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SECTION 1: US FEED GRAINS and VEGETABLE AND ANIMAL PROTEIN
Once again this week the talk is about record supplies, mountains of grain, exports from everywhere and record crops in almost every country in the world --- while I am exaggerating there is certainly a lot of news that is bearish for prices. Only the France grain crops seem to be in serious question with the wheat problems well know and now seeming to be spreading to corn. As a resident of the South of France, I can tell you that the rainfall is very limited but then, as I remember, it is limited every summer – that is why we live here.
So, what happened this week: corn futures dropped by about USD 7 to 9 m/t, soybeans were down by about USD 13 m/t, soymeal down by around USD 10 m/t with most US wheat down by as much as USD 13 m/t. There just seems to be very little in the market to stop prices from moving lower.
Experts say that US corn prices were a little lower due to poorer export sales than expected with few buyers for old crop corn as everyone seems to be looking a little further out for shipments.
We are almost at the start of the corn harvest in parts of the US and all the long term weather looks very good for finishing the crop and bringing in the harvest. There is currently nothing in the weather that would tend to push US corn prices higher. However, there have some rumbles that the corn yields may not be quite as good as the USDA has been forecasting and this type of story, if accurate, could stop further price weakness for corn.
For soybeans, export sales seem to have gone a little quiet as everyone was expecting strong new sales every week – looks like we are in a bit of an export sales lull.
The forecasts for soybean yields, based on the recent "Pro Farmer Tour", are said to be even higher than those forecasted by the USDA and, again if so, this would tend to move prices lower.
As with corn, everything looks great for soybeans, at least until the next USDA report on the 12th of September.
Crop condition --- USA and France
| Condition USA Aug 16, 2016 | Very poor | Poor | Fair | Good | Excellent |
| Corn | 2 | 5 | 18 | 54 | 21 |
| Soybeans | 2 | 5 | 21 | 54 | 18 |
| Sorghum | 1 | 6 | 28 | 52 | 13 |
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| Condition France Aug 15, 2016 | Very poor | Poor | Fair | Good | Excellent |
| Wheat | 12 | 26 | 30 | 29 | 4 |
| Winter barley | 6 | 22 | 31 | 37 | 5 |
| Durum wheat | 16 | 13 | 21 | 40 | 9 |
| Spring barley | 5 | 24 | 32 | 36 | 3 |
| Corn | 3 | 10 | 24 | 56 | 7 |
@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) | $15/15.50 | Steady | x |
| US Gulf to Spain: 30,000 m/t (5,000 disch) | $22/23.00 | Up $1.00 | x |
| US Gulf Israel: 50,000 MT | $21/22.00 | Up $1.00 | x |
| US Gulf to Egypt: Panamax(6,000 disch) | $20/21.00 | Up $1.00 | x |
| US Gulf Turkey: 50,000 | $22/23.00 | Up $1.00 | x |
| US Gulf Morocco: 30,000(5,000 disch) | $33/34.00 | Steady | x |
| US Gulf Nigeria: 30,000 m/t | $48/49.00 | Steady | x |
| US Gulf other Med: 30,000 MT(5,000 disch) | $33/34.00 | Steady | x |
| US Gulf Japan: Panamax | $29/30.00 | Steady | x |
| US Gulf China: Panamax | $27/28.00 | Steady | x |
| US PNW South Africa | $30/31.00 | Up $1.00 | x |
| US PNW Japan: Panamax | $16/17.00 | Up $1.00 | X |
| US PNW China: Panamax | $15/16.00 | Up $1.00 | x |
| US East Coast Egypt: Panamax | $43/44.00 | Steady | x |
| US East Coast Nigeria: Handisize | $48/49.00 | Steady | x |
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| 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) | $24/25.00 | Steady | X |
| France/Germany to Jordan: 35/45,000 m/t (4,000 disch) | $32/33.00 | 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 | $34/35.00 | Steady | X |
| France/Germany to South Africa: 30,000 m/t | $34/35.00 | Steady | x |
| France/Germany to Yemen: 30,000 m/t | $52/53.00 | Steady | X |
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| Argentina to Algeria: 25/30,000 m/t(3,000 disch) | $26/27.00 | Steady | 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 | $29/30.00 | Down $1.00 | x |
| Argentina to Egypt: 50,000 m/t | $23/24.00 | Up $1.00 | 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) | $25/26.00 | Down $2.00 | x |
| Argentina to Saudi Arabia: 25/30,000 m/t | $41/42.00 | Steady | x |
| Argentina to South Africa 25/30,000 m/t (3,000 disch) | $25/26.00 | Steady | x |
| Argentina to Spain: 30,000 m/t | $27/28.00 | Steady | x |
| Argentina to Tunisia: 25/30,000 m/t (3,000 disch) | $26/27.00 | Steady | x |
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| Brazil to Algeria: 25/30,000 m/t | $27/28.00 | Steady | 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 | $25/26.00 | Steady | x |
| Brazil to Morocco: 25/30,000 m/t | $23/24.00 | Steady | x |
| Brazil to Saudi Arabia 30/40,000 m/t | $38/39.00 | Up $1.00 | x |
| Brazil to Turkey/Egypt: 50,000 m/t | $24/25.00 | Up $1.00 | x |
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| Australia to China: 40-55,000 m/t – round trip | $19.50/20.00 | Up $0.50 | 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 |
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| Ukraine to China | $24/25.00 | Up $1.00 | x |
| Black Sea to East Med: 30,000 m/t (3,000 disch) | $26/27.00 | Steady | X |
| Ukraine to East Med: coaster (1,000 disch) | $25/26.00 | Steady | X |
| Black Sea to Egypt: 40/50,000 m/t – (6,000 disch) | $10.50/11.50 | Up $1.00 | X |
| Black Sea to Egypt: 30,000 m/t | $13/14.00 | Up $1.00 | X |
| Ukraine to Egypt: coaster 3,000 m/t (1,000 disch) | $25/26.00 | Steady | X |
| Black Sea to Iraq: 50,000 m/t (4,000 disch) | $27/28.00 | 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) | $15/16.00 | Steady | X |
| Black Sea to Jordan: 50,000 m/t (4,000 disch) | $18/19.00 | Steady | X |
| Black Sea to Saudi Arabia – Jeddah – 50k | $23/24.00 | Steady | X |
| Black Sea to South Africa – 30,000 m//t | $31/32.00 | Up $1.00 | X |
| Black Sea to Tunisia/Algeria: 30,000(5,000 disch) | $17/18.00 | Up $1.00 | X |
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| Baltic Dry Index | 720 | Up 37 | x |
| Baltic Capesize Index | 1001 | Up 158 | x |
| Baltic Panamax Index | 687 | Down 40 | x |
| Baltic Supramax Index | 715 | Up 29 | x |
| Baltic Handisize Index | 431 | Up 19 | x |
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FOB port or location specified. Prices in US$, in metric tons:
All shipments in bulk grain vessels unless stated otherwise
(NOLA is New Orleans, Louisiana, USA.)
ALL PRICES ARE FOR September/November 2016
| Wheat, USA Soft Red Winter, NOLA | USD 183/190 | x |
| Wheat, USA Hard Red Winter 12 protein | USD 189/200 | x |
| Wheat, Ukraine 11.5 pro, 30,000+ m/t | USD 162/166 | x |
| Wheat, Russia 12.5 pro, 30,000+ m/t | USD 170/173 | x |
| Wheat, Romania 12.5 pro | USD 173/176 | x |
| Wheat, Superior, France, Rouen | USD 185/187 | x |
| Wheat, Medium, France, Rouen | USD 185/187 | X |
| Wheat, milling, 12.0%, Argentina, upriver | USD 202/206 | x |
| Wheat, feed, Black Sea | USD 159/163 | x |
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| Barley, France, Rouen port | USD 154/157 | x |
| Barley, feed, Argentina | USD 153/157 | x |
| Barley, feed, Black Sea, 30,000+ | USD 152/156 | x |
| Barley, feed, USA Pacific Northwest | USD 175/180 | x |
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| Corn, FOB NOLA USA | USD 163/167 | x |
| Corn, FOB USA Pacific northwest | USD 183/185 | x |
| Corn, FOB Argentina port, upriver | USD 182/186 | x |
| Corn, FOB Brazil port | USD 190/193 | x |
| Corn, FOB Black Sea, 30,000+ m/t | USD 179/184 | x |
| Corn, FOB France | USD 183/186 | x |
| Corn, FOB Romania | USD 179/182 | x |
| Sorghum, FOB NOLA | USD 174/176 | x |
| Sorghum, FOB Argentina port | USD 155/160 | x |
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| Soymeal, 48% protein, FOB NOLA | USD 384/387 | x |
| Soymeal, 48% protein, USA, Rotterdam | USD 409/412 | x |
| Soymeal, Argentina, Rotterdam | USD 394/399 | x |
| Soymeal, 47% pro, FOB Argentina | USD 366/369 | x |
| Soymeal, 48% protein, Brazil, Rotterdam | USD 391/396 | x |
| Soymeal, FOB Brazil | USD 366/371 | x |
| Soymeal, 48% protein, India FAQ | USD 540/550 | x |
| Soybeans, FOB NOLA | USD 396/400 | x |
| Soybeans, Argentina, FOB | USD 413/417 | X |
| Soybeans, Brazil, FOB | USD 420/424 | x |
| Soybeans, Black Sea | USD 420/430 | x |
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| Corn Gluten Meal, USA FOB NOLA | USD 620/630 m/t | x |
| Corn Gluten Meal, CNF Egypt | USD 665/670 m/t | x |
| Corn Gluten Feed, USA FOB NOLA | USD 155/159 m/t | X |
| DDGS corn, 35 profat, USA FOB NOLA | USD 189/193 m/t | x |
According to a comment from the US Grains Council this week the exports of DDGS could reach close to a new record level getting close to 12 million m/t. They also point out that while there is near record production of ethanol, which means more DDGS, there has been little or no downward pressure on DDGS prices. DDGS export prices into the major markets in Asia are up by at least a dollar or two per m/t this week.
It is also noteworthy that just under 94,000 m/t of DDGS was imported by the UK and Ireland this week. I am not too sure if this is the highest import week on record but it is certainly scads of DDGS. While we are only eight weeks into the reporting year for the EU, the DDGS imports are up by 500+% over last year. Certainly this large level of imports won't happen every week is certainly supportive for DDGS exports to the EU.
Corn gluten meal prices slipped lower again this week and seemed to have dropped about USD 20 m/t for export and between USD 15 and 20 in the domestic US market. With vegetable protein prices all lower it is almost impossible for CGM to remain high priced.
Interestingly, almost nothing happened to corn gluten feed prices. Some exporters were calling prices a little lower but in general CGF prices were unchanged on the 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 460/470 m/t CNF Asia USD 560/570 m/t CNF Asia USD 460/470 m/t CNF Asia |
| Paraguay Meat &Bone meal, 45% protein | USD 410/420 m/t CNF Asia |
| Australian MBM 45 protein Australian MBM 50 protein Australian Feathermeal, 80 protein Australian Poultry Meal, pet food | USD 470/490 m/t CNF Asia USD 520/540 m/t CNF Asia USD 550/560 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 500/520 m/t CNF Asia USD 550/580 m/t CNF Asia USD 660/670 m/t CNF Asia USD 780/800 m/t CNF Asia |
Export meat and bone meal prices into Asia are off this week by at least USD 10 m/t – at least for USA material. With meat and bone meal from South America selling at lower prices than that seen from the USA, OZ and NZ this, it is said is causing some pressure on prices. Not every country will accept South American MBM but the list of those that will seems to be expanding.
It was mentioned in the Jacobsen report this week that some countries are seeing EU origin MBM being smuggled into the country at prices far below what is seen for OZ/NZ product. The Australian cattle slaughter is at a seasonally low level which is trying to push MBM prices higher but most buyers in the international market have no interest in higher prices. While domestic buyers in Australia may have to pay more export buyers just source elsewhere.
USA prices continue week for animal protein and it is very difficult to find an expert who will even talk about higher prices. It looks like, for now, very good supply and low cost alternatives will keep most animal protein prices down.
SECTION 2 --- FISHMEAL COMMENTS AND PRICES: PERUVIAN
It is always difficult to find something to report in weeks between the fishing seasons and this time is no different. The Peru government did send out a Research vessel to look at the biomass situation – probably the first research cruise of several in the coming weeks. MSI Ceres says that results from all the various biomass investigations should be submitted in mid-October so that the next quota can be set.
There are reports out of Peru that China was a reasonable buyer of available inventory but that producers had to lower their prices to get some Chinese interest. Unsold fishmeal stocks on hand in Peru could be as low as 20,000 m/t --- not very much.
Buyers will probably find it very difficult to locate supply from Peru in coming weeks as stocks get thin and particular grades of fishmeal become sold out.
According to the latest trade figures, Peru ships just under 41% of China's fishmeal imports while China is 70% of Peru's export business. Asian origins – Vietnam and Thailand – are now close to 22% of China's fishmeal imports. As we all know China is the largest importer of fishmeal with imports of just over 600,000 m/t January to July 2016.
As to prices from Peru – they should move higher as supplies get smaller but, with so many other protein alternatives available these days, fishmeal may have to stay at a reasonable price level in order to compete.
European fishmeal prices – FOB North German port.
| Type | Protein % | Price per m/t USD | Cost per protein unit |
| Herring fishmeal | 72% protein | 1,900 | 26.39 |
| Danish fishmeal | 64% protein | 1,540 | 24.06 |
| Peru fishmeal | 64% protein | 1,655 | 25.85 |
| Chile fishmeal | 67% protein | 1,750 | 26.11 |
| Iceland fishmeal | 70% protein | 1,920 | 27.42 |
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 | 1510/1520 m/t |
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| 65/66 protein | 1530/1540 m/t |
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| 67% protein standard steam | 1560/1570 m/t | No offers |
| 67% protein 150 TVN | 1610/1620 m/t | 1620/1640 |
| 67% protein 120 TVN | 1670/1680 m/t | 1670/1680 |
| 67% protein 1000 hist, 120 TVN | 1700/1720 m/t | 1700/1720 |
| 68% protein 500 hist, 120 TVN | 1750/1800 m/t | 1750/1800 |
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| Fish oil, crude bulk | 2100/2150 | 1650/1700 |
| Fish oil, crude drums | 2250/2300 |
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| Fish oil, flexi tank | 2350/2400 |
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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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