
Corn	2	5	19	74	24
Soybeans	1	5	21	73	40
Sorghum	3	9	31	57	41
Spring Wheat					100
Winter Wheat					Planted 68%
French crop:	Very poor	Poor	Fair	Good to excellent
Corn	0	2	11	87	19
Wheat - soft					Planted 34%
Wheat – hard					Planted 55%

 

 

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

 

US Gulf to Europe: 60/70,000 (10,000 disch)	$19.00	Up $1.00	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)	$30/31.00	Up $1.00	x
US Gulf other Med: 25,000 MT(3,000 disch)	$35/36.00	Steady	x
US Gulf Israel: 50,000 MT	$31/32.00	Up $1.00	x
US Gulf Morocco: 25,000(3,000 disch)	$34/35.00	Steady	x
US Gulf Turkey: 50,000	$32/33.00	Up $1.00	x
US Gulf Nigeria: 30,000 m/t	$48/49.00	Up $1.00	x
US Gulf Yemen 35/45.000	$48/49.00	Steady	x
US Gulf South Africa: 30,000 m/t	$38/39.00	Steady	x
US Gulf Japan: Panamax(10,000 disch)	$44/45.00	Steady	x
US Gulf China: Panamax(8,000 disch)	$44/45.00	Down $1.00	x
US PNW Asia: 35/45,000 m/t	$33/34.00	Down $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	Steady	x
Argentina to Europe: 50/60,000 m/t	$22/23.00	Up $1.00	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	$33/34.00	Down $1.00	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)	$19/20.00	up $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	Steady	x
Baltic Dry Index	944	Down 19	x
Baltic Capesize Index	1362	Down 182	x
Baltic Panamax Index	966	Up 101	x
Baltic Supramax Index	923	Down 47	x
Baltic Handisize Index	501	Down  15	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 245/249 Oct/Dec	x
Wheat, USA Hard Red Winter 12 protein	USD 287/291 Oct/Dec	x
Wheat, Ukraine 11.5 pro, 30,000+ m/t	USD 225/230 Oct/Dec	x
Wheat, Russia 12.5 pro, 30,000+ m/t	USD 237/241 Oct/Dec	X
Wheat, Romania	USD 247/251 Oct/Dec	x
Wheat, soft milling #1, France, Rouen	USD 217/219 Oct/Dec	x
Wheat, soft milling #2, France, Rouen	USD 212/214 Oct/Dec	x
Wheat, milling, Argentina, upriver	USD 238/250 Dec/Jan 2015	x
Wheat, feed, Black Sea	USD 200/205 Oct/Dec	x
Wheat Bran, Black Sea	USD 170/180 Oct/Dec	x
Barley, France, Rouen port	USD 203/205 Oct/Dec	x
Barley, feed, Argentina, upriver	USD 190/205 Oct/Dec	x
Barley, feed, Black Sea, 30,000+	USD 207/210 Oct/Dec	x
Barley, feed, USA Pacific Northwest	USD 270/275 Oct/Dec	x
Corn, FOB NOLA USA	USD 186>>180 Oct>>Dec	x
Corn, FOB USA Pacific northwest	USD 199>>194 Oct>>Dec	x
Corn, FOB Argentina port, upriver	USD 170/174 Oct/Dec	x
Corn, FOB Brazil port	USD 168/172 Oct/Dec	x
Corn, FOB Black Sea, 30,000+ m/t	USD 173/176 Oct/Dec	x
Corn, FOB France	USD 183/187 Oct/Dec	x
Corn, FOB Romania	USD 177/180 Oct/Dec	x
Sorghum, FOB Texas	USD  239>>231 Oct>>Dec	x
Sorghum, FOB Argentina port	USD  146/152 Oct/Dec	x
Soymeal,  48 protein, FOB NOLA	USD 469>>460  Oct>>Dec	X
Soymeal, 48 protein, USA, Rotterdam	USD 495>>487 Oct>>Dec	X
Soymeal, Argentina, Rotterdam	USD 436/454 Oct>>Dec	x
Soymeal, 47 pro, FOB Argentina	USD 415/430 Oct/Dec	X
Soymeal, 48 protein, Brazil, Rotterdam	USD 426/448 Oct>>Dec	X
Soymeal, FOB Brazil	USD 407/425 Oct/Dec	x
Soymeal, 48 protein, India FOB	USD 610/620	x
Soybeans, FOB NOLA	USD 415/425 Oct/Dec	x
Soybeans, Argentina, FOB	USD 400>>390 Oct>>Dec	x
Soybeans, Brazil, FOB	USD 445>>435 Oct>>Dec	X
Soybeans, Rotterdam	USD 450>>438 Oct>>Dec	x
Soybeans, Black Sea	USD 375/385 Oct/Dec	x
Corn Gluten Meal, USA FOB NOLA	USD   670/680 m/t Oct/Dec	x
Corn Gluten Feed, USA FOB NOLA	USD   152/155 m/t Oct/Dec	x
DDGS corn, 35 profat, USA FOB NOLA	USD   174/178 m/t Oct/Dec	x
DDGS corn, 35 profat, USA CNF Asia	USD   210/220 m/t Oct/Dec	x

*** see sources note

 

With corn prices up a little this week, domestic US DDGS prices also moved up a tad with most areas quoting prices about USD 5 m/t higher than last week. Strangely enough the export prices were a little softer on the week with some quite good prices on offer for export buyers. Perhaps some easing of domestic transportation prices in the USA helped to lower export prices a bit.

 

However, with a small rally in corn prices there was certainly a jump in export interest for DDGS and for a smaller degree for corn gluten meal and this new interest may just push prices higher for next week – depending, of course, on what corn prices do.

 

The US Grain Council report was saying this week that DDGS inventories in the US had been quite high but that the new demand is working them down which could also lead to increased prices on lower stocks.

 

Export demand remains quite good for corn co-products from the US and with the prices at very attractive levels, as they are these days, there is little chance that exports will slip (except to China where GM problems still haunt US DDGS shipments) and prices should lag the change in corn prices by a few days.

 

 

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 520/530 m/t CNF Asia  USD 570/590 m/t CNF Asia  USD 770/790 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 510/520 m/t CNF Asia  USD 820/830 m/t CNF Asia  USD 640/670 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 420/430 m/t
Feathermeal  80 protein USA	USD 710/740 m/t
Poultry meal  57 protein, Eastern USA	USD 550/570 m/t

*** see sources note

 

It has been a little difficult to get a good idea on animal protein export prices this week as the somewhat panic situation in fishmeal has flowed over a little into animal proteins and excited the market. There are reports that prices into both China and Indonesia are a little lower this week from Australia and there also seems to be a trend to lower export prices out of the USA but the fishmeal factor is also coming into play as buyers will be trying to cover some protein needs with alternatives to high priced, limited supply fishmeal but this may take a few weeks to have a more serious effect.

 

Within the USA the animal protein prices tended to move a little lower as buyers are looking at using only the lowest priced proteins and MBM has been a tad too expensive versus soymeal. US domestic feathermeal was also lower this week as some reports had prices as much as USD 50 m/t lower.

 

Soymeal prices have not been all that weak in the last few days but more weakness is expected, on the back of a record soybean crop, so it is expected that animal protein prices will have to slide lower if soymeal does in order to protect their share of the animal feed business.

 

If domestic USA animal protein prices do continue lower that will also drag down export price levels.

 

 

SECTION 2 --- FISHMEAL COMMENTS AND PRICES: PERUVIAN

 

The future fishing situation for Peru is filled with stories, guesses and speculations but the only fact we have is that the next IMARPE sailing to examine the northern bio-mass will be in early November with the results expected as quickly as possible after that. So this would seem to mean that the earliest any fishing could start would be in late November.  The bio-mass in the south of the main fishing area has been examined are stories are that it is in very good condition with little reduction in size as seen in the north – but this too is speculation.  

 

The prices that I show below in Peru as just a great deal of guess work as there is little to sell and only panic buying in the market. One could probably say that there is really no fixed price for anything still on hand in Peru. As to prices for the next season, producers don't want to go out on a limb with pricing as they don't know what they may have available for sale while buyers hope to be able to cover a least a little of their needs before the actual fishing situation is known.

 

Some new season business is being done but it is next to impossible to know at what price level with any accuracy but one can say for certain that it will be at a high level. Buyers are more than happy to pay up for at least some stock and if prices drop they will just average down in coming months but if there is no fishing and prices race higher then they at least may have some protection – that is if producers are actually able to ship later in the year.

 

It looks like we could end up with a good stack of contract disputes if there is not some Nov/Dec fishing in Peru. Inshallah there will be fishing.

  

 

 

European fishmeal prices – FOB North German port.

 

As can be seen by the prices in Europe below, the South American prices in Europe are now at too high a level to compete with European fishmeal.

 

Type	Protein %	Price per m/t USD
Herring fishmeal	72 protein	1,920
Danish fishmeal	64 protein	1,690
Peru fishmeal	64 protein	1,930
Chile fishmeal	65 protein	1,960
Iceland fishmeal	70 protein	1,950

@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	1880/1890 m/t
65/66 protein	1900/1910 m/t
67 protein standard steam	1920/1930 m/t
67 protein SD 150  TVN	1940/1950 m/t
67 protein SD 120 TVN	1960/1970 m/t
67 protein SD 1000 hist, 120 TVN	1980/1990 m/t
68 protein SD 500 hist, 120 TVN	2000/2020 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