Saturday, April 27, 2013

Weekly report -- April 27, 2013

 

 

Hammersmith Marketing Ltd  - Grain Trading

WEEKLY FEED GRAIN AND PROTEIN REPORT   April 27, 2013

                                                       (a Bahamas Corporation)

 

 

France:  Rep. Office: 33.9.7044.4881   Mobile: 33.6.8068.4564    Fax: 33.4.5774.7575

13-220 Quartier La Galine, St Remy de Provence, 13210 France

 

Head Office: Trident Services, Kings Court, Bay Street, PO Box N-3944, Nassau, Bahamas.

Email:   tradegroup@hammersmith.biz    WWW:  hammersmithltd.blogspot.com       SKYPE: bacon39a  

 

 

SECTION 1:  FEED GRAINS -- VEGETABLE AND ANIMAL PROTEIN

 

New crop corn and soybeans took a wee hit this week as China demand for 2013 crop was uncertain while at the same time old crop corn and soybeans were able to hold their prices much better.  The export situation in Brazil continues to affect old crop prices, as buyers need to cover immediate needs from limited USA supplies.  What should then happen later on is that, once Brazil catches up and everyone sees there is lots of supply but fewer orders, since many moved to the US, the price of soybeans out of Brazil should drop even lower.

 

Corn plantings in the US continue to be behind average for the year but experts have pointed out that there is no correlation between a couple of weeks later planting and reduced crop yields. There have been may years with late spring planting and very good yields --- the crop success is more in what happens in the growing season than exactly when the seeds went in the ground.

 

The weather looks to be good for planting in the US over the next couple of weeks so farmers will probably quickly catch up with about where they want to be.  There is some frost expected for parts of the US but with not much corn planted there is little risk of any crop damage.

 

Experts say that if good planting weather is seen for a couple of weeks then there should be a quick tumble in new crop corn prices – as it is there is about a USD 40 m/t spread between higher priced old crop and new crop with some experts saying that new crop could drop another USD 25 m/t but only if planting gets rolling at supersonic speed.

 

Soybean meal had a higher week with old crop soybeans being very close to unchanged.  The demand for export soymeal was very good as there are concerns that Argentina may not be able to export soymeal at normal levels due to farmers holding soybeans.  The price for the next few weeks is expected to be steady to higher for beans and meal, at least until the situation with supply in Argentina is more fully understood.

 

On the soybean planting side, as discussed in previous reports, farmers are watching the corn planting progress in order to decide to continue planting corn or to switch to soybeans if delays get to be too long.  A switch to soybeans will bring weakness to beans and meal in the new crop but it is still to soon to know if there will be any need for a switch.

      

 

FOB port or location specified .. prices in US$ .. in metric tones:

All shipments in bulk grain vessels unless stated otherwise

(NOLA is New Orleans, Louisiana, USA.)

 

Wheat, USA Soft Red Winter, NOLA

USD 279/281 May/July  

Wheat, USA Hard Red Winter 12 protein

USD 325/328   

Wheat, milling Black Sea 11.5 pro

USD 280/290 July/August

Wheat, soft milling, France, Rouen port

USD 317/320

Wheat, milling, Argentina, upriver

USD 310/320 May/June

Wheat, feed, Black Sea

USD 285>>260 May>>Aug

Barley, France, Rouen port

USD 273/275

Barley, feed, Argentina, upriver

USD 250/260 Dec 2013

Barley, feed, Black Sea

USD 300>>275

Barley, feed, USA Pacific Northwest

USD 270/275

 

 

Corn, FOB NOLA USA

USD  276>>270 May>>July

Corn, FOB Argentina port, upriver

USD  250>>240  May/July

Corn, FOB Brazil port

USD  212>>205  July/Aug/Sep

Corn, FOB Black Sea

USD  275>>260 May>>Aug 

Corn, FOB France

USD  279/284

Sorghum, Black Sea

USD  n/a

Sorghum, FOB Texas, low tannin, GMO free

USD  289/291  

Sorghum, FOB Argentina port, high tannin, GMO free

USD  asked 210/bid 195 May/July

 

 

Soymeal,  48 protein, FOB NOLA

USD  504/508 May/June

Soymeal, 48 protein, USA, Rotterdam

USD  539/543 May/June

Soymeal, Argentina, Rotterdam

USD  518>>450 Spot/>>/J/J/A  

Soymeal, 47 pro, FOB Argentina

USD  477>>417  May/>>/J/J/A  

Soymeal, 48 protein, Brazil, Rotterdam

USD  515>>440 Spot/>>/J/J/A   

Soymeal, FOB Brazil

USD  430>>410  May/>>J/J/A    

Soymeal, 48 protein, India FOB

USD  650/670

 

 

Bulk vessel shipments, minimum 5000 m/t

 

Corn Gluten Feed,  USA FOB NOLA

USD   225/230 m/t  

Corn Gluten Meal,  USA FOB NOLA

USD   600/610 m/t 

DDGS, 35 profat, USA FOB NOLA

USD   289/295 m/t May/June  

DDGS, 35 profat, CNF Asian ports

USD   347/352 m/t 

 

Due to problems in the Mississippi River, the export price for all corn by-products moved a little higher this week – domestic prices were actually a little lower for most but, with the higher cost of moving the products to export locations, the buyers were asked to pay a little more.  There is also some question on what the effect of bird flu in China will have on the export business and this lack of new business from China is helping to keep CNF Asia prices down.  With corn prices being down on the week and soymeal prices higher, there is a two-way push on prices but so far it looks like the corn by-products, at least for this week, are tending to follow corn lower rather than soymeal higher.

 

Looking at DDGS, the production of ethanol this year is close to 20 percent below last year, which also reduces the production of DDGS but trade experts see the ethanol production getting back to last years level in the next few months which will increase the supply of DDGS --- certainly too soon to say that this will decrease prices but one would think that increased supply would at least stop prices from going higher.

 

 

Container shipments, minimum 200 m/t

 

Argentina Meat & Bone meal, 45 protein

USD no prices

Brazil Meat & Bone meal, 45 protein

USD no prices  

Paraguay Meat & Bone meal, 45 protein

USD 535/540 m/t CNF Asia

Europe Meat & Bone meal, 45 protein

USD 520/550 m/t CNF Asia

USA Meat & Bone meal, 50 protein

USD 740/770 m/t CNF Asia

Australian MBM , 45 protein

USD 670/675 m/t CNF Asia

Australian MBM, 50 protein

USD 720/730 m/t CNF Asia

Australian Feathermeal

USD 840/850 m/t CNF Asia

USA Feathermeal, 80 protein

USD 860/870 m/t CNF Asia

USA Poultry Meal, feed grade

USD 720/740 m/t CNF Asia

USA Poultry Meal, pet food grade

USD 1150/1170 m/t CNF Asia

Australian Poultry meal, pet food grade

USD 1140/1160 m/t CNF Asia

 

 

The following indications are at producer's factory, ex-works in bulk

 

Meat and bone meal, USA, 50 protein

USD  450/470 m/t   

Feathermeal  80 protein USA

USD  650/670 m/t          

Poultry meal  57 protein, Eastern USA

USD  530/540 m/t  

 

 Both USA and Australian export and domestic meat and bone meal prices were lower this week. On the international side there seems to be a very good supply of protein available with prices trending lower, which is giving animal protein buyers the feeling that they can expect lower prices to come. Perhaps some of the weakness in the export market is due to the avian flu situation in China and the concern that demand will drop off considerably for all feed ingredients.

 

In the USA there is a good supply of animal proteins and except for pet food use demand the overall demand for animal proteins tends to weaken a little this time of year and this helps to push prices lower.  Of course, in the spring and summer all of North America looks to their BBQ's so meat demand is higher which creates additional stocks of animal proteins at a time when demand is slipping.

 

I guess that the only factor that can push proteins up at present is the new fishing quota in Peru and the effect that that will have on fishmeal prices --- if fishmeal moves higher there will be increased demand for animal proteins in the international market and this could move prices higher once again.

  

 

SECTION 2 --- FISHMEAL COMMENTS AND PRICES: PERUVIAN

 

Well, we now have the new quota for the next main fishing season in Peru:  2,050,000 m/t of fish in the period from May 17 until July 31, 2013 – last year was 2.5 million m/t.  There has been no sub-division of the quota so it will run in full from the start and finish as soon as the quota is landed or we reach July 31.  One very interesting thing about the announcement is the government's information that the biomass has increased from just over 5 million m/t to a current level of 12 million m/t – all in only a few months.  This amazing increase in the biomass calls into question the accuracy of the numbers but then is it the old numbers that were wrong or the current numbers --- one suspects that it is probably the old numbers that were wrong and that the 5 million m/t level was just an underestimate.

 

So, at least we know when there will be fishing and that there will not be any fishmeal available before June/July shipment and this new supply, of about 500,000 m/t, will have to cover all business up to about the end of 2013.

 

According to trade reports, the supply of fishmeal in China is getting quite low compared to normal stock levels and that with no new shipments from Peru possible for a couple of months, at a minimum, then there could be a sudden rush of demand from China for July/August shipments.

 

And, where are we going with prices?   There have been a couple of rumblings in the trade that the price for higher grades of fishmeal is up about USD 50 m/t but there has not been enough sales activity since the fishing announcement to be able to determine if there has been a change in price direction.  However, the trade feeling seems to be that lower prices are just not too likely from now until the end of 2013.  Higher prices seem to be much more of a possibility than lower prices.        

 

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

 

 

FAQ basis 65 protein

1630/1640 m/t

65/66 pro standard steam

1670/1680 m/t

67 protein standard steam

1740/1750 m/t

67 protein SD 150  TVN

1900/1920 m/t

67 protein SD 120 TVN

2060/2070 m/t

67 protein SD 1000 hist, 120 TVN

2080/2100 m/t

68 protein SD 500 hist, 120 TVN

2120/2130 m/t

 

 

Fish oil .. crude bulk

2500/2550

Fish oil – crude drums

2650/2700

Fish oil – flexitank

2600/2650

Fish oil – Omega 3 – 28%EPA/DHA

2900/3000

 

 

 

INFORMATION:  gtee = guarantee, TVN = total volatile nitrogen, hist = histamine,

FAQ = fair average quality (normally flame or hot air dried), SD = steam dried

           

Wayne Bacon

 

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 © 2013 Wayne S. Bacon