Weekly report - July 23, 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 here we are at the end of another week of lower prices – except for wheat. Corn prices in both cash and futures were lower by about USD 6 to 7 m/t with soybeans down by USD 25 or so m/t and soymeal at about the same level – down USD 20 to 25 m/t. Overall, US wheat prices were quite steady – perhaps helped a little by increased prices in Europe.

 

Although corn prices were down on the week in the US there is some concern over the hot, dry weather that is expected for the next couple of weeks. This weather concern is probably one of the reasons why corn prices did not drop as far down as soybeans. Of course, there was also the trucking strike in Argentina that is slowing their corn exports and making the US look even more attractive for export corn buyers. Reading the trade reports at the end of the week it looks like most experts don't feel that the hot, dry weather will have any serious effect on the corn crop. Experts say that the 30 day forecasts look just great and that we may still see amazing crops.

 

As to soybeans, the improvement in long term weather for the soybean crop has helped push soybean prices lower and lower and lower. But, some experts are saying that there is not too much chance for prices to go lower – well, at least not too much lower.

 

The future market saw quite a few folks with long positions getting out or going short and this may have made the drop this week go even further than perhaps it should have.

 

So for beans and meal it looks like a combination of very good weather for the next 30 days or so coupled with the futures market switching from long to short (at least for the moment) is making soybeans and soymeal look like the weakest commodities in the market.

 

Monday's USDA crop conditions report will show if there has been any adverse effects from the recent hot weather but most experts don't seem to be expecting any problems.

 

As mentioned above, wheat prices are a little higher with most of this due to the rally in wheat prices in Europe brought on by the continued drop in the condition of French wheat. Also, if a big chunk of the French wheat crop becomes feed wheat then we could see a significant drop in EU corn imports – imports that exceeded 13 million m/t in the last crop year.

 

 

Crop condition --- USA and France

 

Condition USA July 19, 2016	Very poor	Poor	Fair	Good	Excellent
Spring wheat	2	5	24	58	11
Barley	1	3	23	58	15
Corn	1	4	19	57	19
Soybeans	2	5	22	57	14
Sorghum	0	3	29	57	11
Condition France July 18, 2016	Very poor	Poor	Fair	Good	Excellent
Wheat	6	20	33	38	4
Winter barley	6	21	31	37	5
Durum wheat	14	14	22	41	9
Spring barley	1	13	26	51	9
Corn	3	6	22	62	7

@USDA and France AgriMer

 

France wheat and barley conditions continue to fall lower pushing EU wheat prices higher. Just over 50% of the wheat harvest is completed so condition could change. France barley harvest is 98% completed and durum wheat 95% done.

 

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

 

US Gulf to Europe: 60/70,000 (10,000 disch)	$15/16.00	Steady	X
US Gulf to Spain: 30,000 m/t (5,000 disch)	$21/22.00	Steady	x
US Gulf Israel: 50,000 MT	$19/20.00	Down $1.00	X
US Gulf to Egypt: Panamax(6,000 disch)	$18/19.00	Down $1.00	X
US Gulf Turkey: 50,000	$20/21.00	Down $1.00	X
US Gulf Morocco: 30,000(5,000 disch)	$33/34.00	Down $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)	$32/33.00	Down $1.00	X
US Gulf Japan: Panamax	$27/28.00	Steady	X
US Gulf China: Panamax	$25/26.00	Steady	X
US PNW South Africa	$31/32.00	Steady	x
US PNW Japan: Panamax	$16/17.00	Steady	x
US PNW China: Panamax	$15/16.00	Steady	x
US East Coast Egypt: Panamax	$42/43.00	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)	$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)	$30/31.00	Up $1.00	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	$33/34.00	Steady	X
France/Germany to South Africa: 30,000 m/t	$32/33.00	Steady	x
France/Germany to Yemen: 30,000 m/t	$51/52.00	Up $1.00	X
Argentina to Algeria: 25/30,000 m/t(3,000 disch)	$28/29.00	Down $1.00	X
Argentina to China: 50,000 m/t, with top-off	$27/28.00	Down $1.00	X
Argentina to Japan: 50,000 m/t, with top-off	$30/31.00	Steady	X
Argentina to Egypt: 50,000 m/t	$20/21.00	Down $1.00	X
Argentina to Europe: 50/60,000 m/t	$25/26.00	Down $1.00	X
Argentina to Morocco: 25/30,000 m/t(3,000 disch)	$26/27.00	Down $1.00	X
Argentina to Saudi Arabia: 25/30,000 m/t	$43/44.00	Down $1.00	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)	$28/29.00	Down $1.00	x
Brazil to Algeria: 25/30,000 m/t	$29/30.00	Steady	X
Brazil to China: 55,000 m/t	$19/20.00	Steady	X
Brazil to Japan: 55,000 m/t	$21/22.00	Steady	X
Brazil to Europe: 30,000 m/t	$25/26.00	Down $1.00	X
Brazil to Morocco: 25/30,000 m/t	$25/26.00	Steady	X
Brazil to Saudi Arabia 30/40,000 m/t	$38/39.00	Down $1.00	X
Brazil to Turkey/Egypt: 50,000 m/t	$20/21.00	Down $1.00	X
Australia to China: 40-55,000 m/t – round trip	$19/19.50	Steady	x
Australia to Japan: 40-55,000 m/t – round trip	$19.50/20.00	Steady	x
Australia to Saudi Arabia: 40-55,000 m/t	$23/24.00	Steady	x
Ukraine to China	$22/23.00	Steady	X
Black Sea to East Med: 30,000 m/t  (3,000 disch)	$25/26.00	Steady	X
Ukraine to East Med: coaster (1,000 disch)	$26/27.00	Up $2.00	X
Black Sea to Egypt: 40/50,000 m/t – (6,000 disch)	$10.50/11.50	Up $1.00	X
Ukraine to Egypt: coaster 3,000 m/t (1,000 disch)	$26/27.00	Up $2.00	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)	$23/24.00	Up $1.00	X
Black Sea to Spain: 40/50,000 m/t (8,000 disch)	$14/15.00	Up $1.00	X
Black Sea to Jordan: 50,000 m/t (4,000 disch)	$17/18.00	Steady	X
Black Sea to Saudi Arabia – Jeddah – 50k	$22/23.00	Steady	X
Black Sea to South Africa – 30,000 m//t	$30/31.00	Steady	X
Black Sea to Tunisia/Algeria: 30,000(5,000 disch)	$18/19.00	Up $1.00	X
Baltic Dry Index	718	Down 27	x
Baltic Capesize Index	895	Down 128	x
Baltic Panamax Index	827	Down 36	x
Baltic Supramax Index	698	Up 5	x
Baltic Handisize Index	383	Up 20	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 August/October 2016

 

Wheat, USA Soft Red Winter, NOLA	USD 187/198	x
Wheat, USA Hard Red Winter 12 protein	USD 198/208	x
Wheat, Ukraine 11.5 pro, 30,000+ m/t	USD 158/162	X
Wheat, Russia 12.5 pro, 30,000+ m/t	USD 160/164	X
Wheat, Romania 12.5 pro	USD 164/167	X
Wheat, Superior, France, Rouen	USD 187/189	x
Wheat, Medium, France, Rouen	USD 186/188	x
Wheat, milling, 12.0%, Argentina, upriver	USD 208/210	x
Wheat, feed, Black Sea	USD 152/156	X
Barley, France, Rouen port	USD 157/159	X
Barley, feed, Argentina	USD 147/150	x
Barley, feed, Black Sea, 30,000+	USD 144/148	x
Barley, feed, USA Pacific Northwest	USD 175/180	x
Corn, FOB NOLA USA	USD 174/177	x
Corn, FOB USA Pacific northwest	USD 179/182	x
Corn, FOB Argentina port, upriver	USD 173/177	x
Corn, FOB Brazil port	USD 180/184	x
Corn, FOB Black Sea, 30,000+ m/t	USD 171/176	x
Corn, FOB France	USD 190/193	x
Corn, FOB Romania	USD 173/176	x
Sorghum, FOB Texas	USD 170/175	x
Sorghum, FOB Argentina port	USD 150/155	x
Soymeal, 48% protein, FOB NOLA	USD 410/414	x
Soymeal, 48% protein, USA, Rotterdam	USD 435/439	X
Soymeal, Argentina, Rotterdam	USD 423/426	x
Soymeal, 47% pro, FOB Argentina	USD 389/392	X
Soymeal, 48% protein, Brazil, Rotterdam	USD 424/428	X
Soymeal, FOB Brazil	USD 399/403	x
Soymeal, 48% protein, India FAQ	No offers	x
Soybeans, FOB NOLA	USD 406/410	x
Soybeans, Argentina, FOB	USD 400/405	x
Soybeans, Brazil, FOB	USD 425/430	X
Soybeans, Black Sea	USD 430/435	x
Corn Gluten Meal, USA FOB NOLA	USD  675/680 m/t	x
Corn Gluten Meal, CNF Egypt	USD  730/735 m/t	x
Corn Gluten Feed, USA FOB NOLA	USD  155/160 m/t	x
DDGS corn, 35 profat, USA FOB NOLA	USD  204>>193 m/t	x

 

USA DDGS prices were down quite strongly in some parts of the USA --- reported to be as much as USD 20 m/t but closer to USD 10 m/t on average. DDGS export prices are lower by at least USD 10 m/t as one gets into September/October. Most of the export buyer seen in the market these days are buying for October/December shipment – after the harvest when prices should be at their lowest.

 

Depending on which exporter you talk to the corn gluten feed prices are down by as much as USD 10 m/t but probably more like USD 5 m/t lower on average. As usual CGF is following corn prices lower and with corn down by USD 6-7 m/t it is easy to see CGF slipping a little lower next week.

 

Corn gluten meal prices were down by as much as USD 20 m/t but the average drop is probably closer to USD 10 m/t. However, there are a couple of exporters who say that CGM prices are steady as most export positions are sold out and buyers are going to have to look at late September for the first availability. For CGM, if fishmeal prices start to rally, as could happen, we could see export buyers switch as much as possible from fishmeal to CGM, which would stop any price weakness.  

 

 

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 490/500 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 510/520 m/t CNF Asia  USD 570/580 m/t CNF Asia  USD 540/560 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 580/600 m/t CNF Asia  USD 575/585 m/t CNF Asia  USD 660/670 m/t CNF Asia  USD 810/820 m/t CNF Asia

 

Export demand for US animal proteins is quite strong at present with lots of buyers from South East Asia seen in the market. Even with much lower soymeal prices on the week, demand buying is keeping prices firm or higher. The trade reports that there is quite a wide spread in CNF prices in to Asia with some saying that prices into Indonesia are about USD 20/30 higher than the indications shown above.

 

Animal protein supply is quite tight from Australia and New Zealand, so this tight supply combined with strong demand is keeping prices firm. However, traders are saying that any continued weakness in soymeal prices should bring meat and bone meal prices down.    

 

The Jacobsen Report this week points out that, while soymeal prices have dropped by 12.5% in the past month, the price for MBM into Indonesia is up by 12.5%. One can probably assume that there is a risk of price weakness for MBM into Asian markets. However, they also point out that there is a continuing switch from animal protein to vegetable protein in feed formulations and that this too should help weaken prices.

 

 

SECTION 2 --- FISHMEAL COMMENTS AND PRICES: PERUVIAN

 

The latest catch numbers from Peru show that we are up to about 820,000 m/t – 46% of the total quota, this represents about 215,000 m/t of fishmeal to date. However, the main question in Peru is how long will the fishing be able to continue or be allowed to continue.

 

Word from Peru is that fishing in some of the Peru coast may be stopped due to the high level of spawning but there has been no official ruling as yet.

 

According to trade reports, the catch has been producing a higher level of prime and super prime than had been expected.

 

The trade also reports that the spawning and the risk of a short fishing season is pushing prices a little higher. There has been quite a bit of buying interest in the market but, as reported last week, buyers want lower prices while sellers are looking at steady to higher prices.

 

If there is a sudden end to fishing you can expect a jump in prices as China will probably be in the market like gangbusters ("like gangbusters" is derived from and old US radio program).

 

It is also reported that much of the fishmeal production so far may have been sold in pre-season business and that there may not be much current supply left unsold. If correct, this could mean that there will be very little Peruvian fishmeal available over the next few months.

 

So, supply, demand and prices are all going to depend on what happens in the next couple of weeks in Peru.

 

Also, Peru will have national holidays July 27 to 29.

 

And a closing note on fishmeal: China takes about 70% of Peru's fishmeal exports while Peru represents about 46% of China's total fishmeal imports – per MSI Ceres.

 

 

European fishmeal prices – FOB North German port.

 

Type	Protein %	Price per m/t USD
Herring fishmeal	72% protein	1,820
Danish fishmeal	64% protein	1,500
Peru fishmeal	64% protein	1,620
Chile fishmeal	67% protein	1,720
Iceland fishmeal	70% protein	1,910

 

 

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	1530/1550 m/t
65/66 protein	1560/1570 m/t
67% protein standard steam	1580/1600 m/t	No offers
67% protein 150 TVN	1610/1630 m/t	No offers
67% protein 120 TVN	1640/1660 m/t	1650/1670
67% protein 1000 hist, 120 TVN	1680/1700 m/t	1730/1740
68% protein 500 hist, 120 TVN	1730/1750 m/t	1750/1760
Fish oil, crude bulk	2100/2150	1650/1700
Fish oil, crude drums	2250/2300
Fish oil, flexi tank	2350/2400
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