Weekly report - May 14, 2016

 

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

 

 

SECTION 1:  US FEED GRAINS and VEGETABLE AND ANIMAL PROTEIN

 

The USDA WASDE Report (world supply and demand) certainly got the market excited this week. We finished off the week with US corn futures prices up by just over USD 5 while US soybean futures were up by USD 11 m/t and US soymeal futures rallied by about USD 20 m/t. One can assume that the US farmers were quite happy as the week ended – nothing like higher price to make farmers smile.

 

Soybeans and soymeal were up strongly due to the USDA reducing world and US soybean stocks significantly from last month's forecasts. The 2016/17 world soybean stocks are forecasted to be at a three-year low. Crop problems in South America – both Argentina and Brazil – along with very good world demand and high USA crushing volumes could make stocks tight --- so, up go prices.

 

Corn prices did get pushed higher this week but not because the WASDE report showed less corn but more because it is expected that higher soybean prices could get US farmers to switch and plant more soybeans and less corn. This possible switch in US planting was not a part of the WASDE report forecasts and is just what the market experts are saying could happen. If anything the WASDE report was probably neutral for corn while a bearish report had been expected.

 

One thing to note with US corn is that at current price levels it is very competitive in world export markets and there has been a very good increase in export orders to markets that for 8 or 9 months of the year just don't buy US corn or buy very little.

 

It was interesting to see that a shipment of UK feed wheat was made to the US – the first in a long time. Hard to imagine that US corn is competitive in world markets but feed wheat can still be imported into the US at a lower cost. Well, that is world markets for you and a good example of buying opportunities that can spring up.

 

Also interesting is that quite a few trade reports feel that the soybean rally was probably overdone and that we could see prices slipping a little lower. The harvest weather is improving in Argentina and soybean losses may not be as high as some had said but with the harvest just about 50% completed it is difficult to know for sure.   

 

This coming week should be an interesting one for prices.

  

 

Crop planting progress and condition --- USA and France

 

Planting USA	May 08 2016	May 08 2015	Five year Average
Corn	64.0%	69.0%	50.0%
Sorghum	30.0%	31.0%	31.0%
Soybeans	23.0%	26.0%	16.0%
Spring Wheat	77.0%	84.0%	51.0%
Barley	79.0%	84.0%	60.0%
Condition USA	Very poor	Poor	Fair	Good	Excellent
Winter wheat	1.0%	6.0%	31.0%	51.0%	11.0%
Planting France	May 09 2016	May 09 2015
Corn	78.0%	89.0%
Barley	100.0%	100.0%
Condition France	Very poor	Poor	Fair	Good	Excellent
Wheat	1	3	10	54	33
Winter barley	1	3	11	57	28
Durum wheat	1	6	16	57	21
Spring barley	0	1	6	68	25

@USDA and France AgriMer

 

 

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

 

US Gulf to Europe: 60/70,000 (10,000 disch)	$13/14.00	Steady	x
US Gulf to Spain: 30,000 m/t (5,000 disch)	$20/21.00	Down $2.00	x
US Gulf Israel: 50,000 MT	$20/21.00	Down $1.00	X
US Gulf to Egypt: Panamax(6,000 disch)	$19/20.00	Down $1.00	X
US Gulf Turkey: 50,000	$21/22.00	Down $1.00	x
US Gulf Morocco: 25,000(3,000 disch)	$28/29.00	Steady	X
US Gulf Nigeria: 30,000 m/t	$47/48.00	Down $2.00	X
US Gulf other Med: 25,000 MT(3,000 disch)	$28/29.00	Down $1.00	X
US Gulf Japan: Panamax	$25/26.00	Up $1.00	X
US Gulf China: Panamax	$24/25.00	Up $1.00	X
US PNW South Africa	$31/32.00	Up $1.00	X
US PNW Japan: Panamax	$15/16.00	Steady	X
US PNW China: Panamax	$14/15.00	Steady	x
US East Coast Egypt: Panamax	$41/42.00	Steady	x
US East Coast Nigeria: Handisize	$48/49.00	Steady	X
France/Germany to Algeria: 30,000 m/t(3,000 disch)	$26/27.00	Steady	x
France/Germany to Egypt: 50,000 m/t (10,000 disch)	$23/24.00	Steady	X
France/Germany to Jordan: 35/45,000 m/t (4,000 disch)	$30/31.00	Steady	X
France/Germany to Morocco: 30,000 m/t (3,000 disch)	$25/26.00	Steady	X
France/Germany to Saudi Arabia: 50/60,000	$30/31.00	Steady	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	$49/50.00	Steady	X
Argentina to Algeria: 25/30,000 m/t(3,000 disch)	$25/26.00	Up $1.00	X
Argentina to China: 50,000 m/t, with top-off	$25/26.00	Up $1.00	X
Argentina to Japan: 50,000 m/t, with top-off	$26/27.00	Up $1.00	x
Argentina to Egypt: 50,000 m/t	$22/23.00	Steady	X
Argentina to Europe: 50/60,000 m/t	$20/21.00	Up $1.00	X
Argentina to Morocco: 25/30,000 m/t(3,000 disch)	$23/24.00	Up $1.00	X
Argentina to Saudi Arabia: 40,000 m/t	$38/39.00	Up $1.00	X
Argentina to South Africa 25/30,000 m/t (3,000 disch)	$25/26.00	Up $1.00	X
Argentina to Spain: 30,000 m/t	$26/27.00	Up $1.00	X
Argentina to Tunisia: 25/30,000 m/t(3,000 disch)	$25/26.00	Up $1.00	X
Brazil to Algeria: 25/30,000 m/t	$26/27.00	Steady	X
Brazil to China: 55,000 m/t	$18/19.00	Down $2.00	X
Brazil to Japan: 55,000 m/t	$20/21.00	Down $1.00	x
Brazil to Europe: 30,000 m/t	$26/27.00	Steady	X
Brazil to Morocco: 25/30,000 m/t	$23/24.00	Steady	x
Brazil to Saudi Arabia 30/40,000 m/t	$35/36.00	Steady	x
Brazil to Turkey/Egypt: 50,000 m/t	$20/21.00	Steady	X
Australia to China: 40-55,000 m/t	$17.50/18.00	Steady	x
Australia to Japan: 40-55,000 m/t	$18/18.50	Steady	x
Australia to Saudi Arabia: 40-55,000 m/t	$23/24.00	Steady	x
Ukraine to China	$20/1.00	Down $1.00	X
Black Sea to East Med: 30,000 m/t  (3,000 disch)	$23/24.00	Steady	X
Ukraine to East Med: coaster (1,000 disch)	$28/29.00	Steady	X
Black Sea to Egypt: 40/50,000 m/t – (6,000 disch)	$11/12.00	Up $2.00	X
Ukraine to Egypt: coaster 3,000 m/t (1,000 disch)	$28/29.00	Steady	X
Black Sea to Iraq: 50,000 m/t (4,000 disch)	$26/27.00	Up $2.00	X
Black Sea to Morocco: 30,000 m/t (3,000 disch)	$21/22.00	Steady	X
Black Sea to Spain: 40/50,000 m/t (8,000 disch)	$14/15.00	Up $2.00	X
Black Sea to Jordan: 50,000 m/t (4,000 disch)	$18/19.00	Up $2.00	X
Black Sea to Saudi Arabia – Jeddah – 50k	$20/21.00	Down $1.00	x
Black Sea to South Africa – 30,000 m//t	$27/28.00	Steady	X
Black Sea to Tunisia/Algeria: 30,000(5,000 disch)	$17/18.00	Steady	X
Baltic Dry Index	600	Down 31	x
Baltic Capesize Index	798	Down 94	x
Baltic Panamax Index	597	Up 6	x
Baltic Supramax Index	553	Down 25	x
Baltic Handisize Index	347	Down 12	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 June/August 2016

 

Wheat, USA Soft Red Winter, NOLA	USD 198/202	x
Wheat, USA Hard Red Winter 12 protein	USD 195/201	x
Wheat, Ukraine 11.5 pro, 30,000+ m/t	USD 182/186	x
Wheat, Russia 12.5 pro, 30,000+ m/t	USD 195/198	x
Wheat, Romania 12.5 pro	USD 190/194	x
Wheat, Superior, France, Rouen	USD 176/178	x
Wheat, Medium, France, Rouen	USD 174/176	x
Wheat, milling, 12.0%, Argentina, upriver	USD 198/203	x
Wheat, feed, Black Sea	USD 175/179	x
Barley, France, Rouen port	USD 167/169	x
Barley, feed, Argentina	USD 169/171	x
Barley, feed, Black Sea, 30,000+	USD 167/168	x
Barley, feed, USA Pacific Northwest	USD 190/195	x
Corn, FOB NOLA USA	USD 173/177	x
Corn, FOB USA Pacific northwest	USD 179/183	x
Corn, CNF Asia, USA #2	USD 209/211	x
Corn, FOB Argentina port, upriver	USD 164/167	x
Corn, FOB Brazil port	USD 177/180	x
Corn, FOB Black Sea, 30,000+ m/t	USD 185/188	x
Corn, FOB France	USD 190/195	X
Corn, FOB Romania	USD 183/186	x
Sorghum, FOB Texas	USD 180>>/175	x
Sorghum, FOB Argentina port	USD 164/167	x
Soymeal, 48% protein, FOB NOLA	USD 435/440	x
Soymeal, 48% protein, USA, Rotterdam	USD 470/475	X
Soymeal, 46.5 pro, USA CNF Asia	USD 462/465	x
Soymeal, Argentina, Rotterdam	USD 421/425	x
Soymeal, 47% pro, FOB Argentina	USD 389/393	x
Soymeal, 48% protein, Brazil, Rotterdam	USD 413/417	x
Soymeal, FOB Brazil	USD 375/380	x
Soymeal, 48% protein, India FAQ	USD 630/635	x
Soybeans, FOB NOLA	USD 408/412	x
Soybeans USA #2, CNF Asia	USD 448/452	x
Soybeans, Argentina, FOB	USD 397/401	x
Soybeans, Brazil, FOB	USD 411/415	x
Soybeans, Black Sea	USD 400/410	x
Corn Gluten Meal, USA FOB NOLA	USD  580/590 m/t	x
Corn Gluten Meal, USA CNF Asia, cont.	USD  620/625 m/t	x
Corn Gluten Feed, USA FOB NOLA	USD  150/155 m/t	x
DDGS corn, 35 profat, USA FOB NOLA	USD  215>>197 m/t	x
DDGS corn, 35 profat, USA CNF Asia, cont	USD  250>>231 m/t	x

 

The problem with corn byproducts at present is that the shipping positions over the next few weeks are heavily sold which has pushed up prices for the next 8 weeks or so to significant spreads over more distant prices. Buyers who need to cover anything much for May/June and in some cases well into July are having to kick in some extra money to get shipments.

 

Export demand for DDGS has been very good and the trade reports that China seems to be back into the DDGS market. Corn Gluten Meal too has taken a good jump higher – much higher than the increase in corn prices would justify but as a 60% protein product the rally in soymeal tends to push CGM prices up very quickly – when everyone wants protein then prices are bound to move higher. US domestic prices for CGM were up by close to USD 25 m/t.

 

Corn gluten feed too was higher; some say that this is due to CGF prices actually getting too low in recent days so it is more of an adjustment to more accurate market prices. Of course, we did have corn up by another USD 5 m/t this week so this is bound to have an upward effect on CGF prices.  According to the USDA, the domestic CGF price were up on average by close to USD 15 m/t.

 

 

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 405/425 m/t CNF Asia  USD 430/440 m/t CNF Asia  USD 410/420 m/t CNF Asia
Paraguay Meat &Bone meal, 45% protein	USD 340/360 m/t CNF Asia
Australian MBM 45 protein    Australian MBM 50 protein    Australian Feathermeal, 80 protein    Australian Poultry Meal, pet food	USD 420/440 m/t CNF Asia  USD 465/475 m/t CNF Asia  USD 490/500 m/t CNF Asia  USD 710/730 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 430/450 m/t CNF Asia  USD 530/550 m/t CNF Asia  USD 730/760 m/t CNF Asia

 

There seems to be quite a bit of buying interest from Asia for animal proteins – spurred on mainly by the rally in vegetable protein prices. With soymeal up by another USD 20 m/t or so and corn gluten meal also up strongly, protein buyers are tending to snap up whatever reasonable priced protein that they can find. Meat and bone meal prices have not moved up as much as soymeal, at least not so far. The jump in buyer demand is bond to push up prices from both Australia and New Zealand.

 

Buyers in both Bangladesh and Vietnam are still paying prices considerably below those from OZ/NZ/USA as there seems to be a great deal of low cost European MBM available. The same can be said about supplies from South America where prices from both Argentina and Uruguay have moved higher their protein prices have moved up quickly following local export soymeal prices.

 

USA domestic prices have no done anything too exciting but it is expected that the stronger soymeal prices will certainly move MBM and poultry meal prices higher in coming days. US feather meal seems to be the weakest on the animal proteins and no one seems to be talking about higher feathermeal prices in the short term but you never know for sure.

 

 

SECTION 2 --- FISHMEAL COMMENTS AND PRICES: PERUVIAN

 

The fishing quota situation in Peru is getting more and more difficult for the industry. The way things seem to be today there could be a good chance that there may be no new fishing quota at all but perhaps this is a little of an overreaction in the minds of some Peru experts.

 

The latest IMARPE biomass information says that the current biomass is about 46% lower than average although it is higher than Peru's 2015 winter biomass level. However, down 46% would seem to be quite significant. IMARPE has suggested that another cruise be undertaken in order to confirm the biomass situation.

 

The next actions are up to the Peru government and, according to MSI Ceres (www.msiceres.com) the possible alternatives are limited to: declare a new quota based on current info, conduct another IMARPE biomass cruise or conduct a broader Eureka test fishing operation. For the industry it would perhaps be best to reconfirm the information rather than just declare no quota or a very small quota.

 

From the sales point of view, there has been little or nothing done as producers are just not willing to book any future business until there is a little more concrete information on what the next few months will bring. It has been reported that Chinese buyers are scouting all other fishmeal markets to insure supply just in case Peru cannot supply. China certainly cannot do without a supply of fishmeal.

 

The next few weeks will be very interesting in the fishmeal business and, to complicate matters, Peru is having an election in early June so the decision makers could easily change which will lead to more market uncertainty.  

 

As to prices – no change this week as no business being done.

 

 

European fishmeal prices – FOB North German port.

 

Type	Protein %	Price per m/t USD
Herring fishmeal	72% protein	1,830
Danish fishmeal	64% protein	1,470
Peru fishmeal	64% protein	1,550
Chile fishmeal	67% protein	1,600
Iceland fishmeal	70% protein	1,820

 

 

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	1320/1330 m/t
65/66 protein	1340/1360 m/t
67% protein standard steam	1370/1390 m/t	No offers
67% protein 150 TVN	1400/1420 m/t	No offers
67% protein 120 TVN	1500/1520 m/t	1550/1580
67% protein 1000 hist, 120 TVN	1550/1570 m/t	1600/1620
68% protein 500 hist, 120 TVN	1600/1620 m/t	1620/1640
Fish oil, crude bulk	2200/2250	1800/1900
Fish oil, crude drums	2350/2400
Fish oil, flexi tank	2450/2500
Fish oil, Omega 3: 28%EPA/DHA	2700/2800

 

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

           

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 © 2016 Wayne S. Bacon