Weekly report -- Nov 15, 2015

 

HAMMERSMITH Marketing Ltd
-------------------------
Corporate Head Office: Suite 200B, Centre of Commerce, One Bay Street,

PO Box N-3944, Nassau, Bahamas. Tel 1.242.322.6154

Email:   tradegroup@hammersmith.biz    WWW:  hammersmithltd.blogspot.com    SKYPE: bacon39a  

 

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

1 Traverse Du Cheval Blanc, St Remy de Provence, 13210 France

 

 

I attended Global Grain in Geneva this week and, as usual, it was a great place to be to say hello to all the people you have not seen in a long time or to meet all those people that you only know from emails and phone calls. There are always lots of huddles of people whispering together, so business must get done – but for me it is just a lot of saying hello.

 

SECTION 1:  US FEED GRAINS and VEGETABLE AND ANIMAL PROTEIN

 

Well, another week of lower, lower and lower – at least in the futures market – as everything was weaker. On the cash side the export basis was quite firm so we did not see export prices drop to the same level as was seen on the future. In future: corn was down by USD 6 m/t, soybeans down by about USD 4.50 m/t, soymeal down by about USD 5 to 7 m/t, soft red winter wheat down by USD 10 m/t and hard red winter wheat also down by about USD 10 m/t.

 

With corn, the slide lower seemed to be as a result of reported higher corn crop yields and weak export sales numbers. A number of corn experts are saying that they don't feel that corn has much chance of moving lower and that we could very well be at or near the lows and that this may just be a buying opportunity – perhaps they are correct as there seems to be a good level of buying interest as soon as corn prices slip a little. It does look like there are quite few buyers out there just waiting to catch the low of the market.

 

Of course, with corn, we still have the situation that the farmer is selling as little corn as possible and wants to hold his stock until the prices rally. Farmers may have wait quite a while to see a decent rally in corn prices.

 

Looking at world corn, both Argentina and Brazil have had their corn production estimates increased, so we may all be swimming in corn come next year. Things are not so good in South Africa where their corn crop estimates have been reduced once again but there is certainly enough world corn available to cover shortages in South Africa.

 

Soybeans too had another down week – export sales were very good but the USDA crop forecast had production higher and ending stocks also higher. Brazil and Argentina are having good rains so there should not be any problem with low soil moisture for the 2016 soybean crop. Also, it looks like we are going to see record soybean production in Brazil this year.

 

There does not seem to be any good reason to expect much in the way of a price rally for corn or soybeans and for the next few months all attention is going to be on South America and how their crops progress. So far South America looks great.

 

 

USDA – USA Crop Progress Report – November 10, 2015

 

Crop condition		Excellent %	Good %	Fair %	Poor %	Very Poor %
Winter wheat	10		41	38	9	2
Harvested:	2015 %		2014 %	5 year avge %
Corn	93		78	88
Soybeans	95		89	93
Sorghum	85		74	82
Planted
Winter wheat	92		93	94

@USDA

 

 

France AgriMer – crop condition report – November 10, 2015

 

Winter crops	Very Good %	Good %	Average %	Bad %	Very Bad %
Barley	34	63	3
Wheat	34	62	4
Planted	2015	2014
Winter wheat	95%	92%
Durum	85%	77%
Winter barley	99%	98%

@France AgriMer

  

 

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

 

There was an ocean freight presentation at Global Grain in Geneva this week that suggested freight costs will be low for the next two years or so. Perhaps not quite as low as the record low levels seen today but probably not much higher. No one expects a rally in oil prices so fuel costs should remain low and with all the new vessels coming on stream – 9% increase in fleet size – along with a slowdown in China's imports there is little or no expectation of higher ocean freight.  

 

US Gulf to Europe: 60/70,000 (10,000 disch)	$14/14.50	Steady	X
US Gulf to Spain: 30,000 m/t(5,000 disch)	$22/23.00	Steady	X
US Gulf Israel: 50,000 MT	$22/23.00	Down $1.00	X
US Gulf to Egypt: Panamax(6,000 disch)	$21/22.00	Down $1.00	X
US Gulf Turkey: 50,000	$23/24.00	Down $1.00	X
US Gulf Morocco: 25,000(3,000 disch)	$30/31.00	Steady	X
US Gulf Nigeria: 30,000 m/t	$47/48.00	Down $1.00	X
US Gulf other Med: 25,000 MT(3,000 disch)	$31/32.00	Steady	X
US Gulf South Africa	$32/33.00	Down $1.00	x
US Gulf Japan: Panamax	$30/31.00	Down $1.00	X
US Gulf China: Panamax	$29/30.00	Down $1.00	X
US PNW Japan: Panamax	$17/18.00	Down $1.00	X
US PNW China: Panamax	$16/17.00	Down $1.00	X
US East Coast Egypt: Panamax	$41/42.00	Steady	X
US East Coast Nigeria: Handisize	$49/50.00	Down $1.00	x
France/Germany to Algeria: 30,000 m/t(3,000 disch)	$23/24.00	Down $2.00	X
France/Germany to Egypt: 50,000 m/t(10,000 disch)	$21/22.00	Steady	X
France/Germany to Jordan: 35/45,000 m/t(4,000 disch)	$25/26.00	Down $1.00	X
France/Germany to Morocco: 30,000 m/t(3,000 disch)	$22/23.00	Down $1.00	X
France/Germany to Saudi Arabia: 50/60,000	$37/38.00	Down $1.00	X
France/Germany to South Africa: 30,000 m/t	$33/34.00	Down $1.00	X
France/Germany to Yemen: 30,000 m/t	$48/49.00	Down $1.00	x
Argentina to Algeria: 25/30,000 m/t(3,000 disch)	$22/23.00	Down $1.00	X
Argentina to China: 50,000 m/t, with top-off	$28/29.00	Down $1.00	X
Argentina to Japan: 50,000 m/t	$30/31.00	Down $1.00	X
Argentina to Egypt	$20/21.00	Down $2.00	X
Argentina to Europe: 50/60,000 m/t	$20/21.00	Down $1.00	X
Argentina to Morocco: 25,000 m/t(3,000 disch)	$22/23.00	Down $2.00	X
Argentina to Saudi Arabia	$33/34.00	Down $1.00	X
Argentina to South Africa 30,000 m/t(3,000 disch)	$26/27.00	Down $1.00	X
Argentina to Spain: 30,000 m/t	$21/22.00	Down $1.00	X
Argentina to Tunisia: 30,000 m/t	$22/23.00	Down $2.00	X
Brazil to Algeria: 25,000 m/t	$22/23.00	Down $1.00	X
Brazil to China: 55,000 m/t	$21/22.00	Down $1.00	X
Brazil to Japan: 55,000 m/t	$22/23.00	Down $1.00	X
Brazil to Europe	$23/24.00	Steady	X
Brazil to Morocco: 30,000 m/t	$21/22.00	Down $1.00	X
Brazil to Saudi Arabia	$30/31.00	Down $2.00	X
Brazil to Turkey/Egypt: 50,000 m/t	$18/19.00	Down $1.00	X
Australia to China: 40-55,000 m/t	$7.00/7.50	Down $0.50	X
Australia to Japan: 40-55,000 m/t	$7.50/8.00	Steady	X
Australia to Saudi Arabia: 40-55,000 m/t	$11/12.00	Steady	X
Ukraine to China	$24/25.00	Steady	X
Black Sea to East Med: 30,000 m/t(3,000 disch)	$22/23.00	Steady	X
Ukraine to East Med: coaster	$40/42.00	Steady	X
Black Sea to Egypt: 40/50,000 m/t – (6,000 disch)	$11/12.00	Steady	X
Ukraine to Egypt: coaster 3,000 m/t	$40/42.00	Steady	X
Black Sea to Iraq: 50,000 m/t (4,000 disch)	$31/33.00	Steady	X
Black Sea to Morocco: 30,000 m/t(3,000 disch)	$25/26.00	Down $1.00	X
Black Sea to Spain: 40/50,000 m/t (8,000 disch)	$11/12.00	Down $2.00	X
Black Sea to Jordan: 50,000 m/t (4,000 disch)	$18/20.00	Steady	X
Black Sea to Saudi Arabia – Jeddah – 50k	$21/22.00	Steady	X
Black Sea to South Africa – 30,000 m//t	$26/27.00	Down $1.00	X
Black Sea to Tunisia/Algeria: 30,000(5,000 disch)	$23/24.00	Down $1.00	X
Baltic Dry Index	560	Down 71	x
Baltic Capesize Index	809	Down 194	x
Baltic Panamax Index	514	Down 89	x
Baltic Supramax Index	523	Down 48	x
Baltic Handisize Index	304	Down 19	x
Bunkerworld fuel index	584	Down 30	x

 

 

 

 

 

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 November 2015/January 2016

 

Wheat, USA Soft Red Winter, NOLA	USD 210/213	x
Wheat, USA Hard Red Winter 12 protein	USD 210/214	x
Wheat, Ukraine 11.5 pro, 30,000+ m/t	USD 193/199	x
Wheat, Russia 12.5 pro, 30,000+ m/t	USD 196/203	x
Wheat, Romania 12.5 pro	USD 198/202	x
Wheat, Superior, France, Rouen	USD 189/192	x
Wheat, Medium, France, Rouen	USD 186/189	x
Wheat, milling, 12.0%, Argentina, upriver	USD 200/205	x
Wheat, feed, Black Sea	USD 187/191	x
Barley, France, Rouen port	USD 177/180	x
Barley, feed, Argentina, upriver	USD 181/184	x
Barley, feed, Black Sea, 30,000+	USD 186/190	x
Barley, feed, USA Pacific Northwest	USD 220/225	x
Corn, FOB NOLA USA	USD 171/173	x
Corn, FOB USA Pacific northwest	USD 178/181	x
Corn, FOB Argentina port, upriver	USD 166/170	x
Corn, FOB Brazil port	USD 164/168	x
Corn, FOB Black Sea, 30,000+ m/t	USD 169/173	x
Corn, FOB France	USD 177/180	x
Corn, FOB Romania	USD 174/179	x
Corn #2, CNF Asia	USD 214/220	x
Sorghum, FOB Texas	USD 180/183	x
Sorghum, FOB Argentina port	USD 140/145	x
Soymeal,  48 protein, FOB NOLA	USD 340/343	X
Soymeal, 48 protein, USA, Rotterdam	USD 370/373	X
Soymeal, CNF Asia	USD 400/408	x
Soymeal, Argentina, Rotterdam	USD 354/360	X
Soymeal, 47 pro, FOB Argentina	USD 338/341	X
Soymeal, 48 protein, Brazil, Rotterdam	USD 350/356	X
Soymeal, FOB Brazil	USD 319/326	X
Soymeal, 48 protein, India FAQ	USD 550/560	X
Soybeans, FOB NOLA	USD 370/375	x
Soybeans #2, CNF Asia	USD 376/382	x
Soybeans, Argentina, FOB	USD 355/361	x
Soybeans, Brazil, FOB	USD 352/357	x
Soybeans, Black Sea	USD 360/370	X
Corn Gluten Meal, USA FOB NOLA	USD   595/605 m/t	x
Corn Gluten Meal, CNF Asia, containers	USD   640/650 m/t	x
Corn Gluten Meal, CNF Egypt, containers	USD   680/690 m/t	x
Corn Gluten Feed, USA FOB NOLA	USD   161/165 m/t	X
DDGS corn, 35 profat, USA FOB NOLA	USD   183/187 m/t	x
DDGS corn, 35 profat, USA CNF Asia, cont	USD   219/230 m/t	x

 

The corn by-product market is suffering from lower corn prices and lower soymeal prices and together all corn by-products are trending lower. While to domestic USA market is still quite active, the export markets have certainly slowed down as buyers expect the all prices will be slipping lower in coming weeks. Most of the business seen in the export market has been for prompt shipment to buyers who have been holding off buying – just waiting for lower prices.

 

It also seems that the US export prices are actually a little stronger than the domestic prices – DDGS in the US was down by about USD 10 m/t but this was not repeated in the export market and, for corn gluten meal, the domestic US price is off as much as USD 15 m/t but his has not been seen in the export market where prices have been steady. One difference in export market is that loading positions for containers are quite full into late December so buyers are having to pay up to get into the export lineup.  

 

With the USA corn harvest nearly completed we now move into the period where corn prices should increase every month due to storage and finance charges on the corn stocks – this will also push by-product prices a little higher each month. Corn gluten meal prices are being quoted at USD 10 m/t higher each month further out from November and DDGS are higher from December through February.

 

All that being said – the corn by-products are still very attractively priced versus other protein or fiber based alternatives.

 

 

Container shipments, minimum 200 m/t

 

Argentina Meat & Bone meal, 45/50 protein    Argentina poultry meal, 57/60 protein    Argentina feathermeal, 78/80 protein	USD 410/420 m/t CNF Asia  USD 500/510 m/t CNF Asia  USD 490/500 m/t CNF Asia
Paraguay Meat &Bone meal, 45 protein	USD 410/420 m/t CNF Asia
Australian MBM 45 protein    Australian MBM 50 protein    Australian Feathermeal, 80 protein    Australian Poultry Meal, pet food	USD 440/450 m/t CNF Asia  USD 470/490 m/t CNF Asia  USD 550/570 m/t CNF Asia  USD 750/770 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 450/470 m/t CNF Asia  USD 520/540 m/t CNF Asia  USD 600/620 m/t CNF Asia  USD 700/720 m/t CNF Asia

 

Trade reports this week are saying that Asian animal protein prices have moved a little higher this week as buyers seem to be a bit more willing to meet seller's offers. Even with soymeal slipping lower on the week, the short term trend for meat and bone meal seems to be to a little higher level. Most market experts seem to feel that there is really no strength in the MBM market and that any rally this week is not going to last. There is just too much pressure from lower soymeal and corn gluten meal prices to allow MBM to move higher.

 

In the US domestic market, most prices are slipping lower as all vegetable protein items are dropping in price. According to one trade report, USA MBM is at its lowest price level since 2007. There just seems to be a great deal of animal protein available in the US at exactly the same time as there is also scads of low priced vegetable protein.

 

Market experts are saying that these seems to be no reason for animal protein prices to move higher in the short term – except perhaps pet food grade poultry meal.

 

 

 

 

SECTION 2 --- FISHMEAL COMMENTS AND PRICES: PERUVIAN

 

It is interesting to see that, just prior to the new Peru fishing quota announcement, trade reports were full of comments and speculation and opinions and wild guesses but this week – with the quota being known – there is almost nothing in the way of information from the fishmeal trade. Trade reports that were several pages long are now down to one page. No one has anything to say in advance of the fishing starting next week.

 

On the buying side of things, buyers seem to be waiting to see how the fishing goes and producers/exporters are doing the same thing. If anything, prices are a little higher this week – at least they are in Europe.

 

China, the main fishmeal buyer, is said to have good sized stocks on hand and are in no rush to buy new stock as the busy season for fishmeal demand is over in China and other Asian destinations.

 

I imagine that there will be some decent buying interest once the fishing season gets rolling and the daily catch number start appearing. If catch levels are good and fish size is within reason, then we should start to see some buyer's bids below the current market. However, if the catch is weak or the number of juvenile fish is high, then buyers may get a little more interested in booking some Peruvian fishmeal in anticipation of possible higher prices.

 

It will be interesting to see how the fishing goes after the November 17 start.

 

 

European fishmeal prices – FOB North German port.

 

Type	Protein %	Price per m/t USD
Herring fishmeal	72 protein	1,770
Danish fishmeal	64 protein	1,535
Peru fishmeal	64 protein	1,750
Chile fishmeal	67 protein	1,850
Iceland fishmeal	70 protein	1,800

 

 

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	1650/1670 m/t
65/66 protein	1700/1720 m/t
67 protein standard steam	1750/1770 m/t	No offers
67 protein SD 150  TVN	1850/1870 m/t	No offers
67 protein SD 120 TVN	1900/1920 m/t	1900/1920
67 protein SD 1000 hist, 120 TVN	1950/1970 m/t	1930/1950
68 protein SD 500 hist, 120 TVN	2000/2050++ m/t	1960/1990++
Fish oil, crude bulk	2000/2050	1700/1800
Fish oil, crude drums	2100/2150
Fish oil, flexi tank	2150/2200
Fish oil, Omega 3: 28%EPA/DHA	2450/2500

 

 

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