Weekly Report Sep 24, 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

 

The US grain markets seem to have had a very quiet week last week with very little happening to most grain markets during the week. Looking at the cash and futures prices both corn and soybeans tended to be lower on the week while US wheat prices were steady or a little higher. Other than the drop in soybean/soymeal futures prices on Friday, there was not a great deal of excitement in the market.

 

The Friday drop in soybeans/soymeal seems to be as a result of the new Chinese tariff on DDGS which experts see as possibly causing lower DDGS prices and a switch in soymeal users to DDGS if the DDGS prices get more competitive. There is also quite bit of downward pressure on soybeans due to reports that farmers are aggressive sellers of beans, since the crop just looks to get bigger and bigger.

 

Corn prices did little or nothing this week as it was up a little and down a little then finished the week about where the previous week has finished. At least for this week there was not much news to push corn prices in any direction.

 

The harvest weather for much of the corn area looks to be improving and farmers will be out in the fields harvesting at their normal amazing daily rates.

 

Other than the DDGS/China situation there was very little in the market this week that could push corn prices in any direction.

 

For next week, the experts seem to be looking for the same quiet corn market with little reason to do anything. However, a serious change in the weather than could slow the harvest could push prices higher but right now the weather doesn't look all that serious.

        

 

Crop condition --- USA and France

 

Condition USA Sep 19, 2016	Very poor	Poor	Fair	Good	Excellent
Corn	2	5	19	54	20
Soybeans	2	5	20	54	19
Sorghum	1	5	28	52	14
Harvested	Sep 19 2016	Five year average
Corn	9%	12%
Soybeans	4%	5%
Sorghum	29%	29%
Spring Wheat	98%	93%
Barley	95%	92%
Winter wheat planted	17%	16%
Condition France Sep 19, 2016	Very poor	Poor	Fair	Good	Excellent
Corn	7	14	25	47	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)	$16.00/16.50	Up $0.50	X
US Gulf to Spain: 30,000 m/t (5,000 disch)	$22/23.00	Steady	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)	$27/28.00	Adjusted	X
US Gulf Nigeria: 30,000 m/t	$50/51.00	Steady	X
US Gulf other Med: 30,000 MT(5,000 disch)	$32/33.00	Steady	X
US Gulf Japan: Panamax	$29/30.00	Up $1.00	X
US Gulf China: Panamax	$28/29.00	Up $2.00	X
US PNW South Africa – 40,000 m/t	$36/37.00	Up $1.00	X
US PNW Japan: Panamax	$16/17.00	Steady	X
US PNW China: Panamax	$15/16.00	Steady	X
US East Coast Egypt: Panamax	$43/44.00	Steady	X
US East Coast Nigeria: Handisize	$48/49.00	Steady	x
France/Germany to Algeria: 30,000 m/t(3,000 disch)	$26/27.00	Up $1.00	X
France/Germany to Egypt: 50,000 m/t (10,000 disch)	$25/26.00	Up $1.00	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	Up $1.00	X
France/Germany to Saudi Arabia: 50/60,000	$35/36.00	Up $1.00	X
France/Germany to South Africa: 30,000 m/t	$35/36.00	Up $1.00	x
France/Germany to Yemen: 30,000 m/t	$52/53.00	Up $1.00	X
Argentina to Algeria: 25/30,000 m/t(3,000 disch)	$27/28.00	Up $1.00	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	Steady	X
Argentina to Morocco: 25/30,000 m/t(3,000 disch)	$26/27.00	Up $1.00	X
Argentina to Saudi Arabia: 25/30,000 m/t	$43/44.00	Steady	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	$27/28.00	Steady	X
Argentina to Tunisia: 25/30,000 m/t (3,000 disch)	$27/28.00	Up $1.00	X
Brazil to Algeria: 25/30,000 m/t	$28/29.00	Up $1.00	X
Brazil to China: 55,000 m/t	$22/23.00	Steady	X
Brazil to Japan: 55,000 m/t	$24/25.00	Steady	x
Brazil to Europe: 30,000 m/t	$25/26.00	Up $1.00	X
Brazil to Morocco: 25/30,000 m/t	$24/25.00	Up $1.00	X
Brazil to Saudi Arabia 30/40,000 m/t	$37/38.00	Steady	X
Brazil to Turkey/Egypt: 50,000 m/t	$23/24.00	Down $1.00	X
Australia to China: 40-55,000 m/t – round trip	$19.00/19.50	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	$26/27.00	Steady
Black Sea to East Med: 30,000 m/t  (3,000 disch)	$26/27.00	Up $1.00	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)	$10/11.00	Steady	X
Black Sea to Egypt: 30,000 m/t	$11/12.00	Steady	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	$30/31.00	Up $1.00	X
Black Sea to Tunisia/Algeria: 30,000(5,000 disch)	$17/18.00	Up $1.00	X
Baltic Dry Index	941	Up 141	x
Baltic Capesize Index	2383	Up 703	X
Baltic Panamax Index	722	Up 76	x
Baltic Supramax Index	671	Up 11	x
Baltic Handisize Index	421	Up 6	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 October/December 2016

 

Wheat, USA Soft Red Winter, NOLA	USD 187/190	x
Wheat, USA Hard Red Winter 12 protein	USD 195/198	x
Wheat, Ukraine 11.5 pro, 30,000+ m/t	USD 159/161	X
Wheat, Russia 12.5 pro, 30,000+ m/t	USD 165/169	X
Wheat, Romania 12.5 pro	USD 170/173	X
Wheat, Superior, France, Rouen	USD 186/188	x
Wheat, Medium, France, Rouen	No prices
Wheat, milling, 12.0%, Argentina, upriver	USD 188/192	X
Wheat, feed, Black Sea	USD 153/157	x
Barley, France, Rouen port	USD 154/156	X
Barley, feed, Argentina	USD 159/162	X
Barley, feed, Black Sea, 30,000+	USD 149/152	X
Barley, feed, USA Pacific Northwest	USD 178/182	X
Corn, FOB NOLA USA	USD 162/165	x
Corn, FOB USA Pacific northwest	USD 182/185	x
Corn, FOB Argentina port, upriver	USD 172/174	X
Corn, FOB Brazil port	USD 191/193	X
Corn, FOB Black Sea, 30,000+ m/t	USD 161/164	X
Corn, FOB France	USD 178/184	x
Corn, FOB Romania	USD 164/168	X
Sorghum, FOB Texas	USD 175>>169	x
Sorghum, FOB Argentina port	USD 162/166	X
Soymeal, 48% protein, FOB NOLA	USD 367/370	X
Soymeal, 48% protein, USA, Rotterdam	USD 392/395	X
Soymeal, Argentina, Rotterdam	USD 369/373	X
Soymeal, 47% pro, FOB Argentina	USD 343/347	X
Soymeal, 48% protein, Brazil, Rotterdam	USD 368/372	X
Soymeal, FOB Brazil	USD 335/339	X
Soymeal, 48% protein, India FAQ	USD 530/535	X
Soybeans, FOB NOLA	USD 397/400	X
Soybeans, Argentina, FOB	USD 398/402	X
Soybeans, Brazil, FOB	USD 405/409	X
Soybeans, Black Sea	USD 388/392	X
Corn Gluten Meal, USA FOB NOLA	USD  550/560 m/t	x
Corn Gluten Meal, CNF Egypt	USD  630/640 m/t	x
Corn Gluten Feed, USA FOB NOLA	USD  140/145 m/t	x
DDGS corn, 35 profat, USA FOB NOLA	USD  179/183 m/t	x

 

The big news in vegetable protein items this week is the action by China of adding a 33.8% duty on the import of DDGS. China is the largest importer of US DDGS, importing 1.7 million m/t of DDGS from the US in the first seven months of 2016. While China's imports of DDGS are down by about 60 percent so far in 2016 a further drop in imports would certainly put pressure on the US export and domestic prices for DDGS and could also put pressure on soymeal prices as feed producers could switch from soymeal to lower priced DDGS, assuming DDGS prices drop.

 

Lower DDGS prices will probably not affect corn gluten meal prices as the end-use for CGM is not the same as for DDGS but there is some possibility that corn gluten feed prices may soften.

 

It is interesting to note that many experts say that the profits of ethanol producers, DDGS being a by-product of ethanol production, will probably not be seriously affected as the margins on ethanol are currently very good and ethanol is a greater share of the production output compared to DDGS.

 

However, depending on how far China's DDGS imports may drop there could be an offsetting increase in the exports to other DDGS importing countries. It should be noted that, while China's imports are down by 2.6 million m/t this year, increased exports to other markets offset 1.8 million m/t of China's drop in imports. Lower DDGS prices could certainly increase exports to other markets along with increased domestic use.

 

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 420/440 m/t CNF Asia  USD 530/540 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 425/435 m/t CNF Asia  USD 470/480 m/t CNF Asia  USD 520/530 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 460/480 m/t CNF Asia  USD 500/520 m/t CNF Asia  USD 580/600 m/t CNF Asia  USD 780/800 m/t CNF Asia

 

Protein prices are slipping lower these days for all proteins and animal protein items are no different. Major buyers in Asia have been bidding below the market and these days it seems that some sellers are willing to look seriously at the low bids. According to the Jacobsen report, prices for OZ and NZ meat and bone meal are still higher than for US MBM but much of this is due to the quick turn-around for shipment compared to the US.  It is not possible to find an expert who is calling for prices to increase in the near terms --- just too much pressure on protein prices to move lower.

 

US domestic prices are also moving lower due to very high supply levels and lower prices for other protein alternatives and this is causing export prices to follow. Looking out for the next few weeks there doesn't seem to be any good reason to expect a serious rally in animal protein prices. The trend is to lower prices and for now this will continue.

 

 

SECTION 2 --- FISHMEAL COMMENTS AND PRICES: PERUVIAN

 

All is quiet in Peru this week as there is nothing on hand left to sell and producers have backed off a little in booking new season fishmeal sales. Fishmeal market reports mention that most buyers are looking for further weakness in prices as everyone seems to feel that the next quota will be quite large and fishmeal supplies will be very good.

 

China estimates that their fishmeal imports for 2016 will be just below 1 million m/t with about 400,000 m/t of that coming from Peru. Peru has shipped close to 300,000 m/t of fishmeal to China in the first eight months of 2016, so if estimates are correct their will only be another 100,000 m/t or so from Peru in 2016. Of course, much of the next season production will not be shipped until December or into 2017 – it depends on when the fishing actually starts.

 

At present, there doesn't seem to be any good reason for the new season fishmeal prices to increase. Most protein prices in the world are trending lower which would mean that fishmeal prices should probably be following the trend – well at least not moving higher.

 

There was a report in Europe this week of a new protein facility that will produce fishmeal equivalent protein for fish feed from biomass based methane gas. The production will be quite small in the beginning but it shows how much research is still going on in an attempt to find alternatives to fishmeal – especially what people see as more sustainable alternatives to fishmeal. Protein from biomass doesn't sound like too bad an alternative.

 

Also, a recent study by an Australian University forecasts that by 2030 fishmeal will just be a "specialty ingredient" in aquafeed and will have been largely replaced by other sources of protein. The study also suggests that methods will be found to use other oil and fat sources to replace fishoil use in aquafeed formulations.

 

European fishmeal prices – FOB North German port.

 

Type	Protein %	Price per m/t USD	Cost per protein unit
Herring fishmeal	72% protein	1,830	25.41
Danish fishmeal	64% protein	1,540	24.06
Peru fishmeal	64% protein	1,610	25.15
Chile fishmeal	67% protein	1,710	25.52
Iceland fishmeal	70% protein	1,865	26.64

 

 

 

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
	New crop prices for the Peru November fishing quota
65% protein	1310/1320 m/t
65/66 protein	1330/1340 m/t
67% protein standard steam	1360/1370 m/t
67% protein 150 TVN	1420/1440 m/t
67% protein 120 TVN	1470/1490 m/t
67% protein 1000 hist, 120 TVN	1520/1540 m/t	1500/1520
68% protein 500 hist, 120 TVN	1570/1590 m/t	1550/1570
Fish oil, crude bulk	2100/2150	1700/1750
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