Weekly report -- February 11, 2012

2012-02-11T16:27:00.001+01:00

Hammersmith Marketing Ltd - Grain Trading

WEEKLY FEED GRAIN AND PROTEIN REPORT February 11, 2012

(a Bahamas Corporation)

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

13-220 Route de Cavaillon, Quartier 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

A GAFTA Member Corporation

SECTION 1: FEED GRAINS -- VEGETABLE AND ANIMAL PROTEIN

The USDA report on Thursday was a bit of a non-event, after all the anticipation that builds in advance of the report there was not much in the way of surprises. On the corn side of things the Argentina and Paraguay production were dropped a little while Brazil remained unchanged. Some in the trade seemed to feel that both the Argentina and Brazil numbers should have been lower but most felt that they were about right. USA corn exports for the year were increased which resulted in a drop in year end stocks which was a little bullish but not enough to get the market too excited. Overall the world ending stocks on corn were reduced by about 2%.

So one could probably say that for corn this was a balanced report with not too much excitement in anyone direction but perhaps just a little more on the up side rather than the down side. Reading the trade reports after the report it would seem that most experts feel that corn prices will be steady to higher in coming weeks as no one seems to have a good reason to expect corn prices to drop.

On the soybean side of things, the feeling seems to be that the crops in Brazil and Argentina could very easily be smaller than projected and that in coming weeks this will become apparent. However, in the meantime most experts seem to feel that soybean prices can move lower through the first part of March as the March futures positions are liquidated but then, after March is all settled, soybean and soymeal prices are expected to move higher --- especially if there is any additional damage to the South American crops that has not been seen as yet.

It has been reported that the fourth shipment of four lots of feed wheat has been made from the UK to the USA where it seems that UK feed wheat has been more economic to some when compared to local feed corn prices. This seems to happen every couple of years when USA corn prices get high and East coast USA feed producers see an opportunity with feed wheat from Europe.

Lots of statistics in the report this week as all the final 2011 export stats were released on Friday. All of this information is available on the WWW on the FAS USDA GATS site, it is just a bit hard to find.

USA EXPORTS OF GRAINS TOTAL 2011 IN M/T -- MAJOR IMPORTERS

Country	All Wheat	Corn #2	Corn #3	Sorghum	Barley
Mexico	3,260,070	7,312,848	562,125	2,319,526
China		2,727,730
Egypt	2,489,363	2,326,046
Spain			83,000	296,825
Japan	3,685,418	1,569,418	10,488,622	250,594
Sudan				116,048
France				70,258
Morocco				64,075	36,670
Nigeria	3,631,547
Philippines	2,067,361
Israel		526,939		45,741
Iraq	1,501,505
Kenya				40,265
Netherlands				39,644
Peru	1,006,612
Italy				33,252
South Africa				14,120
Algeria					26,249
South Korea	1,395,827	1,475,980	4,427,930
Canada			176,368
Taiwan	963,129	2,412,165	131,006
Venezuela		832,521
Dominican Rep		711,324
Guatemala		672,127
Saudi Arabia		620,630

USA EXPORTS OF SOYBEANS AND SOYMEAL TOTAL 2011, IN M/T

Country	Soybeans	Soymeal
China	20,603,151
Mexico	3,158,106	1,453,609
Japan	1,785,254	357,001
Canada		1,077,766
Indonesia	1,691,673
Philippines		869,051
Taiwan	1,356,895
Egypt	581,838	107,835
Germany	554,509
South Korea	490,164	184,106
Spain	361,883
Malaysia	350,105	27,989
Thailand	335,144
Netherlands	317,808
Venezuela		636,387
Morocco		575,505
Dominican Rep		358,431
Guatemala		271,895

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 259/263 Mar/Jun
Wheat, USA Hard Red Winter 12 protein	USD 291/293 Feb/Mar
Wheat, milling Black Sea 11.5 pro	USD 281/285
Wheat, soft milling, France, Rouen	USD 280/283
Wheat, milling, Argentina, up river	USD 275/285
Wheat Bran, Ukraine	USD 150/165
Wheat, feed, Black Sea	USD 260/264
Barley, France, Rouen	USD 271/274
Barley, feed, Argentina	USD 257/262 Feb/Mar
Barley, feed, Black Sea	USD no prices

Corn, FOB NOLA USA	USD 284>>>275 Feb/Apr
Corn, FOB Argentina port, upriver	USD 264/266 Mar/May new crop
Corn, FOB Brazil port	USD 263/267 May/Jul new crop
Corn, FOB Black Sea	USD 270/275 Feb/Mar
Corn, FOB France	USD 267/274

Sorghum, FOB Texas, low tannin, GMO free	USD 284/286 Feb/Mar
Sorghum, FOB Argentina port, high tannin, GMO free	USD asked 220/bid 190 Apr/Jun new crop

Soymeal, 48 protein, FOB NOLA	USD 372/377
Soymeal, 44 protein, FOB NOLA	USD 361/366

Soymeal, Argentina, Rotterdam	USD 372/376
Soymeal, FOB Argentina	USD 342/348 Mar/June
Soymeal, 48 protein, Brazil, Rotterdam	USD 396/400
Soymeal, FOB Brazil	USD 352>>>347 Mar/Jun

Soymeal, 48 protein, India FOB	USD 375/380 spot

Bulk vessel shipments, minimum 5000 m/t

Corn Gluten Feed, USA FOB NOLA	USD 177/180 m/t Feb/Apr
Corn Gluten Meal, USA FOB NOLA	USD 540/545 m/t Feb/Apr

DDGS, 36 profat, USA FOB NOLA	USD 272>>>264 m/t Feb/Apr

Container shipments, minimum 200 m/t

DDGS, 36 profat, CNF Asian ports	USD 308/317 m/t Mar/Apr

Argentina Meat & Bone meal, 45 protein	USD 550/570 m/t CNF Asia
Brazil Meat & Bone meal, 45 protein	USD 440/450 m/t CNF Asia
Paraguay Meat & Bone meal, 45 protein	USD 390/400 m/t CNF Asia
USA Meat & Bone meal, 50 protein	USD 480/510 m/t CNF Asia
Australian MBM , 45 protein	USD 470/480 m/t CNF Asia
Australian MBM, 50 protein	USD 490/500 m/t CNF Asia
Europe Meat & Bone meal, 48/52 protein	USD 380/390 m/t CNF Asia
Feathermeal, USA, 80 protein	USD 545/560 m/t CNF Asia
Poultry Meal, feed grade, USA , 60 pro	USD 490/530 m/t CNF Asia

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

Meat and bone meal, USA, 50 protein	USD 325/340 m/t

Feathermeal 80 protein USA	USD 470/500 m/t
Poultry meal 57 protein, Eastern USA	USD 370/430 m/t, wide price range

The price for DDGS remains quite high for nearby shipments and, as reported previously, this is due to the reduced production levels for ethanol. With the margin for ethanol not being very attractive the producers are scaling back production, which limits the availability of DDGS, at least in the short-term. There has been a lot of export interest in DDGS but buyers don't want to pay the current high prices so are looking further out but are still bidding too low. As you can see from the export shipment report below Mexico and China are the big buyers for DDGS and that will remain the same for 2012, but we will see the shipments to all EU countries dropping due to GMO problems but shipments to Asia are expected to be even better than the 2011 levels. Actually DDGS exports in 2011 were down by about 1.4 million m/t of 2010 all due to the drop in business to China.

Corn gluten feed prices remain very low compared to 2011 prices but that does not seem to have attracted a great deal of new buying. Of course with all the EU countries unable to buy it does take away a very good share of last years buyers. Total export sales for 2011 were up by about 18% over 2010 but still well below the levels that were seen in 2006/2007. Too me, corn gluten feed looks like the best buy these days, if it fits the feed formulation. Unfortunately, in some regions it is still too expensive compared to wheat bran and other similar products.

Corn gluten meal export prices are steady this week which leave little to say. Total exports for 2011 were up by about 9% on the year, which if ok, but still are well below the levels of 2007/2008, about 25% down from those levels

USA EXPORTS OF CORN BY-PRODUCTS -- TOTAL 2011 IN M/T MAJOR IMPORTERS

COUNTRY	DISTILLERS DRIED GRAIN	CORN GLUTEN MEAL	CORN GLUTEN FEED
Ireland	177,048		317,085
China	1,389,068
Netherlands		14,084	242,232
United Kingdom	122,501		229,826
Israel	214,074		213,800
Spain	120,221		77,471
Morocco	168,284		75,073
Portugal			64,022
Mexico	1,780,736	63,404	35,582
Egypt	109,840	148,071	27,105
Indonesia	248,381	132,246
Chile	79,616	76,749
Canada	737,689	73,576
Columbia	87,797	46,349	14,007
Malaysia	59,912	40,183
Philippines	145,915
South Korea	295,134
Japan	301,234	29,790
Vietnam	499,523	26,386
Taiwan	235,226	23,711
Thailand	203.152	19,377

Animal protein prices in the USA were up in all sectors this week but this is more of a blip than a trend as the long-term prognosis seems to be for lower prices as USA feed use is expected to drop in coming months. One of the trade reports was saying that an expected drop in demand for animal protein in coming months could be related to increased use of DDGS --- hi-fat DDGS not the jazzy new low oil product. Feed blenders can use DDGS at a higher inclusion rate an avoid or reduce expensive animal proteins.

The experts seem to feel that animal proteins will track along quite well with what happens to soymeal in the next few weeks.

As a matter of interest the major importers of USA exports of MBM and poultry meal are: Indonesia, Mexico, Canada, Thailand, China and the Philippines in descending order.

SECTION 2 --- FISHMEAL COMMENTS AND PRICES: PERUVIAN

Very quiet in Peru these days with the major fishing season finished and only the small season in the south about to start. Most producers are doing their best to get the prices pushed up a little higher but buyers are not too willing to pay higher prices. The prices for the next few weeks will probably depend on how the fishing goes in the south if it is good then producers will have trouble raising prices but if it is bad then prices should move higher. Only one thing seems to be quite certain and that is that the prices are not expected to move lower.

Sorry that there is not a great deal to say about fishmeal this week but,with little to sell and most buyers fully covered, the market is very very dull at present. What we need is a good rumour to get things moving.

Just as a matter of info, it is estimated that the unsold stocks of fishmeal in Peru are probably around 65,000 m/t, perhaps a little higher. Also, not too much activity as yet in buyers looking to try to book for the next fishing season but that will come.

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	1040/1060 m/t
FAQ 65 protein gtee	1040/1060 m/t
FAQ 66 protein gtee	1060/1080 m/t
FAQ 67 protein gtee	1070/1090 m/t

65/66 pro standard steam	1060/1080 m/t
67 protein standard steam	1080/1100 m/t
67 protein SD 150 TVN	1160/1180 m/t
67 protein SD 120 TVN	1180/1200 m/t
67 protein SD 1000 hist, 120 TVN	1220/1230 m/t
67 protein SD 500 hist, 120 TVN	1250/1260 m/t

Fish oil .. crude bulk	1300/1350 m/t
Fish oil crude drums	1400/1450 m/t
Fish oil flexitank	1350/1400 m/t
Fish oil Omega 3 28%EPA/DHA	1600/2000 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

HAMMERSMITH MARKETING LTD

Weekly report -- February 11, 2012

Bulk vessel shipments, minimum 5000 m/t

Container shipments, minimum 200 m/t