Hammersmith Trade Services A division of Hammersmith Marketing Ltd.

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1 Page 1 of 6 WEEKLY FEED GRAIN AND PROTEIN REPORT September 09, 2016 week 36 Corporate Head Office: Suite 200B, Centre of Commerce, One Bay Street, PO Box N3944, Nassau, Bahamas. tradegroup@hammersmith.biz WWW: hammersmithltd.blogspot.com SKYPE: bacon39a Representative Office: Mobile: Fax: Traverse Du Cheval Blanc, St Remy de Provence, France NOTE: This week s report is being issued one day early as I will be travelling most of Saturday all info has been updated to the best available info as of early Friday with most grain/protein prices reflecting Thursday night prices. SECTION 1: US FEED GRAINS and VEGETABLE AND ANIMAL PROTEIN With Monday having been a holiday in the USA and this report coming out a day early this week, the report really only covers about a threeday period in the grain markets in the USA. Corn prices in the US moved higher this week pushed up by possible corn harvest delays due to wet weather in the US corn belt. Of course there is also concern over what the USDA WASDE numbers will say on Monday and this concern has caused some futures traders to cover their short positions. Covering shorts tends to move prices a little higher or much higher depending on how many shorts there are to cover. In the past couple of weeks, we have seen a number of private crop yield forecast some were lower than the last USDA numbers and some were higher, so we have no idea where the yields will be. But we will certainly know what the USDA thinks on the 12 th. Soybeans and soymeal have not been too exciting this week with prices not changing very much either in cash or futures. For soybeans, there is still a premium to be paid in the cash market for old crop soybeans, about USD 5 or 6 m/t, but this will disappear as new crop beans appear. The many private sector yield numbers seem to expect the USDA to raise their yield estimates as all tend to be a little higher than the last USDA yield forecast. However, since everyone expects soybean export demand to be very strong, a bigger soybean crop may not be any problem at all. It is also said by most experts that soybean ending stocks could be lower than previous USDA forecasts which would tend to push prices higher. Crop condition USA and France Condition USA Sep 07, 2016 Very poor Poor Fair Good Excellent Corn Soybeans Sorghum Condition France Sep 06, 2016 Very poor Poor Fair Good Excellent Wheat

2 Page 2 of 6 WEEKLY FEED GRAIN AND PROTEIN REPORT September 09, 2016 week 36 Winter barley Durum wheat Spring barley Corn and France AgriMer The condition of the France corn crop is dropping due to the continued very hot, very dry weather in much of the country. There was no update on the what or barley crops issued this week. Estimated Bulk Grain freight in USD per m/t, basis heavy grains US Gulf to Europe: 60/70,000 (10,000 disch) $15/16.00 Up $0.50 X US Gulf to Spain: 30,000 m/t (5,000 disch) $22/23.00 Steady x US Gulf Israel: 50,000 MT $20/21.00 Down $1.00 X US Gulf to Egypt: Panamax(6,000 disch) $19/20.00 Down $1.00 X US Gulf Turkey: 50,000 $21/22.00 Down $1.00 X US Gulf Morocco: 30,000(5,000 disch) $33/34.00 Steady X US Gulf Nigeria: 30,000 m/t $49/50.00 Up $1.00 X US Gulf other Med: 30,000 MT(5,000 disch) $33/34.00 Steady X US Gulf Japan: Panamax $28/29.00 Up $1.00 X US Gulf China: Panamax $27/27.00 Up $1.00 X US PNW South Africa 40,000 m/t $34/35.00 Up $2.00 X US PNW Japan: Panamax $16/17.00 Steady X US PNW China: Panamax $15/16.00 Steady X US East Coast Egypt: Panamax $43/44.00 Steady x US East Coast Nigeria: Handisize $48/49.00 Steady x France/Germany to Algeria: 30,000 m/t(3,000 disch) $25/26.00 Down $1.00 X France/Germany to Egypt: 50,000 m/t (10,000 disch) $24/25.00 Steady X France/Germany to Jordan: 35/45,000 m/t (4,000 disch) $32/33.00 Steady X France/Germany to Morocco: 30,000 m/t (3,000 disch) $24/25.00 Down $1.00 X France/Germany to Saudi Arabia: 50/60,000 $34/35.00 Steady X France/Germany to South Africa: 30,000 m/t $34/35.00 Steady X France/Germany to Yemen: 30,000 m/t $51/52.00 Steady X Argentina to Algeria: 25/30,000 m/t(3,000 disch) $26/27.00 Steady x Argentina to China: 50,000 m/t, with topoff $27/28.00 Steady X Argentina to Japan: 50,000 m/t, with topoff $29/30.00 Steady x Argentina to Egypt: 50,000 m/t $24/25.00 Steady X Argentina to Europe: 50/60,000 m/t $26/27.00 Steady X Argentina to Morocco: 25/30,000 m/t(3,000 disch) $25/26.00 Steady X Argentina to Saudi Arabia: 25/30,000 m/t $42/43.00 Up $1.00 X Argentina to South Africa 25/30,000 m/t (3,000 disch) $25/26.00 Steady x Argentina to Spain: 30,000 m/t $27/28.00 Steady x Argentina to Tunisia: 25/30,000 m/t (3,000 disch) $26/27.00 Steady x Brazil to Algeria: 25/30,000 m/t $27/28.00 Steady x Brazil to China: 55,000 m/t $22/23.00 Up $1.00 X Brazil to Japan: 55,000 m/t $24/25.00 Up $1.00 x Brazil to Europe: 30,000 m/t $25/26.00 Steady x Brazil to Morocco: 25/30,000 m/t $23/24.00 Steady x

3 Page 3 of 6 WEEKLY FEED GRAIN AND PROTEIN REPORT September 09, 2016 week 36 Brazil to Saudi Arabia 30/40,000 m/t $39/40.00 Steady x Brazil to Turkey/Egypt: 50,000 m/t $25/26.00 Steady x Australia to China: 4055,000 m/t round trip $19.50/20.00 Steady X Australia to Japan: 4055,000 m/t round trip $20.00/20.50 Steady X Australia to Saudi Arabia: 4055,000 m/t $23/24.00 Steady X Ukraine to China $26/27.00 Up $1.00 x Black Sea to East Med: 30,000 m/t (3,000 disch) $26/27.00 Steady X Ukraine to East Med: coaster (1,000 disch) $25/26.00 Steady X Black Sea to Egypt: 40/50,000 m/t (6,000 disch) $11/12.00 Steady X Black Sea to Egypt: 30,000 m/t $12/13.00 Steady X Ukraine to Egypt: coaster 3,000 m/t (1,000 disch) $25/26.00 Steady X Black Sea to Iraq: 50,000 m/t (4,000 disch) $27/28.00 Steady X Black Sea to Morocco: 30,000 m/t (3,000 disch) $22/23.00 Steady X Black Sea to Spain: 40/50,000 m/t (8,000 disch) $15/16.00 Steady X Black Sea to Jordan: 50,000 m/t (4,000 disch) $19/20.00 Up $1.00 X Black Sea to Saudi Arabia Jeddah 50k $24/25.00 Up $1.00 X Black Sea to South Africa 30,000 m//t $31/32.00 Steady X Black Sea to Tunisia/Algeria: 30,000(5,000 disch) $17/18.00 Steady X Baltic Dry Index 792 Up 72 X Baltic Capesize Index 1478 Up 424 x Baltic Panamax Index 655 Up 11 X Baltic Supramax Index 694 Down 27 x Baltic Handisize Index 420 Down 12 x FOB port or location specified. Prices in US$, in metric tons: All shipments in bulk grain vessels unless stated otherwise (NOLA is New Orleans, Louisiana, USA.) ALL PRICES ARE FOR October/December 2016 Wheat, USA Soft Red Winter, NOLA USD 183/190 X Wheat, USA Hard Red Winter 12 protein USD 202/207 x Wheat, Ukraine 11.5 pro, 30,000+ m/t USD 158/162 X Wheat, Russia 12.5 pro, 30,000+ m/t USD 168/171 X Wheat, Romania 12.5 pro USD 171/174 X Wheat, Superior, France, Rouen USD 183/185 X Wheat, Medium, France, Rouen No prices X Wheat, milling, 12.0%, Argentina, upriver USD 190/194 X Wheat, feed, Black Sea USD 156/160 X Barley, France, Rouen port USD 152/155 X Barley, feed, Argentina USD 162/166 x Barley, feed, Black Sea, 30,000+ USD 152/156 x Barley, feed, USA Pacific Northwest USD 177/181 x Corn, FOB NOLA USA USD 164/170 X Corn, FOB USA Pacific northwest USD 184/188 x

4 Page 4 of 6 WEEKLY FEED GRAIN AND PROTEIN REPORT September 09, 2016 week 36 Corn, FOB Argentina port, upriver USD 177/180 x Corn, FOB Brazil port USD 188/191 x Corn, FOB Black Sea, 30,000+ m/t USD 164/167 x Corn, FOB France USD 182/186 x Corn, FOB Romania USD 168/171 x Sorghum, FOB Texas USD 172/175 x Sorghum, FOB Argentina port USD 160/165 x Soymeal, 48% protein, FOB NOLA USD 387>>381 x Soymeal, 48% protein, USA, Rotterdam USD 412>>406 x Soymeal, Argentina, Rotterdam USD 383/387 x Soymeal, 47% pro, FOB Argentina USD 364/367 X Soymeal, 48% protein, Brazil, Rotterdam USD 380/384 X Soymeal, FOB Brazil USD 361/364 x Soymeal, 48% protein, India FAQ USD 540/550 x Soybeans, FOB NOLA USD 406>>402 x Old crop to new crop Soybeans, Argentina, FOB USD 413/416 X Soybeans, Brazil, FOB USD 410/413 x Soybeans, Black Sea USD 385/390 x Corn Gluten Meal, USA FOB NOLA USD 590/600 m/t x Corn Gluten Meal, CNF Egypt USD 665/670 m/t x Corn Gluten Feed, USA FOB NOLA USD 155/160 m/t x DDGS corn, 35 profat, USA FOB NOLA USD 184/188 m/t x There was very little change in export prices this week, at least for DDGS where export prices are almost unchanged from last week. However, in the US domestic market DDGS prices are quoted as being lower in most regions the average for the US is about USD 4 to 5 per ton lower. This drop in domestic prices, if it continues, should be seen in the export prices next week. Depending on who you talk to, the CGM prices were also lower on the week with average seeming to be about USD 15 per ton lower some say even more. The USDA reported average price change shows a drop of only about USD 4 m/t. Corn gluten feed was much the same as CGMwith prices down by about USD 4 m/t basis the USDA average prices. With corn prices up this week and the USDA report due next week then we may not see any further weakness in these byproduct markets but much depends on what the USDA has to say. Container shipments, minimum 200 m/t Argentina Meat & Bone meal, 45/50 protein USD 430/450 m/t CNF Asia Argentina poultry meal, 57/60 protein USD 560/570 m/t CNF Asia Argentina feathermeal, 78/80 protein USD 460/470 m/t CNF Asia Paraguay Meat &Bone meal, 45% protein USD 410/420 m/t CNF Asia Australian MBM 45 protein Australian MBM 50 protein Australian Feathermeal, 80 protein Australian Poultry Meal, pet food USA Meat & Bone meal, 50 protein USA Feathermeal, 80 protein USD 450/460 m/t CNF Asia USD 500/520 m/t CNF Asia USD 550/560 m/t CNF Asia USD 790/810 m/t CNF Asia USD 490/510 m/t CNF Asia USD 500/520 m/t CNF Asia

5 Page 5 of 6 WEEKLY FEED GRAIN AND PROTEIN REPORT September 09, 2016 week 36 USA Poultry Meal, feed grade USA Poultry Meal, pet food grade USD 620/640 m/t CNF Asia USD 780/800 m/t CNF Asia Animal protein prices were lower this week in the major importing markets in Asia MBM was down by about USD 20 m/t, as much as USD 30 m/t some say. Trade reports say that domestic prices in both Australia and New Zealand are stronger than export prices. The same situation exists in Argentina where domestic prices are considerably higher than export prices which is limiting export supplies. Prices are also seen to be lower for feather meal and feed grade poultry meal with only pet food grade poultry meal able to hold its price level. USA domestic prices are lower on the week and this is bringing export prices lower. The very good slaughter numbers in the US are creating a situation where supplies are larger than demand which is moving prices lower in most areas of the US. There does not look like there is much to push prices higher in the short run but in years past USA prices did tend to move higher towards the end of the year as supply starts to drop at about the same time as demand is rising for winter feeding. SECTION 2 FISHMEAL COMMENTS AND PRICES: PERUVIAN The latest El Nino study that was published this week in Peru shows very little chance of any El Nino event over the next few months so the anchovies should be quite happy. According to MSI Ceres the futures sales of fishmeal look to be at about 110,000 m/t or perhaps higher with current unsold stocks probably at or below the 5,000 m/t level so, for now there is really nothing to buy in Peru. Reports say that fishmeal stocks in China are growing while prices are falling this is the off season for fishmeal consumption so stocks would normally be on the increase in advance of the next aqua season. The JCI China Feed Materials Conference is coming up September 22 and 23 and is followed a month later by the IFFO Bangkok Conference October 24 to 26. All the big guys in the business will probably be at both conferences so there may be additional Peru fishmeal business booked. MSI Ceres also said this week that the Peruvian fishmeal producers seem quite happy with the level of new quota business booked so far and don t seem to be rushing out to book additional orders. As we have seen many times in the past, it is never too good an idea to sell against an estimated quota as things are never quite as they seem. As to prices firm for what little is left and steady at the prices shown below for November/December business. European fishmeal prices FOB North German port. Type Protein % Price per m/t USD Cost per protein unit Herring fishmeal 72% protein 1, Danish fishmeal 64% protein 1, Peru fishmeal 64% protein 1,

6 Page 6 of 6 WEEKLY FEED GRAIN AND PROTEIN REPORT September 09, 2016 week 36 Chile fishmeal 67% protein 1, Iceland fishmeal 70% protein 1, 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 New crop prices for the Peru November fishing quota Price per m/t Chile port 65% protein 1310/1320 m/t 65/66 protein 1330/1340 m/t 67% protein standard steam 1360/1370 m/t 67% protein 150 TVN 1420/1440 m/t 67% protein 120 TVN 1470/1490 m/t 67% protein 1000 hist, 120 TVN 1520/1540 m/t 1520/ % protein 500 hist, 120 TVN 1570/1590 m/t 1570/1590 Fish oil, crude bulk 2100/ /1750 Fish oil, crude drums 2250/2300 Fish oil, flexi tank 2350/2400 Fish oil, Omega 3: 28%EPA/DHA 2700/2800 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