Hammersmith Marketing Ltd - Grain Trading
WEEKLY FEED GRAIN AND PROTEIN REPORT May 26, 2012
(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
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SECTION 1: FEED GRAINS -- VEGETABLE AND ANIMAL PROTEIN
It was a down week for all the old crop versus the new crop but then it was down for almost everything this week. Old crop corn is still at about a USD 20 m/t premium to the new crop but that is about Usd 10 m/t closer than it was last week. Needless to say the closer one gets to the new crop the smaller the spread will be between old and new.
The USDA crop progress report last week was very supportive of a big crop in that it showed the crop was 96 percent planted and 77 percent of the crop was in excellent condition. It is still much too early to use this as a long-term projection of what the crop will be but for the week it was all very bearish news. The better the crop in the USA looks the more difficult it will be to expect any higher prices.
Also, the weather looks good in the USA and people are very excited about what could be a record harvest in August. Now that the crop is in the ground the farmers are looking for a nice mixture of lots of sun and rain at the right time so that we can all see a record crop level and, good for the buyers, lower corn prices.
Soybeans were lower on the week but strong on Friday, soymeal was also down on the week, but the market performance was not all that weak and the trend seems to still be for steady to higher prices. We are still in a position with soybeans and soymeal that the investment funds are very long and are looking for greater profits on higher prices.
And, as to the crop, by next Monday's report almost everything will be planted and there is also word that the winter wheat harvest is coming so early that there will be a good dose of double planting of soybeans on the harvested wheat fields.
There is a problem facing soybeans in some regions of the USA where rain is needed to get those wee seeds working away and the lack of rain is helping to hold up market prices. There is rain forecasted for over the weekend and into next week but the coverage may not be as wide spread as is needed.
With some decent rains there could be a little weakness in prices in the short-term but longer-term thongs still look steady to higher. From here on in the weather will be the number one factor for the USA crop and the prices will move with the weather (or with whatever China does on soybeans).
USDA Weekly USA Crop Planting Report – May 25 2012 (issued every Monday)
| Commodity | May 18, 2011 Planted % | May 25, 2012 Planted % | 5 year average Planted % |
| Corn | 87.0 | 96.0 | 81.0 |
| Sorghum | 38.0 | 50.0 | 35.0 |
| Soybeans | 46.0 | 76.0 | 42.0 |
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 263/272 |
| Wheat, USA Hard Red Winter 12 protein | USD 297/300 |
| Wheat, milling Black Sea 11.5 pro | USD 266/270 |
| Wheat, soft milling, France, Rouen | USD 282/284 |
| Wheat, milling, Argentina, up river | USD 242/247 |
| Wheat, feed, Black Sea | USD 264/269 |
| Barley, France, Rouen | USD 275/278 |
| Barley, feed, Argentina | USD 244/248 |
| Barley, feed, Black Sea | No prices |
| Corn, FOB NOLA USA | USD 259>>254 May/Aug new crop |
| Corn, FOB Argentina port, upriver | USD 232>>228 May/Aug new crop |
| Corn, FOB Brazil port | USD 228>>221 July/Sep new crop |
| Corn, FOB Black Sea | USD 262/267 |
| Corn, FOB France | USD 258/263 |
| Sorghum, FOB Texas, low tannin, GMO free | USD 263>>211 (Texas sorghum new crop) |
| Sorghum, FOB Argentina port, high tannin, GMO free | USD asked 171/bid 160 May/July new crop |
| Soymeal, 48 protein, FOB NOLA | USD 481>>460 |
| Soymeal, 44 protein, FOB NOLA | USD 470>>449 |
| Soymeal, Argentina, Rotterdam | USD 485/489 |
| Soymeal, 47 pro, FOB Argentina | USD 465>>454 Apr/July |
| Soymeal, 48 protein, Brazil, Rotterdam | USD 490/485 |
| Soymeal, FOB Brazil | USD 450/454 Jun/Aug |
| Soymeal, 48 protein, India FOB | USD 525/530 spot |
Bulk vessel shipments, minimum 5000 m/t
| Corn Gluten Feed, USA FOB NOLA | USD 205/210 m/t Jun/Jul |
| Corn Gluten Meal, USA FOB NOLA | USD 660/680 m/t Jun/Jul |
| DDGS, 36 profat, USA FOB NOLA | USD 273>>266 m/t May/Jul |
| DDGS, 36 profat, CNF Asian ports | USD 340>>333 m/t May/Jun |
The slide in corn prices and high ethanol production levels are finally having an effect on the price for DDGS as we see prices sliding a little lower. With the lower prices there has been considerable interest seen from buyers in Asia but bids are below current market and at the same time the domestic USA demand is good and that is keeping spot prices higher than June/July prices. According to some export buyers, the price of DDGS is still too high versus corn and that there needs to be a further drop in DDGS price before the export market will get too excited
Corn gluten meal and corn gluten feed are still a little higher than export buyers would like as the drop in corn prices has not caused much of a drop so far in there two co-products. Corn gluten meal will hold its strength quite well since, as discussed many times before, CGM is priced more for end protein content than for actual corn price – CGF is much more likely to follow the corn prices lower.
Container shipments, minimum 200 m/t
| Argentina Meat & Bone meal, 45 protein | USD 560/570 m/t CNF Asia |
| Brazil Meat & Bone meal, 45 protein | USD 530/550 m/t CNF Asia |
| Paraguay Meat & Bone meal, 45 protein | Sold out to September |
| USA Meat & Bone meal, 50 protein | USD 580/590 m/t CNF Asia |
| Europe Meat & Bone meal, 48/52 protein | USD 440/460 m/t CNF Asia |
| Australian MBM , 45 protein | USD 650/660 m/t CNF Asia |
| Australian MBM, 50 protein | USD 700/710 m/t CNF Asia |
| Australian Feathermeal | USD 720/730 m/t CNF Asia |
| USA Feathermeal, 80 protein | USD 740/760 m/t CNF Asia |
| USA Poultry Meal, pet food grade | USD 1000/1020 m/t CNF Asia |
| Australia Poultry meal, pet food grade | USD 960/980 m/t CNF Asia |
The following indications are at producer's factory, ex-works in bulk
| Meat and bone meal, USA, 50 protein | USD 455/460 m/t |
| Feathermeal 80 protein USA | USD 610/620 m/t |
| Poultry meal 57 protein, Eastern USA | USD 550/570 m/t, wide price range |
On the animal protein side of things, the continued ban on US MBM into Indonesia has caused western USA MBM prices to drop considerably as there are now few export markets and the production is looking for a domestic home. We now have a two level market with prices for MBM in the west being much lower than in the east of the USA --- so, export buyers from the East are at the top of the market while those in the West (and there are not many) benefit.
On the world market side of things, animal protein prices from OZ/NZ are still very, very strong as they try to supply the demand from the Indonesian buyers and this pushes the prices up for all Asia buyers as there are just not too many alternate origins for animal proteins -- especially any close by.
SECTION 2 --- FISHMEAL COMMENTS AND PRICES: PERUVIAN
Bad weather has made the fishing in Peru more difficult and daily catch levels have dropped quite a bit. There is now talk in the market that the total quota may not be caught this year due to the weather but it is much to early to think about that as there are still many weeks to go before the end of the fishing at July 31. There is still lots of time to catch up.
One item that I have not mentioned in recent weeks is all the talk about El Nino and when or if it will be another bad year or if we are currently in an El Nino --- water temperatures in Peru are not at normal levels, actually warmer than expected, and the fish are not in the regions where they are normally seen – a result of too much warm water. So, fishing is a tad more complicated this year than the last couple of years
There is also quite a bit of talk about China where it seems the consumption is picking up and stocks on hand could be getting down to more manageable levels and, according to market stories, there are some Chinese traders looking for additional supply for June/July shipment.
Not much new business in the last few days but prices are very firm with producers not giving an inch on prices and the few buyers who did not cover earlier are paying up.
The current production levels are not high enough to work down the oversold position and the market is still short close to 150,000 m/t of fishmeal (one trade reports says it is actually 250,000 m/t sold), which is certainly helping to keep prices very firm.
There does not seem to be any reason to expect lower prices at present but if the weather was to improve and the daily catch get back up to better levels then it is quite possible that the prices could dip a little from the current high levels --- after all prices did run up USD 100+ m/t very quickly.
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 | 1340/1350 m/t |
| FAQ 65 protein gtee | 1340/1350 m/t |
| FAQ 66 protein gtee | 1350/1360 m/t |
| FAQ 67 protein gtee | 1370/1380 m/t |
| | |
| 65/66 pro standard steam | 1400/1410 m/t |
| 67 protein standard steam | 1430/1440 m/t |
| 67 protein SD 150 TVN | 1470/1480 m/t |
| 67 protein SD 120 TVN | 1490/1500 m/t |
| 67 protein SD 1000 hist, 120 TVN | 1510/1520 m/t |
| 68 protein SD 500 hist, 120 TVN | 1530/1540 m/t |
| | |
| Fish oil .. crude bulk | 1600/1650 m/t |
| Fish oil – crude drums | 1700/1750 m/t |
| Fish oil – flexitank | 1650/1700 m/t |
| Fish oil – Omega 3 – 28%EPA/DHA | 2000/2200 m/t |
| | |
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 © 2012 Wayne S. Bacon
