Weekly report -- Jan 22, 2012

2012-01-22T13:48:00.000+01:00

Hammersmith Marketing Ltd - Grain Trading

WEEKLY FEED GRAIN AND PROTEIN REPORT January 22, 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

I spent most of this week in the Ukraine Kiev and Odessa and had a very informative trip thanks to the co-operation and assistance of traders, surveyors, Ukraine grain organizations and the USDA-FAS office in Kiev. It could have been a little warmer and perhaps a little less snow would have been better but then it was January in the Ukraine, so what can you expect.

SECTION 1: FEED GRAINS -- VEGETABLE AND ANIMAL PROTEIN

It was another up week for corn and soybeans, as we saw corn rise about USD 4 m/t while soybeans were up closer to USD 10 m/t and soymeal up by Usd 8 m/t or so.

The weather in South America was the major concern again this week, at least for soybeans, as the expected showers for the week did not seem to be as wide spread as had been forecasted or as had been hoped. There is also the comment that it is too late for rain to do much to help the crops in Argentina, especially the corn crop, while there does seem to be a chance that soybeans in South America will be benefit from some rain. Both Brazil and Argentina are forecasted to have good rains this weekend and into next week and overall the temperatures should not be scalding hot.

Soybeans and soymeal had a soft finish to the week, as traders are looking for markets to move lower early next week if the Argentina weather is as had been expected.

On the corn side of things we were up on the week and Friday finished higher but the new crop 2012 USA corn prices were lower as it is expected that the 2012 corn plantings will be bigger than 2011. There was also some good news for corn in the reported sale to Egypt, something that has not been seen for quite a while now as the Ukraine has owned the Egypt corn market for several months. USA CNF Egypt prices still look to be quite a bit higher than Ukraine CNF, so it is a little difficult to know why the sale was made except that the shipment could still be a long way off and at a time when the Ukraine stocks are gone and prices are much higher. It is still good to see some USA business to Egypt again.

Corn export sales for the week were quite good overall as were soybean exports; corn sales were up at 760K m/t while soybeans were just shy of one million m/t soymeal exports were also very good at about 180K m/t

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 251/255 Mar/Jun
Wheat, USA Hard Red Winter 12 protein	USD 288/290 Feb/Mar
Wheat, milling Black Sea 11.5 pro	USD 258/263
Wheat, soft milling, France, Rouen	USD 263/267
Wheat, milling, Argentina, up river	USD 250/253
Wheat Bran, Ukraine	USD 170/180
Wheat, feed, Black Sea	USD 245/248
Barley, France, Rouen	USD 264/267
Barley, feed, Argentina	USD 263/268 Feb/Mar
Barley, feed, Black Sea	USD 260/264

Corn, FOB NOLA USA	USD 267/270 Feb/Mar
Corn, FOB Argentina port, upriver	USD 256/259 Feb/May new crop
Corn, FOB Brazil port	USD 260/263 Feb/Apr new crop
Corn, FOB Black Sea	USD 250/254 Feb/Mar
Corn, FOB France	USD 256/265

Sorghum, FOB Texas, low tannin, GMO free	USD 276/278 Feb/Mar
Sorghum, FOB Argentina port, high tannin, GMO free	USD asked 215/bid 185 Apr/Jun new crop

Soymeal, 48 protein, FOB NOLA	USD 365/368 Dec/Jan
Soymeal, 44 protein, FOB NOLA	USD 354/357 Dec/Jan

Soymeal, Argentina, Rotterdam	USD 373/375 spot
Soymeal, FOB Argentina	USD 348/350 Feb/Mar
Soymeal, 48 protein, Brazil, Rotterdam	USD 393/395 spot
Soymeal, FOB Brazil	USD 349>>>330 Mar/Jun

Soymeal, 48 protein, India FOB	USD 355/360 spot

Bulk vessel shipments, minimum 5000 m/t

Corn Gluten Feed, USA FOB NOLA	USD 180/185 m/t Feb/Apr
Corn Gluten Meal, USA FOB NOLA	USD 530/540 m/t Feb/Apr

DDGS, 36 profat, USA FOB NOLA	USD 250/252 m/t Feb/Apr

Container shipments, minimum 200 m/t

DDGS, 36 profat, CNF Asian ports	USD 302/310 m/t Feb/Apr

Argentina Meat & Bone meal, 45 protein	USD 560/580 m/t CNF Asia
Brazil Meat & Bone meal, 45 protein	USD 455/465 m/t CNF Asia
Paraguay Meat & Bone meal, 45 protein	USD 430/450 m/t CNF Asia
USA Meat & Bone meal, 50 protein	USD 480/510 m/t CNF Asia
Australian MBM , 45 protein	USD 460/470 m/t CNF Asia
Australian MBM, 50 protein	USD 480/490 m/t CNF Asia
Europe Meat & Bone meal, 48/52 protein	USD 370/380 m/t CNF Asia
Feathermeal, USA, 80 protein	USD 535/550 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 320/340 m/t

Feathermeal 80 protein	USD 420/440 m/t
Poultry meal 57 protein, Eastern USA	USD 390/420 m/t, wide price range

With China on holidays for the next week or so the interest in export markets for DDGS has slowed considerably so it has been a little difficult to get a good feel for prices but it can be said that the DDGS export price does not seem to be moving any lower at present. Contrary to DDGS the prices for both corn gluten meal and corn gluten feed continue to slide a little lower. CGF export prices are quite weak due to the lack of demand from last year's major markets in the EU where importation has stopped due to GMO concerns. These days both CGF and CGM seem like quite a bargain as feed ingredients, at least compared to where their prices were only a few weeks ago.

With all there corn co-products there continue to be stories every week that Turkey will get their GMO approvals all passed and that shipments to Turkey can resume. However, even if Turkey does approve all the GMO events that they are reviewing, shipments will be very difficult as, like the EU, there are GMO corn events planted in the USA and South America that are not even being considered in Turkey as yet.

USA domestic animal protein prices were a little stronger this week with feathermeal and poultry meal leading the way as stronger domestic demand pushed prices up. Meat and bone meal prices were not as strong as feathermeal but did show increases in some regions. Export prices for both feathermeal and poultry meal did move higher in Asia but with Chinese holidays there was not a huge interest in buying animal proteins.

Some trade experts feel that feathermeal and poultry meal export prices will continue to move higher due to good demand and limited supplies.

With the EU looking more and more to relaxing some of the rules on the use of animal protein in feed rations in the EU, every sector of the feed industry is coming forward with comments. This week the EU feed industry association FEFAC has come out in support in principal for the use of processed animal protein in feed but have said that the first step should be the approval of animal proteins in fishfeed only until the EU has procedures in place to monitor the use in pig and poultry feed. Their suggestion for fishfeed use only is due to the dedicated production for most fishfeed and the very limited chance that there could be any cross mixing of animal proteins with other types of feed.

The changes in the regulations in the EU would allow: poultry meal to be fed to pigs, pork meal to be fed to poultry and both poultry meal and pork meal use for fishfeed. All use would be on a zero tolerance basis using PCR testing. FEFAC has also said that the zero-tolerance requirement is not a practical tolerance level.

USA export information was released last week and shows that the USA exports of animal protein products are up over 2010 with meat and bone meal (including poultry and pork meal) up by about 4% over 2010 but up 11% over 2009. 2011 feathermeal exports were up by 27% over 2010 and about 24% over 2009. For the first eleven months of 2011 the USA exported 271K m/t of meat and bone meal and 59K m/t of feathermeal.

SECTION 2 --- FISHMEAL COMMENTS AND PRICES: PERUVIAN

We are really getting down to the bitter end of the fishing season with both daily catch and fishing vessels moving lower every day. Looks like the average working vessels is only about 25 to 30 with a daily catch of about 3000 m/t. There is still a balance on the quota that is at about 80,000 m/t but it looks like there could be a small balance uncaught once the quota ends. However, as the daily numbers are not always 100% accurate it will take a few days to know exactly what was caught against quota according to official numbers.

Of course there is also the new fishing quota for the southern area of Peru that has yet to be announced but is expected to be around 500,000 m/t of fish for all of 2012.

China is now off on holidays for the Year of the Dragon, so nothing from that direction for about a week but looking at business so far it looks like there is a continued up-trend in China use of fishmeal and in their total imports from all origins. Consumption is expected to be up in 2012 over 2011 but still below what was seen in 2009 by about 10%.

Fishmeal prices in Peru have moved up this week as stocks are reported to be shrinking and various high-end grades are getting much more difficult to find. Trade estimates show that about 90K m/t are unsold, but it is very difficult to get an accurate number on stocks and even more difficult to know what grades of fishmeal are represented in the unsold lots.

According to trade stats there is a great deal of fishmeal on the way to China but with the small unsold stocks left in Peru there is not much concern about a lack additional short-term demand from China.

It does not look like there is any reason to expect Peru (or Chile) fishmeal prices to fall in the near future and with stocks in limited supply it would seem more likely that prices could move higher.

As a matter of info, Chinese officials have approved six Argentina producers to ship fishmeal and fishoil to China. Argentina authorities are expecting to be able to greatly increase export shipments to Asia as a result of this approval by China. Let me know if you want the names of the approved factories.

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 -- Jan 22, 2012

Bulk vessel shipments, minimum 5000 m/t

Container shipments, minimum 200 m/t