Weekly report -- June 25, 2016

 

HAMMERSMITH Marketing Ltd
-------------------------

Corporate Head Office: Suite 200B, Centre of Commerce, One Bay Street,

PO Box N-3944, Nassau, Bahamas.   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

 

So, what more can be said about the UK leaving the EU – that is about all that is in the news here in Europe. Speaking as a dual Canada/UK citizen living in the EU, I certainly have the odd concern about what can happen in the future. No one expects to get booted out of the EU or of the UK but it could be that all of us UK expats will now need yearly resident visas, much as other non-EU counties have to do. If that is the worst that happens, on a personal level, then that is not too bad.

 

Of course, a 10% drop in the British pound and a 2.8% drop in the Euro versus the USD will tend to hurt a bit. Perhaps now is the time to buy UK property with US$.

 

Back to the grain and oilseed markets – the combination of better weather in the US coupled with the Brexit panic certainly did a job on futures prices this week – luckily the cash prices were not quite as hard hit but for those looking at basis buying over Chicago prices were very soft.

 

The weather that had been expected will not happen and with corn showing 75% good/excellent followed by soybeans at 73% good/excellent then there does not seem to be any short term weather concerns in the US. Of course, as the exports are quick to point out, corn is going to need some rainfall in the next three weeks as it gets ready for pollination. So, as usual, weather is still a major risk factor for corn.

 

Reports on soybeans say that much of the fall in prices this week was due to Brexit concerns. One trade reports said that some traders started liquidating their longs early in the week on fears of a market upset no matter which way the UK/EU things went. It takes something like this Brexit situation for us all to realize just how closely all these "financial" factors fit together and how quickly the "big money" can jump out of one market into another.

 

The only reason that Brexit can affect corn and soybeans is that the largest chunk of the futures trading has little or nothing to do with hedging or actual physical buying or selling but is just another financial instrument used for investment and speculation – but, I am sure that we all know that.    

 

Next week, after the Brexit effect has calmed down a little we will see the market back to their normal ups and downs – one hopes

 

 

 

 

 

Crop planting progress and condition --- USA and France

 

Planting USA	June 19 2016 %	June 19 2015 %	Five year Average %
Sorghum	88	81	86
Soybeans	96	89	93
Condition USA June 19, 2016	Very poor	Poor	Fair	Good	Excellent
Winter wheat - %	2	7	30	49	12
Spring wheat	1	3	20	64	12
Barley	0	1	22	60	17
Corn	1	3	21	60	15
Soybeans	1	4	22	61	12
Sorghum	1	3	27	62	8
Condition France June 20, 2016	Very poor	Poor	Fair	Good	Excellent
Wheat	2	8	20	54	17
Winter barley	2	9	21	54	13
Durum wheat	4	12	25	49	9
Spring barley	0	7	17	55	21
Corn	3	7	21	65	4

@USDA and France AgriMer

 

The condition of all French grain crops has dropped this week due to the prolonged period of heavy rains in much of France.

 

 

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

 

The new, expanded Panama Canal opens on June 26 with trial transits being done this past week with few if any problems. The new canal can accept vessels up to 1,200 feet max (old was 965 feet), new max width of 160.7 feet (old at 106 feet), New draft at 49.9 feet (old at 41.2 feet) and for container people up to 13,000 TEU versus the old limit of 5,000 TEU. Vessels meeting the new maximum standard have been described as "neopanamax" and vessels are being built to match the standards.

 

US Gulf to Europe: 60/70,000 (10,000 disch)	$16/17.00	Up $1.00	X
US Gulf to Spain: 30,000 m/t (5,000 disch)	$21/22.00	Steady	x
US Gulf Israel: 50,000 MT	$20/21.00	corrected	X
US Gulf to Egypt: Panamax(6,000 disch)	$19/20.00	corrected	X
US Gulf Turkey: 50,000	$21/22.00	Corrected	X
US Gulf Morocco: 30,000(5,000 disch)	$32/33.00	Up $1.00	X
US Gulf Nigeria: 30,000 m/t	$49/50.00	Up $3.00	X
US Gulf other Med: 30,000 MT(5,000 disch)	$32/33.00	Up $1.00	X
US Gulf Japan: Panamax	$28/29.00	Corrected	X
US Gulf China: Panamax	$26/27.00	Corrected	X
US PNW South Africa	$31/32.00	Steady
US PNW Japan: Panamax	$16/17.00	Steady	X
US PNW China: Panamax	$14/15.00	Steady	x
US East Coast Egypt: Panamax	$42/43.00	Up $1.00	X
US East Coast Nigeria: Handisize	$49/50.00	Up $1.00	x
France/Germany to Algeria: 30,000 m/t(3,000 disch)	$24/25.00	Steady	x
France/Germany to Egypt: 50,000 m/t (10,000 disch)	$22/23.00	Steady	x
France/Germany to Jordan: 35/45,000 m/t (4,000 disch)	$28/29.00	Steady	x
France/Germany to Morocco: 30,000 m/t (3,000 disch)	$23/24.00	Steady	x
France/Germany to Saudi Arabia: 50/60,000	$30/31.00	Steady	x
France/Germany to South Africa: 30,000 m/t	$30/31.00	Steady	x
France/Germany to Yemen: 30,000 m/t	$48/49.00	Up $1.00	x
Argentina to Algeria: 25/30,000 m/t(3,000 disch)	$27/28.00	Up $2.00	x
Argentina to China: 50,000 m/t, with top-off	$28/29.00	Up $1.00	X
Argentina to Japan: 50,000 m/t, with top-off	$30/31.00	Up $2.00	x
Argentina to Egypt: 50,000 m/t	$23/24.00	Down $1.00	x
Argentina to Europe: 50/60,000 m/t	$25/26.00	Up $1.00	x
Argentina to Morocco: 25/30,000 m/t(3,000 disch)	$25/26.00	Up $2.00	x
Argentina to Saudi Arabia: 25/30,000 m/t	$43/44.00	Up $2.00	x
Argentina to South Africa 25/30,000 m/t (3,000 disch)	$26/27.00	Up $1.00	x
Argentina to Spain: 30,000 m/t	$28/29.00	Up $1.00	x
Argentina to Tunisia: 25/30,000 m/t(3,000 disch)	$27/28.00	Up $2.00	x
Brazil to Algeria: 25/30,000 m/t	$28/29.00	Up $2.00	X
Brazil to China: 55,000 m/t	$19/20.00	Up $1.00	X
Brazil to Japan: 55,000 m/t	$21/22.00	Up $1.00	X
Brazil to Europe: 30,000 m/t	$25/26.00	Up $1.00	X
Brazil to Morocco: 25/30,000 m/t	$25/26.00	Up $2.00	X
Brazil to Saudi Arabia 30/40,000 m/t	$39/40.00	Up $2.00	X
Brazil to Turkey/Egypt: 50,000 m/t	$22/23.00	Up $1.00	x
Australia to China: 40-55,000 m/t – round trip	$18.50/19.00	Up $1.00	X
Australia to Japan: 40-55,000 m/t – round trip	$19/19.50	Up $1.00	x
Australia to Saudi Arabia: 40-55,000 m/t	$21/22.00	Steady	x
Ukraine to China	$21/22.00	Steady	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)	$24/25.00	Steady	X
Black Sea to Egypt: 40/50,000 m/t – (6,000 disch)	$10/11.00	Up $1.00	X
Ukraine to Egypt: coaster 3,000 m/t (1,000 disch)	$24/25.00	Steady	X
Black Sea to Iraq: 50,000 m/t (4,000 disch)	$26/27.00	Up $1.00	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)	$13/14.00	Up $2.00	X
Black Sea to Jordan: 50,000 m/t (4,000 disch)	$17/18.00	Steady	X
Black Sea to Saudi Arabia – Jeddah – 50k	$20/21.00	Steady	X
Black Sea to South Africa – 30,000 m//t	$28/29.00	Up $1.00	X
Black Sea to Tunisia/Algeria: 30,000(5,000 disch)	$17/18.00	steady	x
Baltic Dry Index	609	Up 22	x
Baltic Capesize Index	913	Down 14	X
Baltic Panamax Index	585	Up 39	X
Baltic Supramax Index	583	Up 28	x
Baltic Handisize Index	329	Up 18	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 July/September 2016

 

Wheat, USA Soft Red Winter, NOLA	USD 198/202	X
Wheat, USA Hard Red Winter 12 protein	USD 198/200	x
Wheat, Ukraine 11.5 pro, 30,000+ m/t	USD 173/176	x
Wheat, Russia 12.5 pro, 30,000+ m/t	USD 176/180	x
Wheat, Romania 12.5 pro	USD 178/181	x
Wheat, Superior, France, Rouen	USD 177/179	x
Wheat, Medium, France, Rouen	USD 176/178	x
Wheat, milling, 12.0%, Argentina, upriver	USD 206/209	x
Wheat, feed, Black Sea	USD 165/169	x
Barley, France, Rouen port	USD 152/155	x
Barley, feed, Argentina	USD 150/156	x
Barley, feed, Black Sea, 30,000+	USD 154/158	x
Barley, feed, USA Pacific Northwest	USD 190/195	x
Corn, FOB NOLA USA	USD 184/190	x
Corn, FOB USA Pacific northwest	USD 185/189	x
Corn, CNF Asia, USA #2	USD 217/220	x
Corn, FOB Argentina port, upriver	USD 183/186	x
Corn, FOB Brazil port	USD 186/190	x
Corn, FOB Black Sea, 30,000+ m/t	USD 198/202
Corn, FOB France	USD 192/197	x
Corn, FOB Romania	USD 201/206
Sorghum, FOB Texas	USD 186/188	x
Sorghum, FOB Argentina port	USD 165/169	x
Soymeal, 48% protein, FOB NOLA	USD 438/444	x
Soymeal, 48% protein, USA, Rotterdam	USD 470/476	X
Soymeal, 46.5 pro, USA CNF Asia	USD 480/484	x
Soymeal, Argentina, Rotterdam	USD 442/450	x
Soymeal, 47% pro, FOB Argentina	USD 415/420	X
Soymeal, 48% protein, Brazil, Rotterdam	USD 444/452	X
Soymeal, FOB Brazil	USD 414/420	x
Soymeal, 48% protein, India FAQ	No offers	x
Soybeans, FOB NOLA	USD 423/427	x
Soybeans USA #2, CNF Asia	USD 472/479	x
Soybeans, Argentina, FOB	USD 429/431	x
Soybeans, Brazil, FOB	USD 459/463	x
Soybeans, Black Sea	USD 440/445	x
Corn Gluten Meal, USA FOB NOLA	USD  615/625 m/t	x
Corn Gluten Meal, USA CNF Asia, cont.	USD  745>>740 m/t	X
Corn Gluten Meal, CNF Egypt	USD  775>>765 m/t	X
Corn Gluten Feed, USA FOB NOLA	USD  150/155 m/t	x
DDGS corn, 35 profat, USA FOB NOLA	USD  225>>210 m/t	x
DDGS corn, 35 profat, USA CNF Asia, cont	USD  251>>239 m/t	x

 

Much like the grain markets, the corn by-product markets were somewhat confused as the week came to an end. The new UK/EU situation rattled currency markets and pushed the US$ up against most currencies. US export DDGS prices were steady to higher or steady to lower, depending on who you are talking to. It was the same with US domestic prices where some areas report higher DDGS prices while others were lower. Perhaps it will just take a little longer to adjust to the lower corn prices. With corn down by about USD 20 m/t and soymeal down by USD 30 m/t, even strong export demand should not be able to keep corn by-products from moving lower.

 

Most of the USDA weekly price reports are issued earlier in the week so don't as yet take into account the large drop in corn and soymeal prices this week. But the USDA prices and the export prices should all be lower next week.   

 

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 430/440 m/t CNF Asia  USD 460/470 m/t CNF Asia  USD 470/480 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 470/480 m/t CNF Asia  USD 520/530 m/t CNF Asia  USD 470/490 m/t CNF Asia  USD 790/810 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 520/540 m/t CNF Asia  USD 480/500 m/t CNF Asia  USD 620/640 m/t CNF Asia  USD 770/800 m/t CNF Asia

 

Reports say that buying demand for animal proteins from Asia was quite strong this week but any strength this week will probably not hold due to the large drop in the prices for vegetable proteins. Supplies of animal proteins from both Australia and New Zealand are said to be tight so this may help to limit any market price weakness in the short term.

 

USA export prices were also up on the week but this will be tough to carry into next week unless there is a rally in US soymeal. Some reports at the end of the week are saying that USA domestic animal protein prices could move higher as the supply is tight, especially for meat and bone meal.

 

It will be interesting to see what happens this coming week once the Brexit situation is factored into more markets. Brexit certainly seemed to shake the grain markets and to Dow Jones but can it upset animal proteins – one never knows.    

 

A little info on China, total imports of meat and bone meal to end of May 2016 were 90,800 m/t with 52,700 m.t coming from the USA, 21,800 m/t from Uruguay, 8,300 m/t from Australia, 4,400 m/t from New Zealand and 3,500 m/t from Argentina.

 

 

 

SECTION 2 --- FISHMEAL COMMENTS AND PRICES: PERUVIAN

 

Fishing kicked off in the north of Peru on the 18^th and in the first few days averaged about 20,000 m/t per day with just 175 or so vessels per day, on average, out fishing. Meanwhile, in the south of Peru about 40 percent of the 380,000 m/t quota has now been landed with the fishing period to end on June 30 – unless it is extended. However, for the south, there would normally be a new quota starting on July 1^st so an extension does not seem to likely.

 

There seems to be no current trading at all in Peruvian fishmeal, as sellers are waiting to see how the early catch progresses while buyers are waiting for a serious drop in prices. Much will really depend on the catch as if is continues at only 20,000 m/t per day it would take 90 day to land the quota and we probably only have 45 days or so, certainly not 90 days.

 

There were some comments from the experts this week that if the quota does not look to be able to be fully landed then there is probably little chance of a major price drop. It is all going to depend on the daily catch levels and the number of expected fishing days left. It is all just a matter of mathematics.

 

There was some discussion in the trade this week about when the fish will spawn and when fishing may have to be stopped due to spawning – looks like it is all up to momma anchovy.

 

On the price side, it does look like estimated prices have dropped by USD 50 to 100 m/t but these new prices are largely estimates as little business has been reported. Good northern fishing should mean weaker prices but poor fishing will keep prices steady.

 

One more bit of information, China Jan/May fishmeal imports totaled 417,000 m/t with 209,000 m/t from Peru, 39,000 m/t from Vietnam, 34,500 m/t from Russia, 33,600 m/t from USA, 30,300 m/t from Thailand 20,700 m/t from Chile and 15,100 m/t from Ecuador – these are all the major origins.

  

 

European fishmeal prices – FOB North German port.

 

Type	Protein %	Price per m/t USD
Herring fishmeal	72% protein	1,910
Danish fishmeal	64% protein	1,510
Peru fishmeal	64% protein	1,610
Chile fishmeal	67% protein	1,710
Iceland fishmeal	70% protein	1,950

 

 

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	1650/1700 m/t
65/66 protein	1670/1690 m/t
67% protein standard steam	1720/1740 m/t	No offers
67% protein 150 TVN	1770/1790 m/t	No offers
67% protein 120 TVN	1800/1820 m/t	No offers
67% protein 1000 hist, 120 TVN	1830/1850 m/t	1830/1850
68% protein 500 hist, 120 TVN	1850/1900 m/t	1850/1900
Fish oil, crude bulk	2200/2250	1650/1700
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