DDGS Weekly Market Report January 21 st, 2016

Transcription

1 DDGS Weekly Market Report January 21 st, 2016 INSIDE THIS ISSUE 1. General Comments 1. Ethanol Comments 2. DDGS Reference Prices 3. Ocean Freight Markets 3. Latest Export Figures (Calendar and Crop Year) 6. FOB US Gulf DDGS & Corn Prices 7. Council News General Comments: The trade reports that the market is actually currently tight in nearby slots as traders move to ship product before a perceived start date to the Chinese anti-dumping tariffs. January supply tightness has now moved into February, especially for those close to the container loading markets like Chicago. That nearby tightness is evident as container prices for DDGS to nine Asian markets this past week climbed an average (some markets higher than others) of $5.00 per container. Testing of the new U.S. corn crop shows that it is of a better quality, which means that mycotoxins are not a concern and thus the DDGS quality should be good. Meanwhile, the U.S. Department of Agriculture (USDA) is soliciting public comment through April 18 on how its standards and inspection process can be improved to boost exports of DDGS and other grains and products. U.S. corn crop shows that it is of a better quality, which means that mycotoxins are not a concern and thus the DDGS quality should be good. Ethanol Comments: At 1,003 million barrels, ethanol stocks were up again this past week as ethanol production has still not declined with the slower winter driving season. The weekly inventory is beginning to build and exports become more important in moving it as the price of gasoline gets lower. In its latest Short-Term Energy Outlook, the U.S. Energy Information Administration (EIA) predicted that U.S. ethanol production will average 970,000 barrels per day in both 2016 and That is a 0.6 percent increase over its December forecast of 960,000 barrels per day in Until the slowdown for the slower winter driving months, production was around one million barrels per day. The corn crop harvested this past fall and headed for ethanol plants tested at a higher quality than the average of the past four growing seasons. 1

2 Source: U.S. EIA Ethanol production margin for the Corn Belt are as follows: Illinois differential is $1.13 per bushel, in comparison to $1.21 the prior week and $1.57 a year ago. Iowa differential is $1.02 per bushel, in comparison to $1.12 the prior week and $1.29 a year ago. Nebraska differential is $1.26 per bushel, in comparison to $1.36 the prior week and $1.22 a year ago. South Dakota differential is $1.20 per bushel, in comparison to $1.33 the prior week and $1.60 a year ago. DDGS reference prices as per survey report (current week): DDGS Price Table: January 21, 2016 (USD/MT) (Quantity, availability, payment and delivery terms vary) Delivery Point Feb. Mar. Apr. Quality Min. 35% Pro-fat combined Barge CIF New Orleans FOB Vessel GULF Rail delivered PNW Rail delivered California Mid-Bridge Laredo, TX FOB Lethbridge, Alberta ft. Containers to South Korea (Busan) ft. Containers to Taiwan (Kaohsiung) ft. Containers to Philippines (Manila) ft. Containers to Indonesia (Jakarta) ft. Containers to Malaysia (Port Kelang) ft. Containers to Vietnam (HCMC) ft. Containers to Japan (Yokohama) ft. containers to Thailand (LCMB) ft. Containers to Shanghai, China KC & Elwood, IL Rail Yard (delivered Ramp)

3 Ocean Freight Market References: Bulk Freight Indices for HSS Heavy Grain, Sorghum and Soybeans* Route and Vessel Size Current Week Change from (USD/MT) Previous Report Remarks 55,000 U.S. Gulf-Japan $23.21 Down $1.25 Handymax at $24.50/MT 55,000 U.S. PNW-Japan $13.00 Down $0.50 Handymax at $14.00/MT 55,000 U.S. Gulf-China $21.50 Down $1.50 PNW to China $12.00 Down $0.50 North China 30,000 U.S. Gulf-Veracruz, México $12.25 Down $0.25 4,000 MT daily discharge rate 40-45,000 U.S. Gulf-Veracruz, $10.25 Down $0.50 Deep draft and 8,000 MT México per day discharge rate. 25/35,000 U.S. Gulf-East Coast $13.50 Down $0.25 West Coast Colombia at Colombia, from Argentina $25.00 Down $0.50 $ ,000 U.S. Gulf-Guatemala $20.25 Down $0.25 Acajutla/Quetzal - 8,000 out 26-30,000 U.S. Gulf-Algeria $27.00 Down $1.00 8,000 MT daily discharge $29.25 Unchanged 3,000 MT daily discharge 25-30,000 U.S. Gulf-Morocco $26.00 Down $1.00 5,000 discharge rate 55,000-60,000 MT 55,000 U.S. Gulf-Egypt $18.00 Down $1.00 St. Lawrence to Egypt PNW to Egypt $20.25 Down $1.00 $ ,000 U.S. Gulf-Europe- Rotterdam Brazil, Santos-China Itacoatiara Port up river Amazonia- China $11.25 Down $0.25 Handymax at +$1.25 more $14.50 $13.00 $25.00 Down $2.00 Down $2.00 Down $ ,000 Supramax- Panamax 60-66,000 Post Panamax 48-53,000 MT (11.5-meter draft) 56-60,000 Argentina-China Upriver with Top-Off $21.50 Down $2.50 Source: O Neil Commodity Consulting *Numbers for this table based on previous night s closing values. Latest Export Figures from GATS in Metric Tons (MT): ***NOVEMBER 2015*** Notes: 1. Data Source: Department of Commerce, U.S. Census Bureau, Foreign Trade Statistics 2. (*) denotes a country that is a summarization of its component countries. 3. Users should use cautious interpretation on QUANTITY reports using mixed units of measure. QUANTITY line items will only include statistics on the units of measure that are equal to, grouped commodities. Or are able to be converted to, the assigned unit of measure of the grouped commodities. 4. Product Group : BICO-HS10 3

4 CALENDAR YEAR EXPORT DATA: COUNTRY 2012 YR 2013 YR 2014 YR Jan/Nov 2014 Jan/Nov 2015 % Change Net Change World Total 7,420,689 9,673,245 11,274,613 10,546,496 11,566, ,020,127 China 2,158,243 4,441,647 4,332,401 4,206,803 6,071, ,864,306 Mexico 1,503,305 1,284,450 1,577,727 1,418,127 1,482, ,644 Korea, South 345, , , , , ,288 Vietnam 371, , , , , ,504 Japan 377, , , , , ,372 Turkey 175, , , , , ,122 Canada 593, , , , , ,994 Thailand 209, , , , , ,584 Indonesia 165, , , , , ,170 Ireland 89, , , , , ,534 Taiwan 207, , , , , ,501 Israel(*) 170, , , , , ,804 Egypt 97, , , ,919 88, ,346 Colombia 87,556 93, , , , ,139 United Kingdom - 96, , , , ,142 Philippines 163,794 61, , ,926 95, ,975 Morocco 117, ,336 94,422 71,823 93, ,651 Spain 15,626 12,716 84,154 84, , ,589 New Zealand(*) 16-72,003 72,003 26, ,479 Costa Rica 82,166 70,425 71,778 66,889 79, ,110 Guatemala 81,732 51,559 58,086 53,237 38, ,095 El Salvador 49,992 37,860 57,547 56,567 55, ,069 Malaysia 61,836 47,532 44,919 43,606 33, ,692 Peru 10,820 14,246 36,602 36, ,754 Honduras 34,913 38,771 35,278 34,288 40, ,728 Chile 14,720 6,314 30,649 30,649 1, ,399 Cambodia 11,806 19,658 25,091 22,911 22, Jamaica 16,305 17,575 19,759 18,609 9, ,843 Bangladesh 6,422 15,305 16,464 14,289 14, Panama 16,054 10,185 14,269 14,269 13, Saudi Arabia 10,730 1,015 8,418 8, ,418 4

5 CROP YEAR EXPORT DATA: COUNTRY 2012 YR 2013 YR 2014 YR Sept/Aug 14/15 Sept/Aug 15/16 % Change Net Change World Total 7,584,710 8,185,431 11,990,592 2,313,977 3,078, ,105 China 2,227,619 2,793,118 6,182, ,226 1,137, ,243 Mexico 1,538,720 1,276,943 1,495, , , ,843 Korea, South 377, , , , , ,776 Vietnam 456, , , , , ,745 Canada 647, , , , , ,579 Thailand 178, , , , , ,010 Turkey 121, , , , , ,512 Japan 337, , , ,216 55, ,109 Ireland 82, , ,429 97,897 55, ,643 Indonesia 180, , ,632 70,521 64, ,185 Taiwan 240, , ,627 65,775 62, ,315 Egypt 93, , ,630 36, ,722 United Kingdom 15,544 61, ,544 42,234 40, ,984 Colombia 61, , ,775 40,490 39, Philippines 146, ,825 95,751 35,672 34, ,086 Israel(*) 144, , ,817 27,442 72, ,632 Morocco 136, ,830 92,423-15, ,279 Spain 32,683 28,342 37,197 46,957 63, ,857 Costa Rica 80,226 71,727 75,360 21,659 28, ,406 El Salvador 40,930 45,802 52,893 13,131 19, ,854 New Zealand(*) 16-44,399 27,604 5, ,604 Guatemala 75,752 65,338 49,668 15,599 12, ,429 Honduras 41,408 34,753 34,293 11,618 13, ,990 Malaysia 52,841 59,258 42,487 13,799 10, ,784 Chile 32,448 6,314 4,717 25, ,932 Cambodia 10,069 20,043 18,446 9,676 10, Panama 17,119 12,070 11,609 4,760 3, ,720 Peru 10,820 14,246 22,786 13, ,816 Bangladesh 3,885 13,231 15,928 5,271 10, ,772 Ecuador - 13, ,236 5, Jamaica 13,678 17,554 22,157 2,599 2, Macau

6 2/1/2013 3/1/2013 4/1/2013 5/1/2013 6/1/2013 7/1/2013 8/1/2013 9/1/ /1/ /1/ /1/2013 1/1/2014 2/1/2014 3/1/2014 4/1/2014 5/1/2014 6/1/2014 7/1/2014 8/1/2014 9/1/ /1/ /1/ /1/2014 1/1/2015 2/1/2015 3/1/2015 4/1/2015 5/1/2015 6/1/2015 7/1/2015 8/1/2015 9/1/ /1/ /1/ /1/2015 1/1/2016 2/1/2016 DOLLARS PER METRIC TON FOB U.S.A. Gulf DDGS & Corn prices (MT): FOB US GULF DDGS & CORN PRICES $ $ Corn FOB Gulf Spot Delivery Spread FOB DDGS VS CORN DDGS FOB Gulf Linear (Corn FOB Gulf Spot Delivery) $ $ $ $ $ $ $ $50.00 $0.00 $3.99 -$ $ DATE 6

7 Council News: Online Registration Opens Monday for USGC Annual Meeting Registration opens Monday for the U.S. Grains Council s (USGC) 13th International Marketing Conference and 56th Annual Membership Meeting, scheduled to take place in Sarasota, Florida, from Feb , This meeting is a once-a-year opportunity for USGC members and stakeholders to meet with all of the Council s international directors and hear about the organization's boots-onthe-ground activities in more than 50 countries around the world. In addition, the USGC Advisory Teams (A-Teams) will review the Council s Unified Export Strategy (UES) at the meeting and help set directions and priorities for the year ahead. All potential attendees are encouraged to make plans early to join more than 200 of their colleagues at the meeting and explore this year s theme of Excellence in Exports. Mission Examines Argentine Market On Cusp of Major Policy Changes A recent U.S. Grains Council (USGC) mission to Argentina had impeccable timing, offering participants the chance to meet with local grain industry representatives just as new President Mauricio Macri has begun implementing changes that could have a significant impact on both domestic and international grain markets. Four U.S. ethanol industry representatives traveled with the Council to Argentina last week to observe local conditions, trade opportunities and constraints. During the last five years, U.S. corn and distiller s dried grains with solubles (DDGS) exports to the Latin American region have been growing, said USGC Regional Director for the Western Hemisphere Marri Carrow. However, we ve also seen Argentine DDGS exports increase as the local corn-based ethanol industry grows, so we must monitor the situation closely. The region houses some of the most important U.S. grain export markets, many of which benefit from trade agreements or logistical advantages. As of Jan. 7, the entire Western Hemisphere region purchased 13.0 million metric tons (512 million bushels) of U.S. corn this marketing year. While this is down slightly from the 14.2 million tons (559 million bushels) of U.S. corn they purchased during the same period last year, the region accounts for more than 60 percent of all U.S. corn sales. While the region has strong demand, South American corn production and subsequent exports have continued to increase, Carrow said. In order to continue to be competitive in the global market, we must monitor our competition. This mission was essential to USGC programming efforts, both regionally and globally, in furthering our understanding of Argentina s corn ethanol and DDGS production capacity and export goals. That said, while Argentina is our competitor in the global market, the country's producers are also our allies in global trade issues related to the grain and ethanol marketplaces." The Argentine assessment will help the Council add depth to its programs ongoing in the region and around the world. The team participants will report their findings during the Council's upcoming winter meeting to stakeholders, who will use the information to assist in planning 2017 marketing strategies. 7

8 Council Offers Technical Consultations on DDGS In Korea The U.S. Grains Council (USGC) visited 10 major distiller s dried grains with solubles (DDGS) importers and commercial mixed feed manufacturers recently to carry out one-on-one consultations and review the current DDGS market situation with them. Haksoo Kim, USGC director in Korea, along with Council DDGS consultant Soobo Shim visited five of Korea s largest importers and an additional five feed millers representing a collective market share of more than 50 percent. Their goal was to provide scientific information on the nutritional and physical characteristics of DDGS as well as an update on U.S. DDGS supply and demand. Korean feed millers began introducing DDGS into feed rations in While most are familiar with the product, few are using it optimally due to lingering concerns about nutrition value, inconsistent product and changes in the product s oil content. The recent one-on-one educational outreach was a response to these concerns and complements other promotion activities like conferences and trade3 teams. "Markets like Korea are the perfect opportunity to provide technical consulting as well as marketing information to interested end-users and importers to increase the demand for DDGS, Kim said. Bringing our key customers up to date on market and supplier information such as FOB price trends and market issues is what customers need to become comfortable with including more U.S. DDGS in feed rations. From January to November 2015, Korea imported 532,656 metric tons of DDGS, with more than 95 percent of it sourced from the United States. The Council believes there is room for significant growth in this market, particularly with attractive DDGS prices and additional potential supply on the market. The Council plans to continue outreach on DDGS by identifying customers needs, strengthen our efforts to meet those needs and continuing to work directly with top customers. 8