Hammersmith Trade Services a Division of Hammersmith Marketing Ltd

Hammersmith Trade Services A division of Hammersmith Marketing Ltd.

WEEKLY FEED GRAIN AND PROTEIN REPORT November 08, 2014

Representative Office: +33.9.7044.4881 Mobile: +33.6.8068.4564 Fax: +33.4.5774.7575 13+220 Quartier La Galine, D-99, Mas Martin, St Remy de Provence, 13210 France

Corporate Head Office: Suite 200B, Centre of Commerce, One Bay Street, PO Box N-3944, Nassau, Bahamas. Tel 1.242.322.6154 Email: [email protected] WWW: hammersmithltd.blogspot.com SKYPE: bacon39a Twitter: @bacon39a

Next week is Global Grain in Geneva and I will be there on behalf of the US Grains Council. I look forward to seeing a great many old friends wandering around the conference – please say hello if you spot me in the crowd.

SECTION 1: US FEED GRAINS -- VEGETABLE AND ANIMAL PROTEIN

So, here we are just a couple of day before the USDA WASDE report on Monday and the grain world is all excited once again. However, from the comments in the trade and the analysis reports at the end of the week there does not seem to be too much reason for excitement. Most experts feel that the US corn yield will be increased very slightly and the same with soybeans.

The US futures markets were lower for corn on Friday and a little higher for beans and soymeal so the market seems to be pointing the pricing lower for corn but higher for beans. The main reason for higher soybean prices is the level of export sales so far this year with sales running much further ahead of what is considered normal levels with 77% of the projected exports having been sold or shipped compared to the more normal level of around 65%.

The USA harvest is progressing very well with few delays but with cold and snow in the cards for Northern USA then the end of the harvest in North Dakota and Iowa could be delayed.

Again with soybeans, farmers seem to be holding stocks as much as they can which has resulted in export prices moving up quicker than the futures market would suggest. Prices for soybeans on the Mississippi river system are up by about USD 6 or 7 m/t which is certainly contrary to the drop in futures on the week of about USD 4 m/t -- this means that export prices are increasing at a faster level than futures prices, at least for now.

So, Monday will be the day and any WASDE surprises will set the price trends for the next while.

USA crop condition report – November 04, 2014 – all in percentages France crop condition as of October 30, 2014 – the latest report is not available due to technical problems in France

Very poor Poor Fair Good to Harvested excellent % USA crop: Corn 71 Soybeans 85 Sorghum 74 Spring Wheat 100 Winter Wheat 2 5 34 59 Planted 90%

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Hammersmith Trade Services A division of Hammersmith Marketing Ltd.

WEEKLY FEED GRAIN AND PROTEIN REPORT November 08, 2014

French crop : Very poor Poor Fair Good to excellent Corn 0 1 9 89 57 Wheat - soft Planted 77% Wheat – hard Planted 18% Barley - winter Planted 93%

Estimated Bulk Grain freight in USD per m/t, basis heavy grains

US Gulf to Europe: 60/70,000 (10,000 disch) $20.00 X US Gulf to Spain: 30,000 m/t(5,000 disch) $29/30.00 X US Gulf to Egypt: Panamax(6,000 disch) $30/31.00 Down $1.00 X US Gulf other Med: 25,000 MT(3,000 disch) $35/36.00 X US Gulf Israel: 50,000 MT $31/32.00 Down $1.00 X US Gulf Morocco: 25,000(3,000 disch) $35/36.00 X US Gulf Turkey: 50,000 $32/33.00 Down $1.00 X US Gulf Nigeria: 30,000 m/t $49/50.00 X US Gulf Yemen 35/45.000 $48/49.00 X US Gulf South Africa: 30,000 m/t $38/39.00 X US Gulf Japan: Panamax(10,000 disch) $45/46.00 Down $1.00 X US Gulf China: Panamax(8,000 disch) $44/45.00 Down $1.00 X US PNW Asia: 35/45,000 m/t $35/36.00 X US PNW Japan: 50,000+ m/t(10,000 disch) $30/31.00 X US PNW China: 50,000+ m/t(8,000 d1sch) $29/30.00 X US East Coast Egypt: Panamax $36/37.00 Up $1.00 X US East Coast Nigeria: Handisize $48/49.00 Down $1.00 x France/Germany to Algeria: 30,000 m/t(3,000 disch) $24/25.00 X France/Germany to Morocco: 30,000 m/t(3,000 disch) $25/26.00 X France/Germany to Jordan: 35/45,000 m/t(4,000 disch) $30/31.00 X France/Germany to Saudi Arabia: 50/60,000 $36/37.00 X France/Germany to Egypt: 50,000 m/t(10,000 disch) $25/26.00 X France/Germany to Yemen: 30,000 m/t $45/46.00 X France/Germany to South Africa: 30,000 m/t $35/36.00 x Argentina to Europe: 50/60,000 m/t $28/29.00 Up $2.00 x Argentina to Egypt: 50,000 m/t(10,000 disch) $31/32.00 x Argentina to Algeria: 25/30,000 m/t(3,000 disch) $32/33.00 x Argentina to Morocco: 25,000 m/t(3,000 disch) $30/31.00 x Argentina to Tunisia: 30,000 m/t $33/34.00 x Argentina to Saudi Arabia $41.00 x Argentina to South Africa 30,000 m/t(3,000 disch) $30/31.00 x Argentina to Spain: 30,000 m/t $31/32.00 x Argentina to China: 50,000 m/t, with top-off $39/40.00 x Brazil to Algeria: 25,000 m/t $28/29.00 X Brazil to China: 55,000 m/t $33/34.00 X Brazil to Turkey/Egypt: 50,000 m/t $24/25.00 X Brazil to Morocco: 30,000 m/t $26/27.00 X Brazil to Saudi Arabia $41/42.00 X Brazil to Europe $22/23.00 X Black Sea to Spain: 30,000 m/t(5,000 disch) $19/20.00 x Black Sea to Morocco: 30,000 m/t(3,000 disch) $21/22.00 x

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Hammersmith Trade Services A division of Hammersmith Marketing Ltd.

WEEKLY FEED GRAIN AND PROTEIN REPORT November 08, 2014

Black Sea to Tunisia/Algeria: 30,000(5,000 disch) $20/21.00 Up $1.00 x Black Sea to East Med: 30,000 m/t(3,000 disch) $15/16.00 x Black Sea to East Med: coaster $44/46.00 Up $1.00 x Black Sea to Egypt: coaster 3,000 m/t $45/47.00 Up $1.00 x Black Sea to Egypt: 40/50,000 m/t – (6,000 disch) $13/14.00 x Black Sea to Saudi Arabia – Jeddah – 50k $24/25.00 x Black Sea to China $35/37.00 New x Baltic Dry Index 1437 Up 9 x Baltic Capesize Index 3661 Up 109 x Baltic Panamax Index 1183 Down 50 x Baltic Supramax Index 881 Down 11 x Baltic Handisize Index 454 Down 13 x *** see sources note

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 NOV 2014/JAN 2015 UNLESS STATED OTHER WISE

Wheat, USA Soft Red Winter, NOLA USD 252>>248 X Wheat, USA Hard Red Winter 12 protein USD 275>>272 x Wheat, Ukraine 11.5 pro, 30,000+ m/t USD 233/240 X Wheat, Russia 12.5 pro, 30,000+ m/t USD 249/257 X Wheat, Romania USD 250/255 x Wheat, soft milling #1, France, Rouen USD 219/221 x Wheat, soft milling #2, France, Rouen USD 213/216 x Wheat, milling, Argentina, upriver USD 245/255 x Wheat, feed, Black Sea USD 205/210 x Wheat Bran, Black Sea USD 190/200 X

Barley, France, Rouen port USD 196/200 x Barley, feed, Argentina, upriver USD 195/205 x Barley, feed, Black Sea, 30,000+ USD 208/213 x Barley, feed, USA Pacific Northwest USD 240/245 x

Corn, FOB NOLA USA USD 193>>189 x Corn, FOB USA Pacific northwest USD 207>>204 x Corn, FOB Argentina port, upriver USD 179/184 x Corn, FOB Brazil port USD 179/184 x Corn, FOB Black Sea, 30,000+ m/t USD 176/182 X Corn, FOB France USD 181/192 x Corn, FOB Romania USD 180/184 x Sorghum, FOB Texas USD 243>>239 x Sorghum, FOB Argentina port USD 155/160 x

Soymeal, 48 protein, FOB NOLA USD 518>>502 x Soymeal, 48 protein, USA, Rotterdam USD no prices x Soymeal, Argentina, Rotterdam USD 506/513 x Soymeal, 47 pro, FOB Argentina USD 465/474 x Soymeal, 48 protein, Brazil, Rotterdam USD 494/599 x Soymeal, FOB Brazil USD 460/466 x

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Hammersmith Trade Services A division of Hammersmith Marketing Ltd.

WEEKLY FEED GRAIN AND PROTEIN REPORT November 08, 2014

Soymeal, 48 protein, India FOB USD 630/640 x Soybeans, FOB NOLA USD 439/443 x Soybeans, Argentina, FOB USD 406>>393 x Soybeans, Brazil, FOB USD 460>>450 x Soybeans, Rotterdam USD 470>>445 x Soybeans, Black Sea USD 395/410 x

Corn Gluten Meal, USA FOB NOLA USD 700/710 m/t x Corn Gluten Feed, USA FOB NOLA USD 150/155 m/t x DDGS corn, 35 profat, USA FOB NOLA USD 181/185 m/t x DDGS corn, 35 profat, USA CNF Asia USD 222/228 m/t x *** see sources note

I am not too sure on the price shown this week for corn gluten feed. In a week where corn was only down by about USD 4 m/t the drop in CGF prices seems too high – also, some sources do show CGF prices at levels about USD 15 m/t higher.

DDGS prices seemed to be very hard to tie down this week with some sellers moving prices higher by as much as USD 10 m/t while others were steady in their prices. One suspects that the very wide range in prices late in the week is due mainly to the USDA WASDE report coming out on Monday and sellers really don’t want to do much new business in advance of the report – perhaps they are hoping for a bullish report and higher prices.

On the shipping side of things, most container companies have announced container freight increases and buyers could be looking at CNF prices moving up by about USD 10 m/t in coming weeks as the new container rates come into place.

Not surprisingly, corn gluten meal prices were higher this week as the rollover effect from fishmeal hits the protein market. CGM works quite well in some aqua diets versus fishmeal and with fishmeal now at sky-high levels end-users are trying to maximize their use of all other proteins. CGM prices should stay quite firm as long as fishmeal prices remain high.

USA exports – January to September 2014 – in m/t - major destinations

Corn Gluten Feed Corn Gluten Meal DDGS – Distillers Dried Grains

Canada 45,900 261,200 Chile 119,400 China 4,218,400 Columbia 22,000 53,200 122,400 Costa Rica 54,600 Egypt 15,800 128,100 137,900 El Salvador 44,600 Germany 30,300 Guatemala 42,200 Indonesia 124,100 236,300 Ireland 309,100 15,900 190,600 Israel 176,700 14,500 121,600 Japan 69,300 385,300 Malaysia 23,300

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Hammersmith Trade Services A division of Hammersmith Marketing Ltd.

WEEKLY FEED GRAIN AND PROTEIN REPORT November 08, 2014

Mexico 13,700 42,300 1,141,500 Morocco 28,500 71,800 New Zealand 44,500 Philippines 80,600 Portugal 16,800 South Korea 25,300 486,900 Spain 18,100 61,700 Taiwan 183,700 Thailand 24,700 235,900 Turkey 114,000 9,000 257,800 UK 23,000 113,800 Vietnam 487,900 USDA GATS November 2014

Container shipments, minimum 200 m/t

Argentina Meat & Bone meal, 45 protein USD 460/480 m/t CNF Asia Argentina poultry meal, 57/60 protein USD 630/640 m/t CNF Asia Paraguay Meat &Bone meal, 45 protein USD 420/430 m/t CNF Asia European MBM 45 protein USD 360/370 m/t CNF Asia European MBM 50 protein USD 400/415 m/t CNF Asia European Feathermeal, 75 protein USD 740/750 m/t CNF Asia European poultry meal USD 900/920 m/t CNF Asia Australian MBM 45 protein USD 510/520 m/t CNF Asia Australian MBM 50 protein USD 560/580 m/t CNF Asia Australian Feathermeal, 80 protein USD 740/760 m/t CNF Asia Australian Poultry Meal, pet food USD 950/970 m/t CNF Asia USA Meat & Bone meal, 50 protein USD 530/540 m/t CNF Asia USA Feathermeal, 80 protein USD 800/820 m/t CNF Asia USA Poultry Meal, feed grade USD 630/650 m/t CNF Asia USA Poultry Meal, pet food grade USD 1000/1030 m/t CNF Asia *** see sources notex

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

Meat and bone meal, USA, 50 protein USD 430/440 m/t Feathermeal 80 protein USA USD 670/690 m/t Poultry meal 57 protein, Eastern USA USD 500/520 m/t *** see sources note

Trade reports from Asia say the meat and bone meal prices are up by about USD 20 m/t but that with current market situation there could be room for prices to go another USD 30 to 40 m/t higher. However, buyers say that they are not paying these prices yet and that there is still product available at lower levels – it depends on the shipper’s stock position. The much higher price for fishmeal continues to push protein prices higher as buyers look at all other high protein alternatives. With just standard grade fishmeal up at USD 2,000 m/t it is easy to see why Asian buyers will be willing to pay a few dollars more for animal proteins. Pet food grade poultry meal was up very strongly in Asia as it sells directly against fishmeal.

Domestic prices in the USA have not changed much as whenever prices look to be moving higher some additional supply seems to come to market. However, many US experts are saying that animal protein prices will have to move higher in coming weeks and this will push up export prices.

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Hammersmith Trade Services A division of Hammersmith Marketing Ltd.

WEEKLY FEED GRAIN AND PROTEIN REPORT November 08, 2014

As you can see from the table below, if you exclude Canada and Mexico, USA MBM exports are all going 90% to Asia but with feathermeal Chile is a major importer, coming in second behind Indonesia.

USA exports – January to September 2014 – in m/t - major destinations

Meat and Bone Meal: Feathermeal Includes poultry and pork meal Canada 35,200 11,600 Chile 40,700 China 29,600 Ecuador 5,500 Guatemala 7,200 Holland 5,100 Indonesia 54,000 83,700 Malaysia 4,000 Mexico 14,300 Philippines 6,200 Thailand 4,600 USDA GATS November 2014

SECTION 2 --- FISHMEAL COMMENTS AND PRICES: PERUVIAN

There is nothing new to report, as yet, on the fishing situation for the next season in Peru. Results of analysis of the biomass will be seen later in November or perhaps early December. Most people in the fishing industry in Peru are anticipating a very small quote for the Dec/Jan period – but they all seem to expect at least some quota.

Based on trade comments read after the finish of the Vancouver IFFO meetings last week, the prices shown below could be well below where the Peruvian market is trading today. Prices for all grades are said to be close to what is shown below but with the 68 pro Super Prime perhaps as high as USD 2500 m/t.

Of course the problem is that when there is little left to sell and no definite new supply on the horizon, anything that is left in stock in Peru will go at a serious premium. However, fishmeal buyers are now looking at all alternatives for fishmeal supply as Peru has little or nothing and no one know when there will be more.

While it is true that the last of the available supply is going at very high prices, the future does not look too good for fishmeal producers in Peru – if they have no stock and no fishing quota then they are stuck with large fixed operating costs that cannot be offset against fishmeal sales. So, while current prices may be high, fishmeal producers and fishing fleets are facing lean times in the next few months.

Reports from Peru show that current fishmeal stocks are between 30,000 and 35,000 m/t, mainly of lower grade fishmeal.

I have taken a few facts from the MSI-Ceres presentation at the IFFO in Vancouver to show below – if anyone wants the full presentation they could ask MSI-Ceres at: [email protected]

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Hammersmith Trade Services A division of Hammersmith Marketing Ltd.

WEEKLY FEED GRAIN AND PROTEIN REPORT November 08, 2014

Six Peruvian producers do about 85% of all fishmeal business, they are: Diamante, Exalmar, Tasa, Austral, Copeinca/CFG and Hayduk – this is up from 63% in 2007 and is certainly trending higher.

Asia and Europe represent 88% of all Peru fishmeal exports: Asia 70.7%, Europe 18.0% plus Americas 9.5% and Australia 1.8%.

Looking at shipments, almost 100% of shipments to China are in containers, up from around 60% in 2006. For all fishmeal export shipments, about 15% are done in bulk vessels, mainly to Europe, with 85% overall in containers. Back in 2005 it was much closer to 50/50.

European fishmeal prices – FOB North German port.

Type Protein % Price per m/t USD Herring fishmeal 72 protein 2,030 Danish fishmeal 64 protein 1,795 Peru fishmeal 64 protein 2,115 Chile fishmeal 65 protein 2,165 Iceland fishmeal 70 protein 2,075 @Commodity3

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

65 protein 2060/2070 m/t 65/66 protein 2070/2080 m/t 67 protein standard steam 2080/2090 m/t 67 protein SD 150 TVN 2200/2210 m/t 67 protein SD 120 TVN 2300/2310 m/t 67 protein SD 1000 hist, 120 TVN 2370/2380 m/t 68 protein SD 500 hist, 120 TVN 2400/2420 m/t

Fish oil, crude bulk 2300/2350 Fish oil, crude drums 2500/2550 Fish oil, flexi tank 2450/2500 Fish oil, Omega 3: 28%EPA/DHA 3000/3100 *** see sources note

INFORMATION: gtee = guarantee, TVN = total volatile nitrogen, hist = histamine, FAQ = fair average quality (normally flame or hot air dried), SD = steam dried

*** sources for information for the Weekly Report: US Grains Council --- www.grains.org , International Grains Council – www.igc.int US Wheat -- www. uswheat .org , France Agrimer – www.france agrimer .fr EU DG Agri -- ec.europa.eu/ agriculture /index_fr.htm , Commodity 3 -- http://www.commodity3.com/ Newedge Group -- www. newedge .com , The Jacobsen Report -- https://www.thejacobsen.com MSI Ceres Peru -- http://www.msiceres.com , International Brokers Group S.A.C, Peru.

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Hammersmith Trade Services A division of Hammersmith Marketing Ltd.

WEEKLY FEED GRAIN AND PROTEIN REPORT November 08, 2014

And many, many, many more

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

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