Weekly Report -- Sept 22, 2018

 

HAMMERSMITH Marketing Ltd
-------------------------

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Representative Office: +33.9.7044.4881   Mobile: +33.6.8068.4564   

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WEEKLY FEED GRAIN AND PROTEIN REPORT September 22, 2018

 

SECTION 1:  US FEED GRAINS and VEGETABLE AND ANIMAL PROTEIN

 

Most grain and oilseed prices were up on the week but the popular opinion in trade reports was that the increase in prices was just a response to how far prices had dropped rather than a rally that was created by any new bullish factors in the market.

 

Corn was a little higher on the week following quite good export sales numbers and some rainy weather in the corn belt that was slowing the harvest a little. Overall, there doesn't seem to be much reason for corn prices to move higher but then with the dollar weakening a bit and strong export demand continuing there may also be no reason for corn prices to drop any lower.

 

Soybean prices were up of the week and most experts were saying that this was all due to the very heavy rainfall seen in some areas and the delays seen for the soybean harvest. As we all know, the US farmer can catch up with a slow harvest week in very little time.

 

Soybean planting in Brazil is well ahead of last year and of the five-year average numbers and this should keep prices from rallying all that much. Looking at US soybean prices, the cost is so low compared to other origins that the export demand will just keep coming – but then, that demand will find it difficult to replace all the lost China demand.

 

US wheat prices were up on the week and a number of exports commented that US wheat has probably seen the lows for the year and looks to be able to move higher in coming weeks. There has also been a change of feeling in the futures market where some wheat bears are switching over to being flat or to being bullish whet prices.

 

Crop Situation and Condition – USA --- USDA report September 17, 2018

 

USA	Very poor %	Poor %	Fair %	Good %	Very Good %
Condition
Corn	4	8	20	47	21
Sorghum	5	12	30	44	9
Soybeans	3	7	23	49	18
Harvested	This week %	Last week %	This week 2017	Average 2013/17
Corn	9	5	7	6
Wheat, spring	97	93	98	92
Sorghum	26	24	28	29
Soybeans	6	0	4	3
Barley	96	92	99	97
Planted
Wheat, winter	13	5	12	14

 

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

 

There was a comment in the freight press this week that grain freight rates from South America could increase by as much as 35% in 2019 due to the very heavy grain export demand that is expected. With crop problems in Australia, Asia and India the demand for Argentina and Brazil grain exports and the large grain/oilseed crops in both Argentina and Brazil should fuel the demand for bulk grain vessels. Grain freight rates from South America to Asia are reported to have already increased by 18% in 2018 with more increases on the way.

 

US Gulf to Europe: 60/70,000 (10,000 disch)	$20/21.00	Steady	X
US Gulf to Spain: 50,000 m/t (5,000 disch)	$21/22.00	Steady	X
US Gulf Israel: 50,000 m/t	$30/31.00	Steady	X
US Gulf to Egypt: Panamax (6,000 disch)	$29/30.00	Steady	X
US Gulf Turkey: 50,000 m/t	$31/32.00	Steady	X
US Gulf Morocco: 30,000(5,000 disch)	$32/33.00	Steady	X
US Gulf Algeria/Tunisia: 30,000 (3,000 disch)	$33/34.00	Steady	X
US Gulf Nigeria: 30,000 m/t	$43/44.00	Steady	X
US Gulf other Med: 30,000 MT(5,000 disch)	$33/34.00	Steady	X
US Gulf South Africa: 45,000 m/t	$38/39.00	Steady	X
US Gulf Japan: Panamax	$45/46.00	Down $1.00	X
US Gulf China: Panamax	$44/45.00	Down $1.00	X
US PNW South Africa – 40,000 m/t	$37/38.00	Steady	X
US PNW Japan: Panamax	$25/26.00	Steady	X
US PNW China: Panamax	$24/25.00	Steady	X
US East Coast Egypt: Panamax	$42/43.00	Steady	X
US East Coast Nigeria: Handisize	$45/46.00	Steady	x
France/Germany to Algeria: 30,000 m/t(3,000 disch)	$15/16.00	Steady	X
France/Germany to Bangladesh: 35/45,000 m/t	$31/32.00	Steady	X
France/Germany to China: 50,000 m/t	$37/38.00	Steady	X
France/Germany to Egypt: 50,000 m/t (10,000 disch)	$15/16.00	Steady	X
France/Germany to India: 50,000 m/t	$27/28.00	Steady	X
France/Germany to Jordan: 35/45,000 m/t (4k disch)	$21/22.00	Steady	X
France/Germany to Morocco: 30,000 m/t (3k disch)	$13/14.00	Steady	X
France/Germany to Saudi Arabia: 50/60,000	$26/27.00	Steady	X
France/Germany to South Africa: 30,000 m/t	$25/26.00	Steady	X
France/Germany to Turkey: 35,000 m/t	$16/17.00	Down $1.00	x
France/Germany to Yemen: 30,000 m/t	$38/39.00	Steady	X
Argentina to Algeria: 25/30,000 m/t(3,000 disch)	$27/28.00	Steady	X
Argentina to China: 50,000 m/t, with top-off	$42/43.00	Up $1.00	X
Argentina to Japan: 50,000 m/t, with top-off	$41/42.00	Up $1.00	X
Argentina to Egypt: 50,000 m/t	$37/38.00	Steady	X
Argentina to Europe: 50/60,000 m/t	$37/38.00	Steady	X
Argentina to Morocco: 25/30,000 m/t(3,000 disch)	$24/25.00	Up $1.00	X
Argentina to Jordan: 50,000 m/t	$35/36.00	Steady	X
Argentina to Saudi Arabia: 50,000 m/t	$32/33.00	Up $1.00	X
Argentina to South Africa 50,000 m/t	$29/30.00	Up $1.00	X
Argentina to Spain: 50,000 m/t	$37/38.00	Steady	X
Argentina to Tunisia: 25/30,000 m/t (3,000 disch)	$27/28.00	Steady	X
Argentina to US Gulf: 25/35,000 m/t	$20/21.00	Steady	X
Brazil to Algeria/Tunisia: 25/30,000 m/t	$27/28.00	Steady	X
Brazil to China: 55,000 m/t	$36/37.00	Steady	X
Brazil to Japan: 55,000 m/t	$37/38.00	Steady	X
Brazil to Europe: 50,000 m/t	$33/34.00	Down $1.00	X
Brazil to Morocco: 25/30,000 m/t	$27/28.00	Up $1.00	X
Brazil to Saudi Arabia 30/40,000 m/t	$36/37.00	Steady	X
Brazil to Spain: 50,000 m/t	$33/34.00	Steady	X
Brazil to Turkey/Egypt: 50,000 m/t	$35/36.00	Up $1.00	X
Australia to China: 40-55,000 m/t – round trip	$19.50/20.00	Up 40.50	X
Australia to Japan: 40-55,000 m/t – round trip	$20.50/21.00	Steady	X
Australia to Saudi Arabia: 40-55,000 m/t	$25/26.00	Steady	X
Ukraine to China:  50,000 m/t	$34/35.00	Up $1.00	X
Ukraine to Bangladesh: 45,000 m/t	$33/34.00	Steady	X
Ukraine to India: 45/50,000 m/t	$29/30.00	Steady	X
Black Sea to East Med: 30,000 m/t  (3,000 disch)	$13/14.00	Steady	X
Ukraine to East Med: coaster (1,000 disch)	$25/26.00	Steady	X
Russia to Turkey - Izmir: coaster (1,000 disch) -	$28/29.00	Steady	X
Black Sea to Egypt: 40/50,000 m/t – (6,000 disch)	$15/16.00	Steady	X
Black Sea to Egypt: 30,000 m/t – (4,000 dich)	$15/16.00	Steady	X
Ukraine to Egypt: coaster 3,000 m/t (1,000 disch)	$25/26.00	Steady	X
Russia to Egypt: coaster 3,000 m/t (1,000 disch)	$45/46.00	Steady	X
Black Sea to Iraq: 50,000 m/t (4,000 disch)	$37/38.00	Steady	X
Black Sea to Europe: 50,000 m/t	$24/25.00	Up $1.00	X
Black Sea to Morocco: 30,000 m/t (3,000 disch)	$16/17.00	Steady	X
Black Sea to Spain: 40/50,000 m/t (8,000 disch)	$24/25.00	Steady	X
Black Sea to Jordan: 50,000 m/t (5,000 disch)	$28/29.00	Steady	X
Black Sea to Libya: 25/35,000 m/t	$20/21.00	Steady	X
Black Sea to Saudi Arabia – Jeddah – 50k	$35/36.00	Up $1.00	X
Black Sea to South Africa – 30,000 m//t	$37/38.00	Steady	X
Black Sea to Turkey – 30,000 m/t	$11/12.00	Steady	X
Black Sea to Tunisia/Algeria: 30,000(5,000 disch)	$18/19.00	Steady	X
Baltic Dry Index	1413	Up 47	X
Baltic Capesize Index	1840	Down 60	X
Baltic Panamax Index	1586	Up 63	X
Baltic Supramax Index	1175	Up 41	X
Baltic Handisize Index	617	Up 29	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 2018/December 2018

 

Wheat, USA Soft Red Winter, NOLA	USD 217/221	X
Wheat, USA Hard Red Winter 11 protein -NOLA	USD 243/247	x
Wheat, Ukraine 11.5 pro, 30,000+ m/t	USD 209/213	x
Wheat, Russia 12.5 pro, 30,000+ m/t	USD 219/224	x
Wheat, Romania 12.5 pro	USD 222/226	x
Wheat, Superior, France, Rouen	USD 241/243	x
Wheat, milling, 12.0%, Argentina, Upriver	USD 225/230 Jan/Feb 2019	x
Wheat, feed, Black Sea	USD 195/201	x
Barley, France, Rouen port	USD 244/246	x
Barley, feed, Argentina, up river	USD no prices	x
Barley, feed, Black Sea, 30,000+	USD 230/234	x
Barley, feed, USA Pacific Northwest	USD 220/225	x
Corn, 2YC FOB NOLA USA	USD 158/161	X
Corn, 3YC FOB USA Pacific northwest	USD 172/180	x
Corn, FOB Argentina port, upriver	USD 161/164	x
Corn, FOB Brazil port	USD 170/173	x
Corn, FOB France - Atlantic	USD 210/212	x
Corn, FOB Romania	USD 168/171	x
Corn, FOB Russia	USD 178/182	x
Corn, FOB Ukraine, 30,000+ m/t	USD 164/168	x
Sorghum, FOB Argentina port	USD 154/158	x
Sorghum, FOB Texas	USD 172/175	x
Soymeal, 48% protein, FOB NOLA	USD 354/358	X
Soymeal, 48% protein, USA, Rotterdam	USD 379/383	x
Soymeal, Argentina, Rotterdam	USD 377/381	x
Soymeal, 47% pro, FOB Argentina	USD 347/351	x
Soymeal, 48% protein, Brazil, Rotterdam	USD 381/384	x
Soymeal, 48% protein, FOB Brazil	USD 352/356	x
Soybeans, FOB NOLA	USD 314/318	x
Soybeans, Argentina, FOB	USD 385/389	x
Soybeans, Brazil, FOB	USD 401/404	x
Soybeans, Black Sea	USD 364/369	x
Corn Gluten Meal, USA FOB NOLA	USD 540>>500 m/t	x
Corn Gluten Feed, USA FOB NOLA	USD 175>>165 m/t	x
DDGS corn, 35 profat, USA FOB NOLA	USD 188/193	x

 

Corn by-product prices are still weak as they try to keep up with the recent weakness in US corn prices. However, there was the comment by the US Grains Council that expected reductions in ethanol production could stop DDGS prices from moving any lower. At today's prices for DDGS, it look like a tremendous bargain.

 

Trade reports say that export interest in DDGS, corn gluten meal and corn gluten feed is quite strong as buyers see the falling corn prices and lower byproduct prices as a very good buying opportunity.

 

Normally we see seasonal low prices around corn harvest and that is exactly what is happening this year but these low prices will not last forever and with a build up in export demand we could easily see a nice little rally in export prices. Not that there will be any shortage of product just that the could be tightness in export logistics that will move FOB prices higher.

 

The USDA national price listing shows DDGS domestic prices about steady with corn gluten feed prices down by about USD 4 m/t while corn gluten meal is said to be up by about USD 9 m/t.  

 

Container shipments, minimum 200 m/t

 

Australian MBM 45% protein    Australian MBM 50% protein    Australian Feathermeal, 80% protein    Australian Poultry Meal, pet food	USD 350/360 m/t CNF Asia  USD 390/400 m/t CNF Asia  USD 525/535 m/t CNF Asia  USD 850/870 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 445/455 to Indonesia  USD 630/640 m/t CNF Asia  USD 590/600 m/t CNF Asia  USD 810/820 m/t CNF Asia

 

Reports out of Australia say that local industry is doing everything that it can to get the animal protein business with Indonesia opened again --- all Australian meat and bone meal is reported to have been banned in Indonesia. Of course, with Australia out of the market, prices for MBM from other origins is moving higher. Australian MBM exporters are said to be dropping their prices in order to sell into other Asian markets.

 

USA export prices showed a little weakness for poultry meal and perhaps a small drop in feathermeal export prices.

 

In the US domestic market there seems to be much more supply than demand, so no one is looking for higher prices in the next few weeks.  This should also keep US export price from moving any higher.   

 

There was also the comment in the Jacobsen report that even if US MBM does move more into Indonesia to replace Australian that will probably not cause any market rally as there is just too much available supply.

 

 

SECTION 2 --- FISHMEAL COMMENTS AND PRICES: PERUVIAN

 

Still no fishing in the south of Peru -reports say that the fish are staying close to shore and are not within the allowed fishing areas.

 

The current IMARPE research cruise into the biomass is scheduled to come to an end in a few days with another cruise looking at measuring the biomass by acoustic methods about to start. Hopefully everything will be measured, documented and reported in time for a prompt start to the next fishing season.

 

Most of the important fishmeal people in Peru are in China for the JCi Feed conference – so things in Peru and perhaps in the industry could be even quieter this week.

 

The feeling in the trade reports in Peru is still that the next season will have a quota above 2.0 million m/t – perhaps up to 2.3 million m/t – with fishing starting about mid-November.

 

There is really nothing left to buy in Peru these days – well perhaps the odd lot – but nothing in stock of any significance – business for shipment between now and December is nil – nothing to sell and nothing to ship.

MSI-Ceres pointed out some recent comments in press reports regarding world fishing and the number of people who say that it should be stopped or better controlled. Fishing, it is said, produces 80 million m/t of landed fish per year and that it would be next to impossible to replace that spruce of food, feed and protein with livestock based production --- there is just no room or no feed for all the animals that would be required to replace the fishing industry or even to replace a chunk of the industry if fishing in reduced.  80 million m/t of fish represents a huge amount of protein.

 

European fishmeal prices – FOB North German port.

 

Type	Protein %	Price per m/t USD
Herring fishmeal	72% protein	1,805
Danish fishmeal	64% protein	1,500
Peru fishmeal	64% protein	1,480
Chile fishmeal	67% protein	1,530
Iceland fishmeal	70% protein	1,800

 

 

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
65/66 protein	1260/1280 m/t
67% protein standard steam	1310/1330 m/t
67% protein 150 TVN	1460/1480 m/t	No prices
67% protein 120 TVN	1510/1530 m/t	1530/1550
67% protein 1000 hist, 120 TVN	1560/1580 m/t	1600/1620
68% protein 500 hist, 120 TVN	1600/1620 m/t	1610/1630
Fish oil, crude bulk	1410/1430	1400/1450
Fish oil, crude drums	1460/1480
Fish oil, flexi tank	1560/1580
Fish oil, Omega 3: 28%EPA/DHA	1700/1800

 

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 © 2018 Wayne S. Bacon