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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
Monday July 4, 2016 is a holiday in the US so markets are closed until Tuesday. Ramadan ends this coming week so from about July 6 or 7 offices in the Muslim world will be closed for the Eid al Fitr holidays for at least a couple of days, longer in some countries.
SECTION 1: US FEED GRAINS and VEGETABLE AND ANIMAL PROTEIN
As usual, another interesting week in the grain business mainly due to another surprise from the USDA. US corn prices finished the week down by about USD 11 m/t while US soybeans were up by USD 17 m/t, soymeal up by USD 28 m/t while most US wheat prices dropped by USD 10 to 13 m/t.
The combination of the USDA report on Thursday and a three-day holiday weekend in the US certainly got the markets all excited. Corn plantings are reported to be at the third highest level in the past 70 years and significantly above the level that most experts had been forecasting. Corn stocks too were above expected levels. Soybeans also have increased planting and the soybean stocks are above what was expected. However, strong export sales are expected to offset higher current inventories and greater planting levels.
The rally in soybean/soymeal prices was mainly due to the USDA projections coming in lower than most experts had been forecasting. However, the soybean crush was higher and the long term weather looks hot and dry – both somewhat bullish factors for beans and meal.
For corn, the experts are saying that the prices probably dipped too low and that next week we could see a move back a little higher. The hot dry weather could also work to push corn prices higher. Recent USA corn exports have been very good but the overall corn export level is still running below where the forecasts had expected.
So, perhaps a move back up for corn next week while soybeans/soymeal could slip a little after this week's strong rally.
Crop condition --- USA and France
| Condition USA June 27, 2016 | Very poor | Poor | Fair | Good | Excellent |
| Winter wheat - % | 2 | 7 | 29 | 48 | 14 |
| Spring wheat | 1 | 4 | 23 | 62 | 10 |
| Barley | 0 | 2 | 23 | 60 | 15 |
| Corn | 1 | 4 | 20 | 59 | 16 |
| Soybeans | 1 | 4 | 22 | 61 | 12 |
| Sorghum | 0 | 3 | 27 | 61 | 9 |
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| Condition France June 27, 2016 | Very poor | Poor | Fair | Good | Excellent |
| Wheat | 3 | 10 | 22 | 51 | 14 |
| Winter barley | 4 | 12 | 23 | 51 | 11 |
| Durum wheat | 7 | 13 | 25 | 46 | 9 |
| Spring barley | 1 | 10 | 19 | 56 | 15 |
| Corn | 3 | 7 | 22 | 63 | 5 |
@USDA and France AgriMer
The condition of all French crops, excluding corn, have moved quite a bit lower 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 | Up $1.00 | 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 | Up $1.00 | x |
| US Gulf Japan: Panamax | $29/30.00 | Up $1.00 | X |
| US Gulf China: Panamax | $27/28.00 | Up $1.00 | x |
| US PNW South Africa | $31/32.00 | Steady | x |
| 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 | Steady | X |
| US East Coast Nigeria: Handisize | $50/51.00 | Up $1.00 | x |
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| France/Germany to Algeria: 30,000 m/t(3,000 disch) | $25/26.00 | Up $1.00 | X |
| France/Germany to Egypt: 50,000 m/t (10,000 disch) | $23/24.00 | Up $1.00 | X |
| France/Germany to Jordan: 35/45,000 m/t (4,000 disch) | $29/30.00 | Up $1.00 | X |
| France/Germany to Morocco: 30,000 m/t (3,000 disch) | $24/25.00 | Up $1.00 | X |
| France/Germany to Saudi Arabia: 50/60,000 | $31/32.00 | Up $1.00 | X |
| France/Germany to South Africa: 30,000 m/t | $32/33.00 | Up $2.00 | X |
| France/Germany to Yemen: 30,000 m/t | $50/51.00 | Up $2.00 | x |
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| Argentina to Algeria: 25/30,000 m/t(3,000 disch) | $29/30.00 | Up $2.00 | 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 | $23/24.00 | Steady | x |
| Argentina to Europe: 50/60,000 m/t | $26/27.00 | Up $1.00 | x |
| Argentina to Morocco: 25/30,000 m/t(3,000 disch) | $27/28.00 | Up $2.00 | x |
| Argentina to Saudi Arabia: 25/30,000 m/t | $45/46.00 | Up $2.00 | x |
| Argentina to South Africa 25/30,000 m/t (3,000 disch) | $27/28.00 | Up $1.00 | x |
| Argentina to Spain: 30,000 m/t | $29/30.00 | Up $1.00 | x |
| Argentina to Tunisia: 25/30,000 m/t (3,000 disch) | $29/30.00 | Up $2.00 | x |
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| Brazil to Algeria: 25/30,000 m/t | $29/30.00 | Up $1.00 | x |
| Brazil to China: 55,000 m/t | $20/21.00 | Up $1.00 | x |
| Brazil to Japan: 55,000 m/t | $22/23.00 | Up $1.00 | x |
| Brazil to Europe: 30,000 m/t | $26/27.00 | Up $1.00 | x |
| Brazil to Morocco: 25/30,000 m/t | $26/27.00 | Up $1.00 | x |
| Brazil to Saudi Arabia 30/40,000 m/t | $40/41.00 | Up $1.00 | x |
| Brazil to Turkey/Egypt: 50,000 m/t | $23/24.00 | Up $1.00 | x |
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| 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 | Up $1.00 | x |
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| Ukraine to China | $21/22.00 | Steady | x |
| Black Sea to East Med: 30,000 m/t (3,000 disch) | $24/25.00 | Up $1.00 | 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 | Steady | 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 | Steady | X |
| Black Sea to Morocco: 30,000 m/t (3,000 disch) | $22/23.00 | Up $1.00 | 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) | $18/19.00 | Up $1.00 | X |
| Black Sea to Saudi Arabia – Jeddah – 50k | $21/22.00 | Up $1.00 | X |
| Black Sea to South Africa – 30,000 m//t | $29/30.00 | Up $1.00 | x |
| Black Sea to Tunisia/Algeria: 30,000(5,000 disch) | $18/19.00 | Up $1.00 | x |
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| Baltic Dry Index | 677 | Up 68 | x |
| Baltic Capesize Index | 1030 | Up 117 | x |
| Baltic Panamax Index | 691 | Up 106 | x |
| Baltic Supramax Index | 627 | Up 44 | x |
| Baltic Handisize Index | 344 | Up 15 | x |
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FOB port or location specified. Prices in US$, 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 184/189 | x |
| Wheat, USA Hard Red Winter 12 protein | USD 187/191 | x |
| Wheat, Ukraine 11.5 pro, 30,000+ m/t | USD 164/169 | X |
| Wheat, Russia 12.5 pro, 30,000+ m/t | USD 172/176 | x |
| Wheat, Romania 12.5 pro | USD 168/172 | x |
| Wheat, Superior, France, Rouen | USD 171/173 | x |
| Wheat, Medium, France, Rouen | USD 168/170 | x |
| Wheat, milling, 12.0%, Argentina, upriver | USD 206/209 | x |
| Wheat, feed, Black Sea | USD 161/165 | x |
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| Barley, France, Rouen port | USD 150/153 | x |
| Barley, feed, Argentina | USD 147/150 | x |
| Barley, feed, Black Sea, 30,000+ | USD 147/150 | x |
| Barley, feed, USA Pacific Northwest | USD 185/190 | x |
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| Corn, FOB NOLA USA | USD 178/183 | x |
| Corn, FOB USA Pacific northwest | USD 175/181 | x |
| Corn, CNF Asia, USA #2 | USD 202/206 | x |
| Corn, FOB Argentina port, upriver | USD 176/180 | x |
| Corn, FOB Brazil port | USD 184/187 | x |
| Corn, FOB Black Sea, 30,000+ m/t | USD 180/183 | x |
| Corn, FOB France | USD 193/196 | x |
| Corn, FOB Romania | USD 181/186 | x |
| Sorghum, FOB Texas | USD 175/178 | x |
| Sorghum, FOB Argentina port | USD 160/165 | x |
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| Soymeal, 48% protein, FOB NOLA | USD 464/468 | X |
| Soymeal, 48% protein, USA, Rotterdam | USD 496/500 | X |
| Soymeal, 46.5 pro, USA CNF Asia | USD 505/509 | x |
| Soymeal, Argentina, Rotterdam | USD 471/474 | x |
| Soymeal, 47% pro, FOB Argentina | USD 444/448 | X |
| Soymeal, 48% protein, Brazil, Rotterdam | USD 469/470 | x |
| Soymeal, FOB Brazil | USD 443/447 | X |
| Soymeal, 48% protein, India FAQ | No offers | X |
| Soybeans, FOB NOLA | USD 443/447 | X |
| Soybeans USA #2, CNF Asia | USD 490>>484 | x |
| Soybeans, Argentina, FOB | USD 449/452 | X |
| Soybeans, Brazil, FOB | USD 473/477 | X |
| Soybeans, Black Sea | USD 460/465 | X |
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| Corn Gluten Meal, USA FOB NOLA | USD 615/625 m/t | x |
| Corn Gluten Meal, USA CNF Asia, cont. | USD 740/745 m/t | X |
| Corn Gluten Meal, CNF Egypt | USD 765/770 m/t | x |
| Corn Gluten Feed, USA FOB NOLA | USD 150/155 m/t | x |
| DDGS corn, 35 profat, USA FOB NOLA | USD 210/215 m/t | x |
| DDGS corn, 35 profat, USA CNF Asia, cont | USD 251>>239 m/t | x |
The USDA monthly grain crushing report was out this week and showed that production of DDGS, corn gluten meal and corn gluten feed were all up a little on last month but all were also down on last year's May numbers. The corn usage for crushing was up by about 7 % on last month but down by 5% on May 2015. For anyone who is interested, the May production numbers are: DDGS 1.8 million m/t, corn gluten meal 88,000 m/t and corn gluten feed 333,000 m/t.
The USDA domestic reports show that DDGS prices in the US were lower on the week – down as much as USD 20 m/t in some parts of the USA. Of course, with corn prices off by about USD 12 m/t, a drop in DDGS is not too surprising.
Corn gluten feed prices were also down in much of the US with an average drop in prices of about USD 6 m/t. Corn gluten meal bucked the trend by not being lower anywhere and perhaps being a little higher depending on the shipment period.
There was a comment in the US Grain Council report this week that the corn being released from stock in China is of poor quality and that Chinese feed mills are increasing their orders for both sorghum and DDGS to blend and improve the feed quality. The USGC also reports that the DDGS price to Asia dropped by about USD 14 m/t this week for August shipment.
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 480/500 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 540/560 m/t CNF Asia USD 500/520 m/t CNF Asia USD 620/640 m/t CNF Asia USD 820/830 m/t CNF Asia |
According to reports in the trade the animal protein business in Asia was very busy this week – perhaps due to the end of Ramadan next week and the few days of Eid al Fitr holidays. At least for now the demand seem to be running ahead of the supply and this has given export prices a good push higher. It seems that prices are higher in Asia for all animal proteins: meat and bone meal, poultry meal and feathermeal.
Another factor supporting the prices is the winter drop in supply from both Australia and New Zealand at exactly the same time as the major buyers – mainly Indonesia – are in the market to cover August/September needs. USA export prices are also up for animal proteins with these increases being strictly export demand driven.
US domestic animal protein prices also moved higher – why not with soymeal up by USD 30 m/t – and some in the trade are saying that prices could be higher except that current supply is good and is stopping prices from running away.
According to the Jacobsen Report "animal proteins are undervalued" but they don't see the stronger prices for animal proteins continuing past August supply.
SECTION 2 --- FISHMEAL COMMENTS AND PRICES: PERUVIAN
The catch in northern Peru has picked up the past few days – probably due to more vessels being out fishing. The total vessel level is now up to about 250 from the previous week's level of about 150 to 170 vessels per day. June 30 was the highest daily catch level so far at just over 42,000 m/t. The total catch up to the end of June is reported to be at about 284,000 m/t, just shy of 16% of the quota.
The southern Peru fishing quota ended on June 30 with just 148,000 m/t of the 382,000 m/t quota landed. However, on July 1st the new quota of 382,000 m/t was established with fishing allowed until December 31.
Looking at the northern Peru fishing, the latest trade reports seem to feel that it will be very difficult to land the full quota before it expires which is leaving both buyers and sellers in a quandary as to what to do. Sellers are wanting to wait a little to see if prices will drop while the producers don't want to sell too much too early in case the fishing tails off.
The trade reports that there has been a little buying interest from Asia but that the bids have been about USD 50 m/t below the current price levels and sellers are not jumping for joy. It has also been noted that China will need to start doing some buying soon to cover needs for later in the year but so far no major Chinese buying interest has been seen.
There has also been quite a bit of mention of the EU/Brexit situation and how it may effect to fishmeal/fishoil business to the EU and the UK. It probably should not affect business to the major buyers in Asia unless financial unrest spreads to that region.
There was quite an informative article on salmon feeding in a trade publication this week. The article pointed out how the percentage of fishmeal in salmon feed has dropped from 60 percent to about 10 percent. And, even at 10 percent, salmon breeders are trying very hard to reduce the fishmeal usage. It seems that one of the problems has been that salmon feed needs to be a high oil feed and vegetable protein do not work quite as well in high oil feeds. Also, since fish know exactly the kind of feed that they like, the fishmeal reduced feed must have all the nutritional and physical characteristics of the fishmeal based feed or the salmon will not eat it. Much like me and peanut butter – I refuse to eat crunchy.
European fishmeal prices – FOB North German port.
| Type | Protein % | Price per m/t USD |
| Herring fishmeal | 72% protein | 1,900 |
| Danish fishmeal | 64% protein | 1,500 |
| Peru fishmeal | 64% protein | 1,600 |
| Chile fishmeal | 67% protein | 1,700 |
| Iceland fishmeal | 70% protein | 1,940 |
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 |
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| 65% protein | 1650/1700 m/t |
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| 65/66 protein | 1670/1690 m/t |
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| 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 |
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| Fish oil, crude bulk | 2200/2250 | 1650/1700 |
| Fish oil, crude drums | 2350/2400 |
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| Fish oil, flexi tank | 2450/2500 |
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| Fish oil, Omega 3: 28%EPA/DHA | 2700/2800 |
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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
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