Weekly report July 11, 2105

Hammersmith Trade Services

A division of Hammersmith Marketing Ltd.

 

WEEKLY FEED GRAIN AND PROTEIN REPORT   July 11, 2015

 

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Back from a great holiday in California and ready to get to work. We had a great time…Highway 1 in California is fantastic, as were all the stops along the way.

 

SECTION 1:  US FEED GRAINS and VEGETABLE AND ANIMAL PROTEIN

 

Overall, this week is probably the quietest week of the last three weeks when I was away on holidays so today I get to bring everyone up to date on a quieter week.

 

Corn and soymeal were higher on the week while soybeans slipped a little and wheat gave back some of its recent large increases. Corn prices were only up by USD 3 or so in both the cash and futures while soymeal managed to increase about USD 5 m/t for new crop meal. New crop soybeans dropped by about USD 3 m/t while almost all varieties on US wheat were down by close to USD 6 m/t.

 

A number of corn experts were saying that the WASDE report has now established a floor for corn prices due to the lower ending stocks number and that corn prices will probably move higher from here. All experts are also pointing out that with the lower expected ending stocks any small decrease in the 2015 corn crop yield would have a major effect on stocks and push prices much higher.

 

Catching up by reading all the reports today it looks like most experts are expecting the next few weeks to have a great deal of corn price volatility but with the general trend probably to higher prices.

 

The WASDE report effect on soybeans was not quite as great, as the expected very bullish report did not happen but on the futures side prices did rally higher quickly then fell back to a more reasonable level. The USDA did lower the ending stocks for 2014/15 year and this will become the opening stocks for 2015/16, so lower stocks are always at least a little bullish.

 

There seems to be the feeling in the market that China is about to get their 2015/16 soybean buying program chugging along a little quicker than in recent weeks and any increase in Chinese buying could certainly help to push soybean prices higher.

 

 

USDA – USA Crop Progress Report – July 07, 2015

 

Crop condition		Excellent %	Good %	Fair %	Poor %	Very Poor %
Winter wheat	7		33	37	16	7
Spring wheat	13		57	24	5	1
Barley	16		57	21	5	1
Corn	13		61	22	3	1
Sorghum	11		56	27	3	3
Soybeans	11		52	28	7	2

@USDA

 

France AgriMer – crop condition report – July 06, 2015

 

Winter crops		Very Good %	Good %	Average %	Bad %	Very Bad %
Soft wheat	19		56	19	6	1
Hard wheat	18		59	18	4	1
Barley	30		56	11	2
Barley spring	9		57	25	8	2
Corn	11		60	21	7	2

@France AgriMer

  

 

 

I didn't put in any price change amounts on the freight as the last report was three weeks ago and the change is probably of little value but weekly changes will be back next week.

 

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

 

US Gulf to Europe: 60/70,000 (10,000 disch)	$15/15.50		x
US Gulf to Spain: 30,000 m/t(5,000 disch)	$24/25.00		x
US Gulf Israel: 50,000 MT	$25/26.00		x
US Gulf to Egypt: Panamax(6,000 disch)	$24/25.00		x
US Gulf Turkey: 50,000	$26/27.00		x
US Gulf Morocco: 25,000(3,000 disch)	$31/32.00		x
US Gulf Nigeria: 30,000 m/t	$50/51.00		x
US Gulf other Med: 25,000 MT(3,000 disch)	$32/33.00		x
US Gulf Japan: Panamax	$35/36.00		x
US Gulf China: Panamax	$34/35.00		x
US PNW Japan: Panamax	$21/22.00		x
US PNW China: Panamax	$20/21.00		x
US East Coast Egypt: Panamax	$41/42.00		x
US East Coast Nigeria: Handisize	$52/53.00		x
France/Germany to Algeria: 30,000 m/t(3,000 disch)	$25/26.00		x
France/Germany to Egypt: 50,000 m/t(10,000 disch)	$24/25.00		x
France/Germany to Jordan: 35/45,000 m/t(4,000 disch)	$26/27.00		x
France/Germany to Morocco: 30,000 m/t(3,000 disch)	$24/25.00		x
France/Germany to Saudi Arabia: 50/60,000	$40/41.00		x
France/Germany to South Africa: 30,000 m/t	$37/38.00		x
France/Germany to Yemen: 30,000 m/t	$52/53.00		x
Argentina to Algeria: 25/30,000 m/t(3,000 disch)	$31/32.00		x
Argentina to China: 50,000 m/t, with top-off	$33/34.00		x
Argentina to Japan: 50,000 m/t	$34/35.00		x
Argentina to Egypt: 50,000 m/t(10,000 disch)	$24/25.00		x
Argentina to Europe: 50/60,000 m/t	$22/23.00		x
Argentina to Morocco: 25,000 m/t(3,000 disch)	$30/31.00		x
Argentina to Saudi Arabia	$38/39.00		x
Argentina to South Africa 30,000 m/t(3,000 disch)	$29/30.00		x
Argentina to Spain: 30,000 m/t	$27/28.00		x
Argentina to Tunisia: 30,000 m/t	$31/32.00		x
Brazil to Algeria: 25,000 m/t	$24/25.00		x
Brazil to China: 55,000 m/t	$26/27.00		x
Brazil to Japan: 55,000 m/t	$27/28.00		x
Brazil to Europe	$22/23.00		x
Brazil to Morocco: 30,000 m/t	$23/24.00		x
Brazil to Saudi Arabia	$32/33.00		x
Brazil to Turkey/Egypt: 50,000 m/t	$20/21.00		x
Australia to China: 40-50,000 m/t	$9.00/9.50		x
Australia to Japan: 40-50,000 m/t	$9.50/10.00		x
Australia to Saudi Arabia: 40-50,000 m/t	$13/14.00		x
Ukraine to China	$31/32.00		x
Black Sea to East Med: 30,000 m/t(3,000 disch)	$16/17.00		x
Ukraine to East Med: coaster	$38/39.00		x
Black Sea to Egypt: 40/50,000 m/t – (6,000 disch)	$12/13.00		x
Ukraine to Egypt: coaster 3,000 m/t	$38/39.00		x
Black Sea to Iraq: 50,000 m/t	$38/39.00		x
Black Sea to Morocco: 30,000 m/t(3,000 disch)	$29/30.00		x
Black Sea to Spain: 40/50,000 m/t	$16/17.00		x
Black Sea to Saudi Arabia – Jeddah – 50k	$20/21.00		x
Black Sea to Tunisia/Algeria: 30,000(5,000 disch)	$27/28.00		x
Baltic Dry Index	874
Baltic Capesize Index	1318
Baltic Panamax Index	1052
Baltic Supramax Index	767
Baltic Handisize Index	384
Bunkerworld fuel index	798

 

 

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 July 2015/August 2015 UNLESS STATED OTHER WISE

 

Wheat, USA Soft Red Winter, NOLA	USD 239/243	x
Wheat, USA Hard Red Winter 12 protein	USD 254/257	x
Wheat, Ukraine 11.5 pro, 30,000+ m/t	USD 192/195	x
Wheat, Russia 12.5 pro, 30,000+ m/t	USD 200/206	x
Wheat, Romania 12.5 pro	USD 209/216	x
Wheat, soft milling #1, France, Rouen	USD 214/216	x
Wheat, soft milling #2, France, Rouen	USD 212/214	x
Wheat, milling, Argentina, upriver	USD 230/235	x
Wheat, feed, Black Sea	USD 186/192	x
Wheat Bran, Black Sea	USD no prices	x
Barley, France, Rouen port	USD 205/208	x
Barley, feed, Argentina, upriver	USD 170/177	x
Barley, feed, Black Sea, 30,000+	USD 184/187	x
Barley, feed, USA Pacific Northwest	USD 230/235	x
Corn, FOB NOLA USA	USD 196/199	x
Corn, FOB USA Pacific northwest	USD 206/209	x
Corn, FOB Argentina port, upriver	USD 163/169	x
Corn, FOB Brazil port	USD 166/171	x
Corn, FOB Black Sea, 30,000+ m/t	USD 190/195	x
Corn, FOB France	USD 200/210	x
Corn, FOB Romania	USD 175/180	x
Sorghum, FOB Texas	USD 273>>265	x
Sorghum, FOB Argentina port	USD 171/175	x
Soymeal,  48 protein, FOB NOLA	USD no prices	X
Soymeal, 48 protein, USA, Rotterdam	USD no prices	x
Soymeal, Argentina, Rotterdam	USD 417/425	x
Soymeal, 47 pro, FOB Argentina	USD 383/388	x
Soymeal, 48 protein, Brazil, Rotterdam	USD 406/412	x
Soymeal, FOB Brazil	USD 355/362	x
Soymeal, 48 protein, India FAQ	USD 580/590	x
Soybeans, FOB NOLA	USD 440/445	x
Soybeans, Argentina, FOB	USD 380/389	x
Soybeans, Brazil, FOB	USD 375/387	x
Soybeans, Rotterdam	USD 396/400
Soybeans, Black Sea	USD 390/405	x
Corn Gluten Meal, USA FOB NOLA	USD   685/690 m/t	x
Corn Gluten Feed, USA FOB NOLA	USD   150/155 m/t	x
DDGS corn, 35 profat, USA FOB NOLA	USD   216/219 m/t	x
DDGS corn, 35 profat, USA CNF Asia	USD   271/274 m/t	x

 

There wasn't much change in prices for corn by-products this week. Although there is the report of some export corn gluten meal business being done at a price about USD 15 m/t below offers last week but that is probably because last week's offers were too high. There hasn't been much change in DDGS prices this week but buyers are worried about domestic USA prices and how they will affect export prices once several grains are fighting for export space and domestic railcars.

 

Most buyers of corn by-products are looking at positions on September and later as most of the July/Aug/Sep shipping positions are full and exporters are having to fight for containers and vessel room.

 

It will be interesting to see what happens to corn by-product prices after the 2015 corn harvest but looking at the current price levels out to the end of the year there is certainly no sign of a drop in prices from current levels. We will just have to wait and see what corn does.

 

Rabobank issued an interesting report this week on the "Global Quest for Protein" which is looking for a continued increase in protein demand and in protein prices. Rabobank sees the future to be one of improved crop yield technology and better feed formulations and feed conversions but with demand keeping and supply keeping level as both move higher.

 

 

Container shipments, minimum 200 m/t

 

Argentina Meat & Bone meal, 45 protein    Argentina poultry meal, 57/60 protein	USD 450/460 m/t CNF Asia  USD 560/570 m/t CNF Asia
Paraguay Meat &Bone meal, 45 protein	USD 430/440 m/t CNF Asia
Australian MBM 45 protein    Australian MBM 50 protein    Australian Feathermeal, 80 protein    Australian Poultry Meal, pet food	USD 440/460 m/t CNF Asia  USD 480/500 m/t CNF Asia  USD 500/530 m/t CNF Asia  USD 670/690 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 495/520 m/t CNF Asia  USD 550/560 m/t CNF Asia  USD 600/630 m/t CNF Asia  USD 720/730 m/t CNF Asia

 

With Ramadan and the holidays following still having some time to go, the meat and bone meal business to Indonesia (the major MBM importer) has been quite slow but there are some reports of new demand at a little higher prices than the recent lows. Australian producers are said to be looking for higher prices and some say that supplier offers are up by USD 30 to 50 m/t for 50 pro MBM.

 

In the US market, it looks like the threat of avian flu may be controlled and poultry meal and feathermeal prices both reacted by moving a little higher. They are both expected to move higher in coming weeks as their prices had been pushed quite low during the avian flu outbreak.

 

Also, with soymeal moving higher over the past couple of weeks this is allowing MBM and other animal proteins to move higher and still be price competitive.  

 

In the short term, it is expected that prices will continue higher.

 

 

 

SECTION 2 --- FISHMEAL COMMENTS AND PRICES: PERUVIAN

 

The fishing in the North of Peru is getting very close to finishing the full quota before the time expires. According to the latest numbers we are now at about 2.5 million m/t caught of the 2.58 million m/t quota…so, not far to go now. I don't think that there will be any complaints if the balance of the quota is not caught, as everyone seems quite happy with the business at present.

 

Even in the south of Peru, the fishing is coming along with 250,000 m/t of the 375,000 m/t quota now landed.

 

Traders in Peru estimate that the current stocks of unsold fishmeal may be at about 300,000 m/t which sounds like a lot but will quickly be sold if major buyers enter the market.

 

As can be seen by the prices below, the fishmeal price continues to slide a little lower every week but this may not last as we now have some serious China interest in the market. China has been very late in buying due to poor weather in China that has affected their shrimp farming and as a result dropped the fishmeal consumption…but things seem to be picking up a little.

 

According to the trade, most purchases by China so far have been for high quality fishmeal with little interest in the lower grades. Perhaps the expected demand from China for fishmeal for pig farms will use up some lower grade product.

 

There has still been very little or no business reported to major users in Europe – well there was a small 300 m/t shipment to Spain. As can be seen by the chart below, South American fishmeal is still too high priced for European use.

 

It is interesting to note that the news in California seemed to mention the El Nino effect every day, this is something that we never see on the news here in France. It does look like a serious El Nino event could hit the Pacific Coast of North and South America and may have an effect on the next Peru/Chile fishing season.

 

European fishmeal prices – FOB North German port.

 

Type	Protein %	Price per m/t USD
Herring fishmeal	72 protein	1,535
Danish fishmeal	64 protein	1,455
Peru fishmeal	64 protein	1,520
Chile fishmeal	67 protein	1,620
Iceland fishmeal	70 protein	1,490

 

 

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	Price per m/t Chile port
65 protein	1340/1360 m/t
65/66 protein	1370/1390 m/t
67 protein standard steam	1400/1420 m/t
67 protein SD 150  TVN	1500/1520 m/t	1530/1550
67 protein SD 120 TVN	1530/1550 m/t	1580/1600
67 protein SD 1000 hist, 120 TVN	1600/1620 m/t	1600/1630
68 protein SD 500 hist, 120 TVN	1620/1640 m/t	1630/1650
Fish oil, crude bulk	1900/1950	1700/1800
Fish oil, crude drums	2000/2050
Fish oil, flexi tank	2050/2100
Fish oil, Omega 3: 28%EPA/DHA	2400/2450

 

 

INFORMATION:  gtee = guarantee, TVN = total volatile nitrogen, hist = histamine,

FAQ = fair average quality (normally flame or hot air dried), SD = steam dried

           

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 © 2015 Wayne S. Bacon