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SECTION 1: US FEED GRAINS and VEGETABLE AND ANIMAL PROTEIN
So, what more can be said about the UK leaving the EU – that is about all that is in the news here in Europe. Speaking as a dual Canada/UK citizen living in the EU, I certainly have the odd concern about what can happen in the future. No one expects to get booted out of the EU or of the UK but it could be that all of us UK expats will now need yearly resident visas, much as other non-EU counties have to do. If that is the worst that happens, on a personal level, then that is not too bad.
Of course, a 10% drop in the British pound and a 2.8% drop in the Euro versus the USD will tend to hurt a bit. Perhaps now is the time to buy UK property with US$.
Back to the grain and oilseed markets – the combination of better weather in the US coupled with the Brexit panic certainly did a job on futures prices this week – luckily the cash prices were not quite as hard hit but for those looking at basis buying over Chicago prices were very soft.
The weather that had been expected will not happen and with corn showing 75% good/excellent followed by soybeans at 73% good/excellent then there does not seem to be any short term weather concerns in the US. Of course, as the exports are quick to point out, corn is going to need some rainfall in the next three weeks as it gets ready for pollination. So, as usual, weather is still a major risk factor for corn.
Reports on soybeans say that much of the fall in prices this week was due to Brexit concerns. One trade reports said that some traders started liquidating their longs early in the week on fears of a market upset no matter which way the UK/EU things went. It takes something like this Brexit situation for us all to realize just how closely all these "financial" factors fit together and how quickly the "big money" can jump out of one market into another.
The only reason that Brexit can affect corn and soybeans is that the largest chunk of the futures trading has little or nothing to do with hedging or actual physical buying or selling but is just another financial instrument used for investment and speculation – but, I am sure that we all know that.
Next week, after the Brexit effect has calmed down a little we will see the market back to their normal ups and downs – one hopes
Crop planting progress and condition --- USA and France
| Planting USA | June 19 2016 % | June 19 2015 % | Five year Average % |
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| Sorghum | 88 | 81 | 86 |
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| Soybeans | 96 | 89 | 93 |
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| Condition USA June 19, 2016 | Very poor | Poor | Fair | Good | Excellent |
| Winter wheat - % | 2 | 7 | 30 | 49 | 12 |
| Spring wheat | 1 | 3 | 20 | 64 | 12 |
| Barley | 0 | 1 | 22 | 60 | 17 |
| Corn | 1 | 3 | 21 | 60 | 15 |
| Soybeans | 1 | 4 | 22 | 61 | 12 |
| Sorghum | 1 | 3 | 27 | 62 | 8 |
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| Condition France June 20, 2016 | Very poor | Poor | Fair | Good | Excellent |
| Wheat | 2 | 8 | 20 | 54 | 17 |
| Winter barley | 2 | 9 | 21 | 54 | 13 |
| Durum wheat | 4 | 12 | 25 | 49 | 9 |
| Spring barley | 0 | 7 | 17 | 55 | 21 |
| Corn | 3 | 7 | 21 | 65 | 4 |
@USDA and France AgriMer
The condition of all French grain crops has dropped this week due to the prolonged period of heavy rains in much of France.
Estimated Bulk Grain freight in USD per m/t, basis heavy grains
The new, expanded Panama Canal opens on June 26 with trial transits being done this past week with few if any problems. The new canal can accept vessels up to 1,200 feet max (old was 965 feet), new max width of 160.7 feet (old at 106 feet), New draft at 49.9 feet (old at 41.2 feet) and for container people up to 13,000 TEU versus the old limit of 5,000 TEU. Vessels meeting the new maximum standard have been described as "neopanamax" and vessels are being built to match the standards.
| US Gulf to Europe: 60/70,000 (10,000 disch) | $16/17.00 | Up $1.00 | X |
| US Gulf to Spain: 30,000 m/t (5,000 disch) | $21/22.00 | Steady | x |
| US Gulf Israel: 50,000 MT | $20/21.00 | corrected | X |
| US Gulf to Egypt: Panamax(6,000 disch) | $19/20.00 | corrected | X |
| US Gulf Turkey: 50,000 | $21/22.00 | Corrected | X |
| US Gulf Morocco: 30,000(5,000 disch) | $32/33.00 | Up $1.00 | X |
| US Gulf Nigeria: 30,000 m/t | $49/50.00 | Up $3.00 | X |
| US Gulf other Med: 30,000 MT(5,000 disch) | $32/33.00 | Up $1.00 | X |
| US Gulf Japan: Panamax | $28/29.00 | Corrected | X |
| US Gulf China: Panamax | $26/27.00 | Corrected | X |
| US PNW South Africa | $31/32.00 | Steady |
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| US PNW Japan: Panamax | $16/17.00 | Steady | X |
| US PNW China: Panamax | $14/15.00 | Steady | x |
| US East Coast Egypt: Panamax | $42/43.00 | Up $1.00 | X |
| US East Coast Nigeria: Handisize | $49/50.00 | Up $1.00 | x |
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| France/Germany to Algeria: 30,000 m/t(3,000 disch) | $24/25.00 | Steady | x |
| France/Germany to Egypt: 50,000 m/t (10,000 disch) | $22/23.00 | Steady | x |
| France/Germany to Jordan: 35/45,000 m/t (4,000 disch) | $28/29.00 | Steady | x |
| France/Germany to Morocco: 30,000 m/t (3,000 disch) | $23/24.00 | Steady | x |
| France/Germany to Saudi Arabia: 50/60,000 | $30/31.00 | Steady | x |
| France/Germany to South Africa: 30,000 m/t | $30/31.00 | Steady | x |
| France/Germany to Yemen: 30,000 m/t | $48/49.00 | Up $1.00 | x |
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| Argentina to Algeria: 25/30,000 m/t(3,000 disch) | $27/28.00 | Up $2.00 | x |
| Argentina to China: 50,000 m/t, with top-off | $28/29.00 | Up $1.00 | X |
| Argentina to Japan: 50,000 m/t, with top-off | $30/31.00 | Up $2.00 | x |
| Argentina to Egypt: 50,000 m/t | $23/24.00 | Down $1.00 | 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) | $25/26.00 | Up $2.00 | x |
| Argentina to Saudi Arabia: 25/30,000 m/t | $43/44.00 | Up $2.00 | 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 | $28/29.00 | Up $1.00 | x |
| Argentina to Tunisia: 25/30,000 m/t(3,000 disch) | $27/28.00 | Up $2.00 | x |
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| Brazil to Algeria: 25/30,000 m/t | $28/29.00 | Up $2.00 | X |
| Brazil to China: 55,000 m/t | $19/20.00 | Up $1.00 | X |
| Brazil to Japan: 55,000 m/t | $21/22.00 | Up $1.00 | X |
| Brazil to Europe: 30,000 m/t | $25/26.00 | Up $1.00 | X |
| Brazil to Morocco: 25/30,000 m/t | $25/26.00 | Up $2.00 | X |
| Brazil to Saudi Arabia 30/40,000 m/t | $39/40.00 | Up $2.00 | X |
| Brazil to Turkey/Egypt: 50,000 m/t | $22/23.00 | Up $1.00 | x |
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| Australia to China: 40-55,000 m/t – round trip | $18.50/19.00 | Up $1.00 | X |
| Australia to Japan: 40-55,000 m/t – round trip | $19/19.50 | Up $1.00 | x |
| Australia to Saudi Arabia: 40-55,000 m/t | $21/22.00 | Steady | x |
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| Ukraine to China | $21/22.00 | Steady | x |
| Black Sea to East Med: 30,000 m/t (3,000 disch) | $23/24.00 | Steady | X |
| Ukraine to East Med: coaster (1,000 disch) | $24/25.00 | Steady | X |
| Black Sea to Egypt: 40/50,000 m/t – (6,000 disch) | $10/11.00 | Up $1.00 | X |
| Ukraine to Egypt: coaster 3,000 m/t (1,000 disch) | $24/25.00 | Steady | X |
| Black Sea to Iraq: 50,000 m/t (4,000 disch) | $26/27.00 | Up $1.00 | X |
| Black Sea to Morocco: 30,000 m/t (3,000 disch) | $21/22.00 | Steady | X |
| Black Sea to Spain: 40/50,000 m/t (8,000 disch) | $13/14.00 | Up $2.00 | X |
| Black Sea to Jordan: 50,000 m/t (4,000 disch) | $17/18.00 | Steady | X |
| Black Sea to Saudi Arabia – Jeddah – 50k | $20/21.00 | Steady | X |
| Black Sea to South Africa – 30,000 m//t | $28/29.00 | Up $1.00 | X |
| Black Sea to Tunisia/Algeria: 30,000(5,000 disch) | $17/18.00 | steady | x |
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| Baltic Dry Index | 609 | Up 22 | x |
| Baltic Capesize Index | 913 | Down 14 | X |
| Baltic Panamax Index | 585 | Up 39 | X |
| Baltic Supramax Index | 583 | Up 28 | x |
| Baltic Handisize Index | 329 | Up 18 | x |
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FOB port or location specified. Prices in US$, in metric tons:
All shipments in bulk grain vessels unless stated otherwise
(NOLA is New Orleans, Louisiana, USA.)
ALL PRICES ARE FOR July/September 2016
| Wheat, USA Soft Red Winter, NOLA | USD 198/202 | X |
| Wheat, USA Hard Red Winter 12 protein | USD 198/200 | x |
| Wheat, Ukraine 11.5 pro, 30,000+ m/t | USD 173/176 | x |
| Wheat, Russia 12.5 pro, 30,000+ m/t | USD 176/180 | x |
| Wheat, Romania 12.5 pro | USD 178/181 | x |
| Wheat, Superior, France, Rouen | USD 177/179 | x |
| Wheat, Medium, France, Rouen | USD 176/178 | x |
| Wheat, milling, 12.0%, Argentina, upriver | USD 206/209 | x |
| Wheat, feed, Black Sea | USD 165/169 | x |
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| Barley, France, Rouen port | USD 152/155 | x |
| Barley, feed, Argentina | USD 150/156 | x |
| Barley, feed, Black Sea, 30,000+ | USD 154/158 | x |
| Barley, feed, USA Pacific Northwest | USD 190/195 | x |
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| Corn, FOB NOLA USA | USD 184/190 | x |
| Corn, FOB USA Pacific northwest | USD 185/189 | x |
| Corn, CNF Asia, USA #2 | USD 217/220 | x |
| Corn, FOB Argentina port, upriver | USD 183/186 | x |
| Corn, FOB Brazil port | USD 186/190 | x |
| Corn, FOB Black Sea, 30,000+ m/t | USD 198/202 |
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| Corn, FOB France | USD 192/197 | x |
| Corn, FOB Romania | USD 201/206 |
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| Sorghum, FOB Texas | USD 186/188 | x |
| Sorghum, FOB Argentina port | USD 165/169 | x |
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| Soymeal, 48% protein, FOB NOLA | USD 438/444 | x |
| Soymeal, 48% protein, USA, Rotterdam | USD 470/476 | X |
| Soymeal, 46.5 pro, USA CNF Asia | USD 480/484 | x |
| Soymeal, Argentina, Rotterdam | USD 442/450 | x |
| Soymeal, 47% pro, FOB Argentina | USD 415/420 | X |
| Soymeal, 48% protein, Brazil, Rotterdam | USD 444/452 | X |
| Soymeal, FOB Brazil | USD 414/420 | x |
| Soymeal, 48% protein, India FAQ | No offers | x |
| Soybeans, FOB NOLA | USD 423/427 | x |
| Soybeans USA #2, CNF Asia | USD 472/479 | x |
| Soybeans, Argentina, FOB | USD 429/431 | x |
| Soybeans, Brazil, FOB | USD 459/463 | x |
| Soybeans, Black Sea | USD 440/445 | x |
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| Corn Gluten Meal, USA FOB NOLA | USD 615/625 m/t | x |
| Corn Gluten Meal, USA CNF Asia, cont. | USD 745>>740 m/t | X |
| Corn Gluten Meal, CNF Egypt | USD 775>>765 m/t | X |
| Corn Gluten Feed, USA FOB NOLA | USD 150/155 m/t | x |
| DDGS corn, 35 profat, USA FOB NOLA | USD 225>>210 m/t | x |
| DDGS corn, 35 profat, USA CNF Asia, cont | USD 251>>239 m/t | x |
Much like the grain markets, the corn by-product markets were somewhat confused as the week came to an end. The new UK/EU situation rattled currency markets and pushed the US$ up against most currencies. US export DDGS prices were steady to higher or steady to lower, depending on who you are talking to. It was the same with US domestic prices where some areas report higher DDGS prices while others were lower. Perhaps it will just take a little longer to adjust to the lower corn prices. With corn down by about USD 20 m/t and soymeal down by USD 30 m/t, even strong export demand should not be able to keep corn by-products from moving lower.
Most of the USDA weekly price reports are issued earlier in the week so don't as yet take into account the large drop in corn and soymeal prices this week. But the USDA prices and the export prices should all be lower next 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 430/440 m/t CNF Asia USD 460/470 m/t CNF Asia USD 470/480 m/t CNF Asia |
| Paraguay Meat &Bone meal, 45% protein | USD 430/440 m/t CNF Asia |
| Australian MBM 45 protein Australian MBM 50 protein Australian Feathermeal, 80 protein Australian Poultry Meal, pet food | USD 470/480 m/t CNF Asia USD 520/530 m/t CNF Asia USD 470/490 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 520/540 m/t CNF Asia USD 480/500 m/t CNF Asia USD 620/640 m/t CNF Asia USD 770/800 m/t CNF Asia |
Reports say that buying demand for animal proteins from Asia was quite strong this week but any strength this week will probably not hold due to the large drop in the prices for vegetable proteins. Supplies of animal proteins from both Australia and New Zealand are said to be tight so this may help to limit any market price weakness in the short term.
USA export prices were also up on the week but this will be tough to carry into next week unless there is a rally in US soymeal. Some reports at the end of the week are saying that USA domestic animal protein prices could move higher as the supply is tight, especially for meat and bone meal.
It will be interesting to see what happens this coming week once the Brexit situation is factored into more markets. Brexit certainly seemed to shake the grain markets and to Dow Jones but can it upset animal proteins – one never knows.
A little info on China, total imports of meat and bone meal to end of May 2016 were 90,800 m/t with 52,700 m.t coming from the USA, 21,800 m/t from Uruguay, 8,300 m/t from Australia, 4,400 m/t from New Zealand and 3,500 m/t from Argentina.
SECTION 2 --- FISHMEAL COMMENTS AND PRICES: PERUVIAN
Fishing kicked off in the north of Peru on the 18th and in the first few days averaged about 20,000 m/t per day with just 175 or so vessels per day, on average, out fishing. Meanwhile, in the south of Peru about 40 percent of the 380,000 m/t quota has now been landed with the fishing period to end on June 30 – unless it is extended. However, for the south, there would normally be a new quota starting on July 1st so an extension does not seem to likely.
There seems to be no current trading at all in Peruvian fishmeal, as sellers are waiting to see how the early catch progresses while buyers are waiting for a serious drop in prices. Much will really depend on the catch as if is continues at only 20,000 m/t per day it would take 90 day to land the quota and we probably only have 45 days or so, certainly not 90 days.
There were some comments from the experts this week that if the quota does not look to be able to be fully landed then there is probably little chance of a major price drop. It is all going to depend on the daily catch levels and the number of expected fishing days left. It is all just a matter of mathematics.
There was some discussion in the trade this week about when the fish will spawn and when fishing may have to be stopped due to spawning – looks like it is all up to momma anchovy.
On the price side, it does look like estimated prices have dropped by USD 50 to 100 m/t but these new prices are largely estimates as little business has been reported. Good northern fishing should mean weaker prices but poor fishing will keep prices steady.
One more bit of information, China Jan/May fishmeal imports totaled 417,000 m/t with 209,000 m/t from Peru, 39,000 m/t from Vietnam, 34,500 m/t from Russia, 33,600 m/t from USA, 30,300 m/t from Thailand 20,700 m/t from Chile and 15,100 m/t from Ecuador – these are all the major origins.
European fishmeal prices – FOB North German port.
| Type | Protein % | Price per m/t USD |
| Herring fishmeal | 72% protein | 1,910 |
| Danish fishmeal | 64% protein | 1,510 |
| Peru fishmeal | 64% protein | 1,610 |
| Chile fishmeal | 67% protein | 1,710 |
| Iceland fishmeal | 70% protein | 1,950 |
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 | 1650/1700 m/t |
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| 65/66 protein | 1670/1690 m/t |
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| 67% protein standard steam | 1720/1740 m/t | No offers |
| 67% protein 150 TVN | 1770/1790 m/t | No offers |
| 67% protein 120 TVN | 1800/1820 m/t | No offers |
| 67% protein 1000 hist, 120 TVN | 1830/1850 m/t | 1830/1850 |
| 68% protein 500 hist, 120 TVN | 1850/1900 m/t | 1850/1900 |
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| Fish oil, crude bulk | 2200/2250 | 1650/1700 |
| Fish oil, crude drums | 2350/2400 |
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| Fish oil, flexi tank | 2450/2500 |
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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
