Weekly Report July 09, 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

 

 

Spent a very pleasant few days in the Bordeaux region of France with my wife – even took a wine tasting course. Temperatures were in the mid-30's C with the only complication being all the roads that were closed or redirected due to the Tour de France. My GPS seems to deal poorly with detours.

 

 

SECTION 1:  US FEED GRAINS and VEGETABLE AND ANIMAL PROTEIN

 

Although last week did finish off very strongly on Friday, we ended up with a week of lower prices for corn, soybeans and soymeal with only whet able to show some strength on the week.

 

Corn futures prices would have been down about USD 7 on the week but due to the rally on Friday we were only down by about USD 2 m/t. Soybeans ended the week down by close to USD 30 m/t in the futures market but would have been another USD 13 down had it not been for the Friday rally. Soymeal was down by about USD 28 on the week after rallying USD 9 m/t higher on Friday.

 

So, it would have been a very down week except for the sudden change on Friday. Much of the corn price rally on Friday was due to the much lower crop estimates from Brazil. Corn crop estimates were dropped by 10 percent from the June estimates and this is now 18 percent down on last year. Some experts did say that corn prices had dropped too low and the Brazil news just gets price back to more normal levels. Soybean prices rallied from recent lows somewhat following corn but also due to hot weather in the USA.

 

We get the latest USDA WASDE report next week so this should get the market excited for a day or two. The feeling in the trade reports is that ending stocks for corn, soybeans and wheat will move higher. Will this push prices lower, perhaps, but the weather over the next few weeks is probably a much bigger factor on where prices will be headed. For now the weather in the US looks quite good for corn and soybeans but perhaps a little more difficult for the US winter wheat harvest in some areas due to rainfall.

 

 

 

 

 

Crop condition --- USA and France

 

Condition USA July 05, 2016	Very poor	Poor	Fair	Good	Excellent
Winter wheat - %	2	7	29	48	14
Spring wheat	1	5	22	62	10
Barley	0	2	23	60	15
Corn	1	4	20	59	16
Soybeans	2	5	23	57	13
Sorghum	0	3	28	60	9
Condition France July 04, 2016	Very poor	Poor	Fair	Good	Excellent
Wheat	3	13	25	48	11
Winter barley	6	16	25	45	8
Durum wheat	7	14	25	46	9
Spring barley	1	12	21	54	13
Corn	3	7	21	63	6

@USDA and France AgriMer

 

The condition of French wheat and barley continues lower again this week.

 

 

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

 

US Gulf to Europe: 60/70,000 (10,000 disch)	$16/17.00	Steady	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	Steady	x
US Gulf to Egypt: Panamax(6,000 disch)	$19/20.00	Steady	x
US Gulf Turkey: 50,000	$21/22.00	Steady	x
US Gulf Morocco: 30,000(5,000 disch)	$33/34.00	Steady	x
US Gulf Nigeria: 30,000 m/t	$49/50.00	Steady	x
US Gulf other Med: 30,000 MT(5,000 disch)	$33/34.00	Steady	x
US Gulf Japan: Panamax	$27/28.00	Down $2.00	X
US Gulf China: Panamax	$25/26.00	Down $2.00	x
US PNW South Africa	$31/32.00	Steady	x
US PNW Japan: Panamax	$15/16.00	Down $1.00	X
US PNW China: Panamax	$14/15.00	Steady	x
US East Coast Egypt: Panamax	$42/43.00	Steady	x
US East Coast Nigeria: Handisize	$50/51.00	Steady	x
France/Germany to Algeria: 30,000 m/t(3,000 disch)	$25/26.00	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)	$29/30.00	Steady	X
France/Germany to Morocco: 30,000 m/t (3,000 disch)	$24/25.00	Steady	X
France/Germany to Saudi Arabia: 50/60,000	$32/33.00	Up $1.00	X
France/Germany to South Africa: 30,000 m/t	$32/33.00	Steady	X
France/Germany to Yemen: 30,000 m/t	$50/51.00	Steady	x
Argentina to Algeria: 25/30,000 m/t(3,000 disch)	$29/30.00	Steady	x
Argentina to China: 50,000 m/t, with top-off	$28/29.00	Steady	x
Argentina to Japan: 50,000 m/t, with top-off	$30/31.00	Steady	x
Argentina to Egypt: 50,000 m/t	$22/23.00	Down $1.00	x
Argentina to Europe: 50/60,000 m/t	$26/27.00	Steady	x
Argentina to Morocco: 25/30,000 m/t(3,000 disch)	$27/28.00	Steady	x
Argentina to Saudi Arabia: 25/30,000 m/t	$45/46.00	Steady	x
Argentina to South Africa 25/30,000 m/t (3,000 disch)	$27/28.00	Steady	x
Argentina to Spain: 30,000 m/t	$29/30.00	Steady	x
Argentina to Tunisia: 25/30,000 m/t (3,000 disch)	$29/30.00	Steady	x
Brazil to Algeria: 25/30,000 m/t	$29/30.00	Steady	x
Brazil to China: 55,000 m/t	$19/20.00	Down $1.00	X
Brazil to Japan: 55,000 m/t	$21/22.00	Down $1.00	x
Brazil to Europe: 30,000 m/t	$26/27.00	Steady	x
Brazil to Morocco: 25/30,000 m/t	$25/26.00	Down $1.00	x
Brazil to Saudi Arabia 30/40,000 m/t	$40/41.00	Steady	x
Brazil to Turkey/Egypt: 50,000 m/t	$21/22.00	Down $2.00	x
Australia to China: 40-55,000 m/t – round trip	$18.50/19.00	Steady	x
Australia to Japan: 40-55,000 m/t – round trip	$19/19.50	Steady	x
Australia to Saudi Arabia: 40-55,000 m/t	$22/23.00	Steady	x
Ukraine to China	$21/22.00	Steady	x
Black Sea to East Med: 30,000 m/t  (3,000 disch)	$24/25.00	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)	$9/10.00	Down $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)	$25/26.00	Down $1.00	x
Black Sea to Morocco: 30,000 m/t (3,000 disch)	$22/23.00	Steady	x
Black Sea to Spain: 40/50,000 m/t (8,000 disch)	$13/14.00	Steady	x
Black Sea to Jordan: 50,000 m/t (4,000 disch)	$16/17.00	Down $2.00	x
Black Sea to Saudi Arabia – Jeddah – 50k	$21/22.00	Steady	x
Black Sea to South Africa – 30,000 m//t	$29/30.00	Steady	x
Black Sea to Tunisia/Algeria: 30,000(5,000 disch)	$16/17.00	Down $2.00	x
Baltic Dry Index	703	Up 27	X
Baltic Capesize Index	1002	Down 28	X
Baltic Panamax Index	792	Up 101	X
Baltic Supramax Index	647	Up 20	X
Baltic Handisize Index	354	Up 10	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 186/191	x
Wheat, USA Hard Red Winter 12 protein	USD 191/197	x
Wheat, Ukraine 11.5 pro, 30,000+ m/t	USD 158/162	x
Wheat, Russia 12.5 pro, 30,000+ m/t	USD 163/167	x
Wheat, Romania 12.5 pro	USD 165/168	x
Wheat, Superior, France, Rouen	USD 174/176	X
Wheat, Medium, France, Rouen	USD 171/173	x
Wheat, milling, 12.0%, Argentina, upriver	USD 209/211	x
Wheat, feed, Black Sea	USD 156/160	x
Barley, France, Rouen port	USD 151/153	x
Barley, feed, Argentina	USD 147/150	x
Barley, feed, Black Sea, 30,000+	USD 145/149	X
Barley, feed, USA Pacific Northwest	USD 180/185	x
Corn, FOB NOLA USA	USD 173/177	x
Corn, FOB USA Pacific northwest	USD 174/179	x
Corn, FOB Argentina port, upriver	USD 170/174	x
Corn, FOB Brazil port	USD 179/183	x
Corn, FOB Black Sea, 30,000+ m/t	USD 176/180	x
Corn, FOB France	USD 191/194	x
Corn, FOB Romania	USD 173/177	X
Sorghum, FOB Texas	USD 172/175	x
Sorghum, FOB Argentina port	USD 155/160	x
Soymeal, 48% protein, FOB NOLA	USD 430/436	x
Soymeal, 48% protein, USA, Rotterdam	USD 462/468	X
Soymeal, Argentina, Rotterdam	USD 441/444	x
Soymeal, 47% pro, FOB Argentina	USD 411/414	x
Soymeal, 48% protein, Brazil, Rotterdam	USD 438/442	x
Soymeal, FOB Brazil	USD 410/414	x
Soymeal, 48% protein, India FAQ	No offers	x
Soybeans, FOB NOLA	USD 417/422	x
Soybeans, Argentina, FOB	USD 410/414	x
Soybeans, Brazil, FOB	USD 440/444	x
Soybeans, Black Sea	USD 460/465	x
Corn Gluten Meal, USA FOB NOLA	USD  585/600 m/t	x
Corn Gluten Meal, CNF Egypt	USD  750/760 m/t	x
Corn Gluten Feed, USA FOB NOLA	USD  150/155 m/t	x
DDGS corn, 35 profat, USA FOB NOLA	USD  200/206 m/t	x

 

As the price of corn sags lower, the prices of DDGS, corn gluten meal and corn gluten feed tend to follow along. The current weakness in soymeal prices is also putting pressure on both DDGS and CGM. CGM prices are also being pressured by the quite large drop in fishmeal prices in the past week. However, as noted below, fishmeal prices will probably not go too much lower due to the uncertainty in fishing in Peru.

 

It is interesting to note that drop in DDGS prices is mainly in August shipment positions but these positions had been very expensive lately as demand pushed prices for August higher – now prices are getting back closer to an even keel.

 

In the US domestic market, corn gluten feed prices dropped by close to USD 10 m/t with DDGS down as much as USD 15 m/t is some areas and, according to USDA information, corn gluten meal dropped as much as USD 20 m/t in selected areas.   

 

 

USA exports of corn by-products – January to May 2016 – in m/t – major destinations

 

	Corn Gluten  Meal	Corn Gluten Feed	Distillers Dried Grains -- DDGS
Australia	3,100
Bangladesh	2,300		5,300
Canada	25,900	10,700	211,200
Chile	8,900
China			968,600
Colombia	32,700	22,500	69,200
Costa Rica			39,200
Denmark	3,200
Egypt	86,800		40,900
El Salvador	4,300		31,400
Holland		19,800
Indonesia	94,100		164,700
Ireland		153,000	137,700
Israel		65,300	73,100
Japan	4,400		99,100
Korea, South			275,100
Malaysia	7,000		18,200
Mexico	12,500	6,100	790,100
Morocco		35,700	63,800
New Zealand			27,200
Pakistan			56,000
Philippines			63,000
Portugal		25,800	6,600
Spain			28,700
Taiwan	11,600		88,700
Thailand	11,200		241,000
Turkey		81,600	346,000
UK		27,000	76,000
Vietnam	5,700		348,900

@USDA GATS

 

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 495/505 m/t CNF Asia  USD 550/560 m/t CNF Asia  USD 500/520 m/t CNF Asia  USD 810/830 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 550/570 m/t CNF Asia  USD 520/540 m/t CNF Asia  USD 620/640 m/t CNF Asia  USD 830/840 m/t CNF Asia

 

Export animal protein prices into the major markets in Asia all showed an uptick this week – even as soymeal, corn gluten meal and fishmeal dropped lower. The main problem in Asia is that the current demand is greater than supply and buyer seem quite happy to pay up in order to lock in some product. Both meat and bone meal and feathermeal showed higher export prices from most origins.

 

US domestic prices were higher on the week but, as the first week in July is a very big vacation week, the increase in prices was on limited volume of sales. Most trade reports say that the US market was very quiet on the week. Depending on what vegetable proteins do over the next couple of weeks, animal proteins may trend lower in price.

 

As can be seen by the export numbers below, if you take Canada and Mexico out of the numbers then Asia is the largest destination for US animal proteins.

 

USA exports of animal protein – January to May 2016 – in m/t

 

	Meat and bone meal Includes pork and poultry Meal/	Feathermeal
Indonesia	52,000	11,000
Chile		7,100
Canada	27,000	5,100
Vietnam	10,300	400
China	25,500	2,400
Mexico	27,000
Philippines	7,900
Holland	3,000
Ecuador	4,200
Thailand	2,200
Honduras	3,000
Germany	2,500
Bangladesh	1,300
Guatemala	1,100
Costa Rica	1,000

@USDA GATS

 

 

 

SECTION 2 --- FISHMEAL COMMENTS AND PRICES: PERUVIAN

 

According to catch reports from Peru the total landed in the northern quota area is now at 600,000 m/t against the quota of 1.8 million m/t. This catch level will account for about 170,000 m/t of fishmeal and 23,000 m/t of fishoil. There has been no catch reported in the southern quota region.

 

Traders in Peru say that the export orders have finally started to flow in as China buyers appear to be taking some interest in the market. Also, while there is new business there is also a dip in prices as most grades dropped quite a bit this week with some being down as much as USD 100 m/t from recent high levels.  

 

The big question in Peru is whether or not the entire quota will be able to be caught. The trade reports that the spawning level is increasing and there is an expectation that the government will start with some mini-bans in areas where the spawning is highest. MSI Ceres has said that they expect the catch will top off at about 1.4 million m/t.

 

With the total catch so much in question, there is the feeling that prices will not see any drastic drop lower as no one knows how much fishmeal will be available. The last week has seen the catch average at 35,000 m/t per day, so with three weeks left in July perhaps another 750,000 m/t of fishing can be landed. August is not a good fishing month so it is hard to know what will happen after the end of July. 

 

 

European fishmeal prices – FOB North German port.

 

Type	Protein %	Price per m/t USD
Herring fishmeal	72% protein	1,850
Danish fishmeal	64% protein	1,490
Peru fishmeal	64% protein	1,590
Chile fishmeal	67% protein	1,690
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	1550/1560 m/t
65/66 protein	1580/1590 m/t
67% protein standard steam	1600/1610 m/t	No offers
67% protein 150 TVN	1630/1640 m/t	No offers
67% protein 120 TVN	1680/1690 m/t	No offers
67% protein 1000 hist, 120 TVN	1730/1740 m/t	1730/1740
68% protein 500 hist, 120 TVN	1780/1790 m/t	1780/1790
Fish oil, crude bulk	2000/2050	1650/1700
Fish oil, crude drums	2150/2200
Fish oil, flexi tank	2250/2300
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