Weekly report -- Nov 08, 2014

 

Hammersmith Trade Services

A division of Hammersmith Marketing Ltd.

 

WEEKLY FEED GRAIN AND PROTEIN REPORT   November 08, 2014

 

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Next week is Global Grain in Geneva and I will be there on behalf of the US Grains Council. I look forward to seeing a great many old friends wandering around the conference – please say hello if you spot me in the crowd.

 

 

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

 

So, here we are just a couple of day before the USDA WASDE report on Monday and the grain world is all excited once again. However, from the comments in the trade and the analysis reports at the end of the week there does not seem to be too much reason for excitement. Most experts feel that the US corn yield will be increased very slightly and the same with soybeans.

 

The US futures markets were lower for corn on Friday and a little higher for beans and soymeal so the market seems to be pointing the pricing lower for corn but higher for beans. The main reason for higher soybean prices is the level of export sales so far this year with sales running much further ahead of what is considered normal levels with 77% of the projected exports having been sold or shipped compared to the more normal level of around 65%.

 

The USA harvest is progressing very well with few delays but with cold and snow in the cards for Northern USA then the end of the harvest in North Dakota and Iowa could be delayed.

 

Again with soybeans, farmers seem to be holding stocks as much as they can which has resulted in export prices moving up quicker than the futures market would suggest. Prices for soybeans on the Mississippi river system are up by about USD 6 or 7 m/t which is certainly contrary to the drop in futures on the week of about USD 4 m/t -- this means that export prices are increasing at a faster level than futures prices, at least for now.

 

So, Monday will be the day and any WASDE surprises will set the price trends for the next while.  

 

 

 

USA crop condition report – November 04, 2014 – all in percentages

France crop condition as of October 30, 2014 – the latest report is not available due to technical problems in France

 

	Very poor	Poor	Fair	Good to excellent	Harvested %
USA crop:
Corn					71
Soybeans					85
Sorghum					74
Spring Wheat					100
Winter Wheat	2	5	34	59	Planted 90%
French crop:	Very poor	Poor	Fair	Good to excellent
Corn	0	1	9	89	57
Wheat - soft					Planted 77%
Wheat – hard					Planted 18%
Barley - winter					Planted 93%

 

 

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

 

 

US Gulf to Europe: 60/70,000 (10,000 disch)	$20.00		X
US Gulf to Spain: 30,000 m/t(5,000 disch)	$29/30.00		X
US Gulf to Egypt: Panamax(6,000 disch)	$30/31.00	Down $1.00	X
US Gulf other Med: 25,000 MT(3,000 disch)	$35/36.00		X
US Gulf Israel: 50,000 MT	$31/32.00	Down $1.00	X
US Gulf Morocco: 25,000(3,000 disch)	$35/36.00		X
US Gulf Turkey: 50,000	$32/33.00	Down $1.00	X
US Gulf Nigeria: 30,000 m/t	$49/50.00		X
US Gulf Yemen 35/45.000	$48/49.00		X
US Gulf South Africa: 30,000 m/t	$38/39.00		X
US Gulf Japan: Panamax(10,000 disch)	$45/46.00	Down $1.00	X
US Gulf China: Panamax(8,000 disch)	$44/45.00	Down $1.00	X
US PNW Asia: 35/45,000 m/t	$35/36.00		X
US PNW Japan: 50,000+ m/t(10,000 disch)	$30/31.00		X
US PNW China: 50,000+ m/t(8,000 d1sch)	$29/30.00		X
US East Coast Egypt: Panamax	$36/37.00	Up $1.00	X
US East Coast Nigeria: Handisize	$48/49.00	Down $1.00	x
France/Germany to Algeria: 30,000 m/t(3,000 disch)	$24/25.00		X
France/Germany to Morocco: 30,000 m/t(3,000 disch)	$25/26.00		X
France/Germany to Jordan: 35/45,000 m/t(4,000 disch)	$30/31.00		X
France/Germany to Saudi Arabia: 50/60,000	$36/37.00		X
France/Germany to Egypt: 50,000 m/t(10,000 disch)	$25/26.00		X
France/Germany to Yemen: 30,000 m/t	$45/46.00		X
France/Germany to South Africa: 30,000 m/t	$35/36.00		x
Argentina to Europe: 50/60,000 m/t	$28/29.00	Up $2.00	x
Argentina to Egypt: 50,000 m/t(10,000 disch)	$31/32.00		x
Argentina to Algeria: 25/30,000 m/t(3,000 disch)	$32/33.00		x
Argentina to Morocco: 25,000 m/t(3,000 disch)	$30/31.00		x
Argentina to Tunisia: 30,000 m/t	$33/34.00		x
Argentina to Saudi Arabia	$41.00		x
Argentina to South Africa 30,000 m/t(3,000 disch)	$30/31.00		x
Argentina to Spain: 30,000 m/t	$31/32.00		x
Argentina to China: 50,000 m/t, with top-off	$39/40.00		x
Brazil to Algeria: 25,000 m/t	$28/29.00		X
Brazil to China: 55,000 m/t	$33/34.00		X
Brazil to Turkey/Egypt: 50,000 m/t	$24/25.00		X
Brazil to Morocco: 30,000 m/t	$26/27.00		X
Brazil to Saudi Arabia	$41/42.00		X
Brazil to Europe	$22/23.00		X
Black Sea to Spain: 30,000 m/t(5,000 disch)	$19/20.00		x
Black Sea to Morocco: 30,000 m/t(3,000 disch)	$21/22.00		x
Black Sea to Tunisia/Algeria: 30,000(5,000 disch)	$20/21.00	Up $1.00	x
Black Sea to East Med: 30,000 m/t(3,000 disch)	$15/16.00		x
Black Sea to East Med: coaster	$44/46.00	Up $1.00	x
Black Sea to Egypt: coaster 3,000 m/t	$45/47.00	Up $1.00	x
Black Sea to Egypt: 40/50,000 m/t – (6,000 disch)	$13/14.00		x
Black Sea to Saudi Arabia – Jeddah – 50k	$24/25.00		x
Black Sea to China	$35/37.00	New	x
Baltic Dry Index	1437	Up 9	x
Baltic Capesize Index	3661	Up 109	x
Baltic Panamax Index	1183	Down 50	x
Baltic Supramax Index	881	Down 11	x
Baltic Handisize Index	454	Down 13	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.)

 

ALL PRICES ARE FOR NOV 2014/JAN 2015 UNLESS STATED OTHER WISE

 

Wheat, USA Soft Red Winter, NOLA	USD 252>>248	X
Wheat, USA Hard Red Winter 12 protein	USD 275>>272	x
Wheat, Ukraine 11.5 pro, 30,000+ m/t	USD 233/240	X
Wheat, Russia 12.5 pro, 30,000+ m/t	USD 249/257	X
Wheat, Romania	USD 250/255	x
Wheat, soft milling #1, France, Rouen	USD 219/221	x
Wheat, soft milling #2, France, Rouen	USD 213/216	x
Wheat, milling, Argentina, upriver	USD 245/255	x
Wheat, feed, Black Sea	USD 205/210	x
Wheat Bran, Black Sea	USD 190/200	X
Barley, France, Rouen port	USD 196/200	x
Barley, feed, Argentina, upriver	USD 195/205	x
Barley, feed, Black Sea, 30,000+	USD 208/213	x
Barley, feed, USA Pacific Northwest	USD 240/245	x
Corn, FOB NOLA USA	USD 193>>189	x
Corn, FOB USA Pacific northwest	USD 207>>204	x
Corn, FOB Argentina port, upriver	USD 179/184	x
Corn, FOB Brazil port	USD 179/184	x
Corn, FOB Black Sea, 30,000+ m/t	USD 176/182	X
Corn, FOB France	USD 181/192	x
Corn, FOB Romania	USD 180/184	x
Sorghum, FOB Texas	USD  243>>239	x
Sorghum, FOB Argentina port	USD  155/160	x
Soymeal,  48 protein, FOB NOLA	USD 518>>502	x
Soymeal, 48 protein, USA, Rotterdam	USD  no prices	x
Soymeal, Argentina, Rotterdam	USD 506/513	x
Soymeal, 47 pro, FOB Argentina	USD 465/474	x
Soymeal, 48 protein, Brazil, Rotterdam	USD 494/599	x
Soymeal, FOB Brazil	USD 460/466	x
Soymeal, 48 protein, India FOB	USD 630/640	x
Soybeans, FOB NOLA	USD 439/443	x
Soybeans, Argentina, FOB	USD 406>>393	x
Soybeans, Brazil, FOB	USD 460>>450	x
Soybeans, Rotterdam	USD 470>>445	x
Soybeans, Black Sea	USD 395/410	x
Corn Gluten Meal, USA FOB NOLA	USD   700/710 m/t	x
Corn Gluten Feed, USA FOB NOLA	USD   150/155 m/t	x
DDGS corn, 35 profat, USA FOB NOLA	USD   181/185 m/t	x
DDGS corn, 35 profat, USA CNF Asia	USD   222/228 m/t	x

*** see sources note

 

 

I am not too sure on the price shown this week for corn gluten feed. In a week where corn was only down by about USD 4 m/t the drop in CGF prices seems too high – also, some sources do show CGF prices at levels about USD 15 m/t higher.

 

DDGS prices seemed to be very hard to tie down this week with some sellers moving prices higher by as much as USD 10 m/t while others were steady in their prices. One suspects that the very wide range in prices late in the week is due mainly to the USDA WASDE report coming out on Monday and sellers really don't want to do much new business in advance of the report – perhaps they are hoping for a bullish report and higher prices.

 

On the shipping side of things, most container companies have announced container freight increases and buyers could be looking at CNF prices moving up by about USD 10 m/t in coming weeks as the new container rates come into place.

 

Not surprisingly, corn gluten meal prices were higher this week as the rollover effect from fishmeal hits the protein market. CGM works quite well in some aqua diets versus fishmeal and with fishmeal now at sky-high levels end-users are trying to maximize their use of all other proteins. CGM prices should stay quite firm as long as fishmeal prices remain high.

 

 

USA exports – January to September 2014 – in m/t - major destinations

 

	Corn Gluten Feed	Corn Gluten Meal	DDGS – Distillers Dried Grains
Canada		45,900	261,200
Chile		119,400
China			4,218,400
Columbia	22,000	53,200	122,400
Costa Rica			54,600
Egypt	15,800	128,100	137,900
El Salvador			44,600
Germany	30,300
Guatemala			42,200
Indonesia		124,100	236,300
Ireland	309,100	15,900	190,600
Israel	176,700	14,500	121,600
Japan		69,300	385,300
Malaysia		23,300
Mexico	13,700	42,300	1,141,500
Morocco	28,500		71,800
New Zealand			44,500
Philippines			80,600
Portugal	16,800
South Korea	25,300		486,900
Spain	18,100		61,700
Taiwan			183,700
Thailand		24,700	235,900
Turkey	114,000	9,000	257,800
UK	23,000		113,800
Vietnam			487,900

USDA GATS November 2014

 

Container shipments, minimum 200 m/t

 

Argentina Meat & Bone meal, 45 protein    Argentina poultry meal, 57/60 protein	USD 460/480 m/t CNF Asia  USD 630/640 m/t CNF Asia
Paraguay Meat &Bone meal, 45 protein	USD 420/430 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 510/520 m/t CNF Asia  USD 560/580 m/t CNF Asia  USD 740/760 m/t CNF Asia  USD 950/970 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 530/540 m/t CNF Asia  USD 800/820 m/t CNF Asia  USD 630/650 m/t CNF Asia  USD 1000/1030 m/t CNF Asia

*** see sources notex

 

 

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 670/690 m/t
Poultry meal  57 protein, Eastern USA	USD 500/520 m/t

*** see sources note

 

Trade reports from Asia say the meat and bone meal prices are up by about USD 20 m/t but that with current market situation there could be room for prices to go another USD 30 to 40 m/t higher. However, buyers say that they are not paying these prices yet and that there is still product available at lower levels – it depends on the shipper's stock position. The much higher price for fishmeal continues to push protein prices higher as buyers look at all other high protein alternatives. With just standard grade fishmeal up at USD 2,000 m/t it is easy to see why Asian buyers will be willing to pay a few dollars more for animal proteins. Pet food grade poultry meal was up very strongly in Asia as it sells directly against fishmeal.

 

Domestic prices in the USA have not changed much as whenever prices look to be moving higher some additional supply seems to come to market. However, many US experts are saying that animal protein prices will have to move higher in coming weeks and this will push up export prices.

 

As you can see from the table below, if you exclude Canada and Mexico, USA MBM exports are all going 90% to Asia but with feathermeal Chile is a major importer, coming in second behind Indonesia.

 

USA exports – January to September 2014 – in m/t - major destinations

 

	Meat and Bone Meal: Includes poultry and pork meal	Feathermeal
Canada	35,200	11,600
Chile		40,700
China	29,600
Ecuador		5,500
Guatemala	7,200
Holland		5,100
Indonesia	54,000	83,700
Malaysia		4,000
Mexico	14,300
Philippines	6,200
Thailand		4,600

USDA GATS November 2014

 

 

SECTION 2 --- FISHMEAL COMMENTS AND PRICES: PERUVIAN

 

There is nothing new to report, as yet, on the fishing situation for the next season in Peru. Results of analysis of the biomass will be seen later in November or perhaps early December. Most people in the fishing industry in Peru are anticipating a very small quote for the Dec/Jan period – but they all seem to expect at least some quota.

 

Based on trade comments read after the finish of the Vancouver IFFO meetings last week, the prices shown below could be well below where the Peruvian market is trading today. Prices for all grades are said to be close to what is shown below but with the 68 pro Super Prime perhaps as high as USD 2500 m/t.

 

Of course the problem is that when there is little left to sell and no definite new supply on the horizon, anything that is left in stock in Peru will go at a serious premium. However, fishmeal buyers are now looking at all alternatives for fishmeal supply as Peru has little or nothing and no one know when there will be more.

 

While it is true that the last of the available supply is going at very high prices, the future does not look too good for fishmeal producers in Peru – if they have no stock and no fishing quota then they are stuck with large fixed operating costs that cannot be offset against fishmeal sales. So, while current prices may be high, fishmeal producers and fishing fleets are facing lean times in the next few months.  

 

Reports from Peru show that current fishmeal stocks are between 30,000 and 35,000 m/t, mainly of lower grade fishmeal.

 

I have taken a few facts from the MSI-Ceres presentation at the IFFO in Vancouver to show below – if anyone wants the full presentation they could ask MSI-Ceres at: msiceres@msiceres.com

 

Six Peruvian producers do about 85% of all fishmeal business, they are: Diamante, Exalmar, Tasa, Austral, Copeinca/CFG and Hayduk – this is up from 63% in 2007 and is certainly trending higher.

 

Asia and Europe represent 88% of all Peru fishmeal exports:  Asia 70.7%, Europe 18.0% plus Americas 9.5% and Australia 1.8%.

 

Looking at shipments, almost 100% of shipments to China are in containers, up from around 60% in 2006. For all fishmeal export shipments, about 15% are done in bulk vessels, mainly to Europe, with 85% overall in containers. Back in 2005 it was much closer to 50/50.

 

 

European fishmeal prices – FOB North German port.

 

 

Type	Protein %	Price per m/t USD
Herring fishmeal	72 protein	2,030
Danish fishmeal	64 protein	1,795
Peru fishmeal	64 protein	2,115
Chile fishmeal	65 protein	2,165
Iceland fishmeal	70 protein	2,075

@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	2060/2070 m/t
65/66 protein	2070/2080 m/t
67 protein standard steam	2080/2090 m/t
67 protein SD 150  TVN	2200/2210 m/t
67 protein SD 120 TVN	2300/2310 m/t
67 protein SD 1000 hist, 120 TVN	2370/2380 m/t
68 protein SD 500 hist, 120 TVN	2400/2420 m/t
Fish oil, crude bulk	2300/2350
Fish oil, crude drums	2500/2550
Fish oil, flexi tank	2450/2500
Fish oil, Omega 3: 28%EPA/DHA	3000/3100

*** 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