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PO Box N-3944, Nassau, Bahamas. Email: tradegroup@hammersmith.biz
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WEEKLY FEED GRAIN AND PROTEIN REPORT December 02, 2017
SECTION 1: US FEED GRAINS and VEGETABLE AND ANIMAL PROTEIN
Well, the USA harvest seems to be all done and all the grain is in the bin. Now all we need to know is how much did we actually end up with. Was the USDA correct in its projections – do we just have a surplus or now a huge surplus? All questions for the market to argue over and for prices to react to. In most years we will have seen the low prices of the year and from here on in prices just move higher month by month to cover storage and finance costs. But then, there are always enough market factors that can be thrown in to keep things exciting until the next planting season in the US.
This week, as has been for the past couple of weeks, grain/oilseed markets were quiet with the week ending prices not all that far off the previous week. US corn and soybean prices were almost unchanged while soymeal was up by USD 4 or 5 m/t, winter wheat prices moved a couple of dollars per m/t higher while spring wheat continues to slip lower.
One small comment on wheat – hard red winter – if you want higher protein you will have to pay through the nose as the protein premium continues to be very strong. 11% protein HRW is reasonably priced but once you get into 12% and higher the protein premium is very high.
On the corn side of things there is little new information to report, except that corn use in ethanol is up by 2.8% on the year – well above the USDA estimate of a 1% increase. The USDA's ideas on corn for 2018 in the US showed about the same amount of planting and the same production size. Looks like another bumper year is expected for corn in 2018. Very difficult to expect higher corn price for farmers when so much corn is being produced in the USA and the world.
Soybean prices were said to be up a little on a lack of US farmer selling and year-to-date crush numbers that are higher than the USDA estimates. There are some concerns about the soybean crops in both Brazil and Argentina that gave a little push higher to market prices --- everyone is now watching the weather in South America, the rain in particular, as this is where the next price rally will be centered.
Crop progress and condition --- USA and France
Estimated Bulk Grain Freight in USD per m/t, basis heavy grains
Changes in freight are from the last report which was on November 18th, 2017.
Changes in Baltic Indexes are from November 25th, 2017.
| US Gulf to Europe: 60/70,000 (10,000 disch) | $18/19.00 | Up $1.00 | X |
| US Gulf to Spain: 50,000 m/t (5,000 disch) | $22/23.00 | Up $1.00 | X |
| US Gulf Israel: 50,000 m/t | $29/30.00 | Up $2.00 | X |
| US Gulf to Egypt: Panamax (6,000 disch) | $28/29.00 | Up $2.00 | X |
| US Gulf Turkey: 50,000 m/t | $30/31.00 | Up $2.00 | X |
| US Gulf Morocco: 30,000(5,000 disch) | $31/32.00 | Up $2.00 | X |
| US Gulf Algeria/Tunisia: 30,000 (3,000 disch) | $32/33.00 | Up $2.00 | X |
| US Gulf Nigeria: 30,000 m/t | $39/40.00 | Steady | X |
| US Gulf other Med: 30,000 MT(5,000 disch) | $32/33.00 | Steady | X |
| US Gulf South Africa: 45,000 m/t | $38/39.00 | Steady | X |
| US Gulf Japan: Panamax | $44/45.00 | Up $3.00 | X |
| US Gulf China: Panamax | $43/44.00 | Up $3.00 | X |
| US PNW South Africa – 40,000 m/t | $37/38.00 | Up $1.00 | X |
| US PNW Japan: Panamax | $25/26.00 | Up $3.00 | X |
| US PNW China: Panamax | $24/25.00 | Up $1.00 | X |
| US East Coast Egypt: Panamax | $47/48.00 | Up $2.00 | X |
| US East Coast Nigeria: Handisize | $41/42.00 | Up $2.00 | X |
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| France/Germany to Algeria: 30,000 m/t(3,000 disch) | $13/14.00 | Steady | X |
| France/Germany to Bangladesh: 35/45,000 m/t | $34/35.00 | Steady | X |
| France/Germany to China: 50,000 m/t | $32/33.00 | Up $1.00 | X |
| France/Germany to Egypt: 50,000 m/t (10,000 disch) | $15/16.00 | Up $1.00 | X |
| France/Germany to India: 50,000 m/t | $20/21.00 | Up $1.00 | X |
| France/Germany to Jordan: 35/45,000 m/t (4k disch) | $24/25.00 | Steady | X |
| France/Germany to Morocco: 30,000 m/t (3k disch) | $10/11.00 | Steady | X |
| France/Germany to Saudi Arabia: 50/60,000 | $22/23.00 | Up $1.00 | X |
| France/Germany to South Africa: 30,000 m/t | $32/33.00 | Steady | X |
| France/Germany to Turkey: 35,000 m/t | $20/21.00 | Steady | X |
| France/Germany to Yemen: 30,000 m/t | $46/47.00 | Steady | X |
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| Argentina to Algeria: 25/30,000 m/t(3,000 disch) | $24/25.00 | Steady | X |
| Argentina to China: 50,000 m/t, with top-off | $40/41.00 | Up $4.00 | X |
| Argentina to Japan: 50,000 m/t, with top-off | $41/42.00 | Up $4.00 | X |
| Argentina to Egypt: 50,000 m/t | $26/27.00 | Up $2.00 | X |
| Argentina to Europe: 50/60,000 m/t | $25/26.00 | Up $1.00 | X |
| Argentina to Morocco: 25/30,000 m/t(3,000 disch) | $21/22.00 | Steady | X |
| Argentina to Saudi Arabia: 25/30,000 m/t | $47/48.00 | Steady | X |
| Argentina to South Africa 50,000 m/t | $24/25.00 | Up $1.00 | X |
| Argentina to Spain: 50,000 m/t | $24/25.00 | Up $2.00 | X |
| Argentina to Tunisia: 25/30,000 m/t (3,000 disch) | $24/25.00 | Steady | X |
| Argentina to US Gulf: 25/35,000 m/t | $21/22.00 | Up $1.00 | X |
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| Brazil to Algeria/Tunisia: 25/30,000 m/t | $27/28.00 | Steady | X |
| Brazil to China: 55,000 m/t | $34/35.00 | Up $2.00 | X |
| Brazil to Japan: 55,000 m/t | $35/36.00 | Up $2.00 | X |
| Brazil to Europe: 50,000 m/t | $22/23.00 | Steady | X |
| Brazil to Morocco: 25/30,000 m/t | $26/27.00 | Steady | X |
| Brazil to Saudi Arabia 30/40,000 m/t | $35/36.00 | Steady | X |
| Brazil to Turkey/Egypt: 50,000 m/t | $25/26.00 | Up $2.00 | X |
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| Australia to China: 40-55,000 m/t – round trip | $19.50/20.00 | Steady | X |
| Australia to Japan: 40-55,000 m/t – round trip | $20.00/20.50 | Steady | X |
| Australia to Saudi Arabia: 40-55,000 m/t | $25/26.00 | Steady | X |
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| Ukraine to China: 50,000 m/t | $32/33.00 | Up $2.00 | X |
| Ukraine to Bangladesh: 45,000 m/t | $32/33.00 | Up $1.00 | X |
| Ukraine to India: 45/50,000 m/t | $27/28.00 | Steady | X |
| Black Sea to East Med: 30,000 m/t (3,000 disch) | $11/12.00 | Steady | X |
| Ukraine to East Med: coaster (1,000 disch) | $30/31.00 | Steady | X |
| Black Sea to Egypt: 40/50,000 m/t – (6,000 disch) | $13/14.00 | Steady | X |
| Black Sea to Egypt: 30,000 m/t – (4,000 dich) | $14/15.00 | Steady | X |
| Ukraine to Egypt: coaster 3,000 m/t (1,000 disch) | $30/31.00 | Steady | X |
| Russia to Egypt: coaster 3,000 m/t (1,000 disch) | $52/53.00 | Steady | X |
| Black Sea to Iraq: 50,000 m/t (4,000 disch) | $32/33.00 | Steady | X |
| Black Sea to Morocco: 30,000 m/t (3,000 disch) | $15/16.00 | Up $1.00 | X |
| Black Sea to Spain: 40/50,000 m/t (8,000 disch) | $16/17.00 | Steady | X |
| Black Sea to Jordan: 50,000 m/t (5,000 disch) | $22/23.00 | Steady | X |
| Black Sea to Saudi Arabia – Jeddah – 50k | $24/25.00 | Steady | X |
| Black Sea to South Africa – 30,000 m//t | $37/38.00 | Steady | X |
| Black Sea to Turkey – 30,000 m/t | $13/14.00 | Up $1.00 | X |
| Black Sea to Tunisia/Algeria: 30,000(5,000 disch) | $15/16.00 | Steady | X |
| Black Sea to Yemen: 50,000 m/t | $23/24.00 | Steady | X |
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| Baltic Dry Index | 1626 | Up 213 | X |
| Baltic Capesize Index | 4025 | Up 727 | X |
| Baltic Panamax Index | 1494 | Up 213 | X |
| Baltic Supramax Index | 944 | Up 69 | X |
| Baltic Handisize Index | 626 | Up 6 | X |
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FOB port or location specified. Prices in US$, in metric tons:
All shipments in bulk grain vessels unless stated otherwise
(NOLA is New Orleans, Louisiana, USA.)
ALL PRICES ARE FOR December 2017/February 2018
| Wheat, USA Soft Red Winter, NOLA | USD 185/189 | x |
| Wheat, USA Hard Red Winter 11 protein -NOLA | USD 200/205 lower protein from 12% down to 11% | x |
| Wheat, Ukraine 11.5 pro, 30,000+ m/t | USD 179/183 | X |
| Wheat, Russia 12.5 pro, 30,000+ m/t | USD 191/193 | X |
| Wheat, Romania 12.5 pro | USD 187/191 | x |
| Wheat, Superior, France, Rouen | USD 194/198 | X |
| Wheat, milling, 12.0%, Argentina, upriver | USD 176/179 | x |
| Wheat, feed, Black Sea | USD 176/180 | x |
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| Barley, France, Rouen port | USD 184/187 | x |
| Barley, feed, Argentina | USD 178/184 | X |
| Barley, feed, Black Sea, 30,000+ | USD 187/191 | X |
| Barley, feed, USA Pacific Northwest | USD 220/225 | X |
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| Corn, 2YC FOB NOLA USA | USD 158/162 | X |
| Corn, 3YC FOB USA Pacific northwest | USD 171/174 | X |
| Corn, FOB Argentina port, upriver | USD 156/160 | X |
| Corn, FOB Brazil port | USD 163/167 | X |
| Corn, FOB Ukraine, 30,000+ m/t | USD 161/164 | X |
| Corn, FOB France | USD 187/193 | X |
| Corn, FOB Romania | USD 163/167 | X |
| Corn, FOB Russia | USD 161/165 | X |
| Sorghum, FOB Texas | USD 183/187 | X |
| Sorghum, FOB Argentina port | USD 159/163 | x |
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| Soymeal, 48% protein, FOB NOLA | USD 354/360 | X |
| Soymeal, 48% protein, USA, Rotterdam | USD 379/385 | x |
| Soymeal, Argentina, Rotterdam | USD 367/371 | x |
| Soymeal, 47% pro, FOB Argentina | USD 342/346 | x |
| Soymeal, 48% protein, Brazil, Rotterdam | USD 358/361 | x |
| Soymeal, 48% protein, FOB Brazil | USD no offers | x |
| Soymeal, 48% protein, FOB India | USD 355/360 | x |
| Soybeans, FOB NOLA | USD 382/386 | x |
| Soybeans, Argentina, FOB | USD 388/390 | X |
| Soybeans, Brazil, FOB | USD 388/391 | X |
| Soybeans, Black Sea | USD 383/388 | x |
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| Corn Gluten Meal, USA FOB NOLA | USD 585/590 m/t | X |
| Corn Gluten Feed, USA FOB NOLA | USD 150/153 m/t | X |
| DDGS corn, 35 profat, USA FOB NOLA | USD 186/188 m/t | X |
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It wasn't a particularly exciting week for corn by-products. Corn gluten feed prices were mainly unchanged on the week while export corn gluten meal did move about USD 5 m/t higher. Corn gluten meal could see a surge in export interest if buyers switch some demand to CGM from much higher priced fishmeal, following the current fishmeal price rally.
Sellers of DDGS are still waiting to see if there will be a rush of new business from China after the change in the import VAT but so far this has not developed.
The USDA issued its monthly Grain Crushing report and DDGS production was up by about 6% over last month at 1.96 million m/t. Corn gluten feed production was up by close to 10% at 353,000 m/t with corn gluten meal production up by about 7% to 93,000 m/t. As a matter of information, corn used for crushing (mainly for ethanol production) was up by about 5%.
Container shipments, minimum 200 m/t
| Australian MBM 45% protein Australian MBM 50% protein Australian Feathermeal, 80% protein Australian Poultry Meal, pet food | USD 400/410 m/t CNF Asia USD 440/450 m/t CNF Asia USD 480/490 m/t CNF Asia USD 860/870 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 450/460 m/t CNF Asia USD 370/380 to Indonesia USD 490/500 m/t CNF Asia USD 570/590 m/t CNF Asia USD 800/830 m/t CNF Asia |
Prices for all animal proteins were higher into the main import markets in Asia. While some of the market strength is supply related some of the price rally is probably due to the jump in fishmeal prices and a buyers' rush to cover some protein needs for alternative proteins to fishmeal.
Supply from Australia and New Zealand is expected to increase but the overall strength in protein prices could keep animal protein prices from moving lower even as supply improves. Demand may just quickly eat up any additional supply.
Domestic prices in the USA were steady with a good supply of animal proteins available at prices that work well against soymeal. Domestic prices don't look to be moving higher at present.
SECTION 2 --- FISHMEAL COMMENTS AND PRICES: PERUVIAN
With the new low quota announced in Peru and the vessels out fishing with poor results so far, all attention is now on who may be a seller. Everyone seems to be a buyer, but sellers are all hiding away just waiting to see how the fishing goes and how high a price they can get for their unsold fishmeal.
The low quota will mean that this seasons production will not exceed about 340,000 m/t of fishmeal and as much as 50% of that quantity may be presold at lower prices. Needless to say, sellers will not want to sell much more unless they can see an attractive selling price point.
One shouldn't forget that as the quota drops the overhead cost per ton increases as the producers and fishing fleet fixed costs don't drop just because the quota is lower – variable costs yes but not fixed costs. Selling prices have to be higher just to cover costs from the ocean to the end of production.
As you can see from the indication prices below, there has been an immediate price jump – perhaps the jump is too high but only time and some fishing will tell. According to the trade, prices are also much higher in China, the highest level in a year --- prices are up by about 20% in the local China market. Although there is lots of imported fishmeal on hand in China the fact that replacement cost has moved higher will keep prices for stock on hand at higher levels.
And then there is the fishing in Peru where very high levels of juvenile fish have been seen, leading to a number of mini-bans for fishing. In some areas the juvenile level is in excess of 90%.
So, as things stand: poor fishing with several mini-bans, very strong buyer demand, sellers out of the market, much higher prices…..exciting days for a while with even higher prices to be expected.
European fishmeal prices – FOB North German port.
| Type | Protein % | Price per m/t USD |
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| Herring fishmeal | 72% protein | 1,630 | Up $75 m/t |
| Danish fishmeal | 64% protein | 1,490 | Up $110 |
| Peru fishmeal | 64% protein | 1,500 | Up $125 |
| Chile fishmeal | 67% protein | 1,550 | Up $130 |
| Iceland fishmeal | 70% protein | 1,600 | Up $30 |
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 | 1300/1320 m/t | Up $80 |
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| 65/66 protein | 1330/1350 m/t | Up $80 |
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| 67% protein standard steam | 1400/1300 m/t | Up $90 |
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| 67% protein 150 TVN | 1550/1570 m/t | Up $160 | No prices |
| 67% protein 120 TVN | 1600/1620 m/t | Up $170 | No prices |
| 67% protein 1000 hist, 120 TVN | 1650/1670 m/t | Up $180 | 1650/1670 |
| 68% protein 500 hist, 120 TVN | 1700/1720 m/t | Up $180 | 1700/1720 |
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| Fish oil, crude bulk | 1800/1850 | Up $200 | 1450/1500 |
| Fish oil, crude drums | 1900/1950 | Up $200 |
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| Fish oil, flexi tank | 2000/2050 | Up $200 |
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| Fish oil, Omega 3: 28%EPA/DHA | No prices |
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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 © 2017 Wayne S. Bacon
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