Digital Re-print

-
July | August 2014
Global Feed Markets: July - August 2014
www.gfmt.co.uk
Grain & Feed Milling Technology is published six times a year by Perendale Publishers Ltd of the United Kingdom.
All data is published in good faith, based on information received, and while every care is taken to prevent inaccuracies,
the publishers accept no liability for any errors or omissions or for the consequences of action taken on the basis of
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or by any means without prior permission of the copyright owner. Printed by Perendale Publishers Ltd. ISSN: 1466-3872
GFMT’s market analyst
John Buckley reviews world
trading conditions which are
impacting the full range of
commodities used in food
and feed production. His
observations will inf luence
your decision-making.
World soyabean crush is
expected to rise by about
10m tonnes to supply
about 8.3m tonnes more
soyabean meal. Usage is
forecast to rise by about
9.6m tonnes – in China,
the EU, US, Brazil, Mexico
and a host of smaller/
moderate sized consuming
countries in response to
the lower price.
Feed raw material
costs slump to four-year
lows
T
here’s a simple and obvious equation behind the constant decline in raw material costs
across the grain and oilseed sector: plantings are up, the weather has been mostly
kind and the planned bumper crops are coming through. Even more importantly,
though, production is now growing more than most observers expected - and
faster than demand. Where else can prices go but towards ‘clearance’ levels?
Where that demand response lies has been an issue for lively debate from commentators
over the past couple of months during which wheat prices have dropped another 14%, maize
by almost, and soyabeans by over, 20%.
Taking the drop from this year’s peak prices for these three commodities, wheat at the time
of going to press is down by 25.6%, maize by 27.7% and beans by 23%. If we want to compare
the price of soya as projected by futures for later in 2014, the drop is over 28%.
Back in May, world wheat output was projected at 697m tonnes – adequate to meet foreseen
demand. Now it’s seen closer to 705m – just 7m off last year’s record (which exceeded demand by
7m too) after increases for most of the major producing/exporting countries as shown in the table 1.
Thanks to a bumper maize crop (see below), world wheat demand is expected to drop by
about 5.5m tonnes this season, mainly in North America, the Middle East, China and other
East Asia. That’s despite a forecast 5m tonne rise in European wheat consumption on the
assumption that a larger crop will boost feed demand. Is that realistic, though, as the EU remains
under competitive supply/price pressures from another year of near record maize imports
from eastern Europe – plus its own larger domestic crop?
World wheat import demand is also seen falling in the year ahead by almost 9m tonnes due
to less going to China, Iran, Brazil and others.
Overall, world wheat stocks will expand by over 5m tonnes with increases concentrated
within China, Europe, former Soviet countries and the USA.
That’s the summary of the bearish news for a wheat market whose bellwether Chicago futures
contract for soft wheat still, somewhat surprisingly, portrays a 13% premium on prices going
into 2015. The Paris milling wheat futures market also carries a premium albeit a far smaller
one of about 3.5% going into the forward new crop months. It might be noted, however, that
futures have been demonstrably wrong over the past six months about the direction wheat
prices would travel, largely because they didn’t anticipate supplies of this magnitude – or the
willingness of speculators to short sell the market.
GRAIN
&
FEED MILLING TECHNOLOGY
48 | COMMODITIES
GFMT’s market analyst
John Buckley reviews world
trading conditions which are
impacting the full range of
commodities used in food
and feed production. His
observations will inf luence
your decision-making.
World soyabean crush is
expected to rise by about
10m tonnes to supply
about 8.3m tonnes more
soyabean meal. Usage is
forecast to rise by about
9.6m tonnes – in China,
the EU, US, Brazil, Mexico
and a host of smaller/
moderate sized consuming
countries in response to
the lower price.
Feed raw material
costs slump to four-year
lows
T
here’s a simple and obvious equation behind the constant decline in raw material costs
across the grain and oilseed sector: plantings are up, the weather has been mostly
kind and the planned bumper crops are coming through. Even more importantly,
though, production is now growing more than most observers expected - and
faster than demand. Where else can prices go but towards ‘clearance’ levels?
Where that demand response lies has been an issue for lively debate from commentators
over the past couple of months during which wheat prices have dropped another 14%, maize
by almost, and soyabeans by over, 20%.
Taking the drop from this year’s peak prices for these three commodities, wheat at the time
of going to press is down by 25.6%, maize by 27.7% and beans by 23%. If we want to compare
the price of soya as projected by futures for later in 2014, the drop is over 28%.
Back in May, world wheat output was projected at 697m tonnes – adequate to meet foreseen
demand. Now it’s seen closer to 705m – just 7m off last year’s record (which exceeded demand by
7m too) after increases for most of the major producing/exporting countries as shown in the table 1.
Thanks to a bumper maize crop (see below), world wheat demand is expected to drop by
about 5.5m tonnes this season, mainly in North America, the Middle East, China and other
East Asia. That’s despite a forecast 5m tonne rise in European wheat consumption on the
assumption that a larger crop will boost feed demand. Is that realistic, though, as the EU remains
under competitive supply/price pressures from another year of near record maize imports
from eastern Europe – plus its own larger domestic crop?
World wheat import demand is also seen falling in the year ahead by almost 9m tonnes due
to less going to China, Iran, Brazil and others.
Overall, world wheat stocks will expand by over 5m tonnes with increases concentrated
within China, Europe, former Soviet countries and the USA.
That’s the summary of the bearish news for a wheat market whose bellwether Chicago futures
contract for soft wheat still, somewhat surprisingly, portrays a 13% premium on prices going
into 2015. The Paris milling wheat futures market also carries a premium albeit a far smaller
one of about 3.5% going into the forward new crop months. It might be noted, however, that
futures have been demonstrably wrong over the past six months about the direction wheat
prices would travel, largely because they didn’t anticipate supplies of this magnitude – or the
willingness of speculators to short sell the market.
GRAIN
&
FEED MILLING TECHNOLOGY
48 | COMMODITIES
In recent weeks, wheat has effectively lost all of the premium it
acquired during the most tense period of standoffs and conflicts
between Russia and Ukraine during the early spring. That situation
has, of course, been warming up again in the last few weeks and could
yet cause disruption to exports from a region expected to supply the
world with 28.5m tonnes – or about 19% of its wheat exports – in
the coming year.
At this stage, at least, short of an outright war between the two countries,
the markets appear to be banking on business as usual continuing, just as
it did after all in first-half 2014. Certainly recent quotations coming out
of Russia and Ukraine suggest they will be keen export competitors in
the months ahead. Russia has been offered 11.5% protein milling at the
low price of $239 per tonne, fob terms with 12.5% protein available for
about $10 per tonne more. Ukraine meanwhile has been quoting 11.5%
proteins at $235/238 and 12.5% at $250. Despite some concerns about
untimely rains lowering harvest quality, these two do seem to be able
to offer reasonable grade wheats. Those prices compare with US soft
Table 1: USDA wheat crop forecasts
mn tonnes
2013
Final
2014
May
2014
July
China 121.9 123 124
EU 143.3 144.9 147.9
India 93.5 94 95.9
USA 58 53.4 54.2
Russia 52.1 52 53
Canada 37.5 28.5 28
Australia 27 25.5 26
Ukraine 22.3 20 21
WORLD 714 697 705
July - August 2014 | 49 GRAIN
&
FEED MILLING TECHNOLOGY
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Latest references
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Ann A5 victam 0212.indd 1 21/02/12 15:37:04
red winter wheat recently offered fob around $225/230. However, the
more expensive freight from the Gulf of Mexico doesn’t give the US
much leverage in the contested markets where the most active sales
opportunities lie, chiefly the Middle-East/North African region. Here it
is the ‘Black Sea’ exporters who are beating most of the competition,
including the EU’s own, cut-price seller Rumania, followed closely by Russia
and Ukraine. French exports also seem to be doing quite well, with a
big sale in late July (800,000 tonnes plus) to their loyal customer Algeria.
However, there has been talk that second largest EU exporter Germany
might struggle to keep up this year if its doesn’t get the big orders it won
last season from Iran. In summary, this all seems to spell a competitive
market ahead between the major EU exporters and against their CIS
rivals - even before Canada, Australia and the US come into the frame
for world wheat trade further afield. That must surely
be broadly bearish for international wheat prices and
it must be reflected to a large extent on the internal
markets of the US, Europe and the CIS.
The previous Ukrainian flare up last spring also
coincided with concerns that the US crop would come
in much smaller than expected after droughts and
a wet harvest. In fact the hard red winter harvest
is coming in bigger than expected on better yields
and some passably good protein levels. Stocks of this,
the top class of wheat exported by the USA – the
world’s largest wheat supplier, have also been revised
considerably higher recently after the USDA cut is
estimate of feed use for this grain. The US also seems
to have planted a lot more spring wheat than markets
expected which will be welcomed by overseas millers
who want that high quality to improve their grists.
Not all the developments over the last quarter
have been so positive for wheat supplies. As we go to
press, there remains a possibility that some EU wheat
could be downgraded by wet harvest weather to feed
- chiefly in Bulgaria, Rumania, parts of France and Germany. It’s already
reflected in some big premiums being demanded for milling over feed
wheat. It also suggests Europe might have more feed grade wheat than
usual. Amid a large EU maize crop and the competition from imported
CIS maize, that suggests further downward pressures on European feed
grain prices.
Canada meanwhile has had a huge problem with excess rain flooding fields,
holding up and exaggerating farmers’ already downsized planting plans. Crops
are developing late in cold, damp conditions. Perhaps 10-15% of acreage is at
risk of abandonment or at best poor performance in terms of yield and/or
sub-par quality. Canada is carrying 4m tonnes more stock into this season which
can supplement export trade . This factor does have the potential to firm up
prices at the quality end of the milling wheat market. However, for the time
being, the market has plenty of wheat in total to eat through and questions
over the strength of forward demand as competition grows from maize.
Maize surplus grows
Key feedgrain maize remains on course for a big top of in supply and
lower prices amid market ideas that major producers may also out-perform
forecasts for a slightly larger crop in 2014/15.
The key factor, as always is the US crop. The USDA estimates will be
sown on 91.6m acres – 3.8m or 4% less than last year as farmers respond
to the steep fall that has already occurred in producer prices. However,
thanks to ideal weather, it is also forecasting a 4% rise in yield to 165.3bu/
acre, so a crop not much below last year’s record 353.9m tonnes. The
trade consensus is that this doesn’t fully reflect the crop’s stellar condition
ratings – the best for 20 years – and that yield will be at least 170 bushels/
acre. That equates to an extra 10m tonnes, ie a crop of about 364m.
US consumption of maize jumped by 32m tonnes or 12% over the
past season as all sectors – feed, ethanol, food responded to far cheaper
prices. The exception was US exports which dropped by 5m tonnes. yet
carryover stocks still rose by 11m tonnes or over 50% from last year’s low
levels, to a far more comfortable 31.7m tones. For the season ahead, USDA
sees US demand about the same although some analysts think that might
under-rate the expansionary effect of cheaper corn prices, especially on
livestock profitability and on ethanol use (blending of corn ethanol with
petrol is approaching maximum levels but with fuel costs down, total
consumption could rise – and US exports of the green fuel are also rising.
The current USDA thinking, that US stocks will finish the new season
at 45.8m tonnes (+14.1m or 45%) is a bearish influence on forward maize
prices, both in the US and overseas. So is USDA’s reckoning that stocks
will increase in China and the EU and stay relatively high in the second
largest maize exporting country, Brazil (Table 2).
Against the bearish US figures, maize production is expected to decline
somewhat this year in Ukraine and Brazil. However, while that may trim
Ukraine’s exports back by about 4m tonnes from the past seaosn’s record
20m, USDA expects a lot more to be available to the world’s importers
from other sources. Brazil and Argentina – which both have large stocks
already – are expected to ship 9m tonnes (30%) more. Moreover, the USA
(which USDA sees exporting 5m tonnes less because of this competition) can
easily export far more if the world needs it, without
changing its own outlook for huge, if not burdensome
carryover stocks in the following 2015/16 season.
It’s no wonder than that maize prices are falling
fast and, like wheat, are at their lowest levels for four
years. Both grains have, of course, been far lower in
the last 20 years than the current futures markets
show. Even at their lowest in four years, both wheat
and maize are still poised about a third higher than
the ten-year average prior to the great price boom
of 2007/8, when Chicago wheat hit $13/bu or nearly
$480/tonne.
If there is a factor that will eventually underpin
and perhaps justify some price rallies, it is the cost of
production. Many producers are already feeling the
pinch – at or below break even - and there has been
quite a bit of talk about cutbacks in acreage on the way.
Longer term, bodies like the OECD are suggesting that
relative crop values and margins will increasingly favour
oilseed rather than cereal expansion, putting more and
more onus on yields to deliver larger crops. These
GRAIN
&
FEED MILLING TECHNOLOGY
50 | COMMODITIES
Table 2: USDA maize crop forecasts
(mn tonnes)
2013
Final
2014
May
2014
July
USA 353.7 353.9 352.1
China 218.5 220 222
Brazil 78 74 74
EU 64.6 64.7 65.6
Ukraine 30.9 26 27
India 24.2 22 22
Argentina 24 26 26
S Africa 14.5 13.5 13.5
Canada 14.2 12.5 11.6
Russia 11.6 12.5 13
Serbia 6.3 6.5 6.6
WORLD 984.5 979.1 981
July - August 2014 | 55 GRAIN
&
FEED MILLING TECHNOLOGY
One of these samples has optimum
gluten quality. The GlutoPeak
®
knows which.
With its innovative analysis process, the
Brabender
®
GlutoPeak
®
determines the
gluten quality of your milled cereal prod-
ucts – quickly, reliably and at any time.
■ Flexible analysis of flour, wholemeal flour,
coarse meal, vital gluten and baking mixtures
■ Fast quality analysis in one to ten minutes
■ Precise results from small samples
■ Easy-to-use software for simple handling
Brabender
®
technology optimises the quality of your
raw materials and ensures your success.
Brabender
®
GmbH & Co. KG · www.brabender.com
GlutoPeak_GFM_190x132_E.indd 1 26.05.2014 14:47:06
The 25th Annual IAOM MEA District Conference & Expo will be held
at the Cape Town International Convention Centre (CTICC), Halls 4A & 4B on 3-6 December 2014.
Mideast & Africa District
Organized by:
Management
Keynote Speaker
Dr. Beau Lotto
Neuroscientist & Founder,
Lottolab (UK)
Mike Krueger
Founder & President,
The Money Farm (USA)
Top Notch Keynote Speakers Conference and Expo Highlights
REGISTER NOW
www.iaom-mea.com/IAOM-SOUTHAFRICA2014/
Email: info@iaom-mea.com or call 0096824711755
Milling Industry’s Largest Gathering
in the
Middle East & Africa
• Largest gathering of flour & feed
milling industry machine
suppliers, grain millers and
commodity traders from the
Middle East, Africa and all over
the world
• Captivating and vibrant keynote
speakers for Management,
Technical and Trading sessions
• Extensive networking
opportunities
• World renowned keynote
speakers include Dr. Beau Lotto,
Neuroscientist & Founder Lottolab
(UK) and Daniel Basse, President
& founder, AgResource Co. (USA)
• Evening Functions in Cape
Town’s most elite venues
• English and Arabic simultaneous
translation available
• Full access to conference
presentations and expo
Trading Moderator
& Keynote Speaker
Daniel Basse
President & Founder,
AgResource Co. (USA)
F
red winter wheat recently offered fob around $225/230. However, the
more expensive freight from the Gulf of Mexico doesn’t give the US
much leverage in the contested markets where the most active sales
opportunities lie, chiefly the Middle-East/North African region. Here it
is the ‘Black Sea’ exporters who are beating most of the competition,
including the EU’s own, cut-price seller Rumania, followed closely by Russia
and Ukraine. French exports also seem to be doing quite well, with a
big sale in late July (800,000 tonnes plus) to their loyal customer Algeria.
However, there has been talk that second largest EU exporter Germany
might struggle to keep up this year if its doesn’t get the big orders it won
last season from Iran. In summary, this all seems to spell a competitive
market ahead between the major EU exporters and against their CIS
rivals - even before Canada, Australia and the US come into the frame
for world wheat trade further afield. That must surely
be broadly bearish for international wheat prices and
it must be reflected to a large extent on the internal
markets of the US, Europe and the CIS.
The previous Ukrainian flare up last spring also
coincided with concerns that the US crop would come
in much smaller than expected after droughts and
a wet harvest. In fact the hard red winter harvest
is coming in bigger than expected on better yields
and some passably good protein levels. Stocks of this,
the top class of wheat exported by the USA – the
world’s largest wheat supplier, have also been revised
considerably higher recently after the USDA cut is
estimate of feed use for this grain. The US also seems
to have planted a lot more spring wheat than markets
expected which will be welcomed by overseas millers
who want that high quality to improve their grists.
Not all the developments over the last quarter
have been so positive for wheat supplies. As we go to
press, there remains a possibility that some EU wheat
could be downgraded by wet harvest weather to feed
- chiefly in Bulgaria, Rumania, parts of France and Germany. It’s already
reflected in some big premiums being demanded for milling over feed
wheat. It also suggests Europe might have more feed grade wheat than
usual. Amid a large EU maize crop and the competition from imported
CIS maize, that suggests further downward pressures on European feed
grain prices.
Canada meanwhile has had a huge problem with excess rain flooding fields,
holding up and exaggerating farmers’ already downsized planting plans. Crops
are developing late in cold, damp conditions. Perhaps 10-15% of acreage is at
risk of abandonment or at best poor performance in terms of yield and/or
sub-par quality. Canada is carrying 4m tonnes more stock into this season which
can supplement export trade . This factor does have the potential to firm up
prices at the quality end of the milling wheat market. However, for the time
being, the market has plenty of wheat in total to eat through and questions
over the strength of forward demand as competition grows from maize.
Maize surplus grows
Key feedgrain maize remains on course for a big top of in supply and
lower prices amid market ideas that major producers may also out-perform
forecasts for a slightly larger crop in 2014/15.
The key factor, as always is the US crop. The USDA estimates will be
sown on 91.6m acres – 3.8m or 4% less than last year as farmers respond
to the steep fall that has already occurred in producer prices. However,
thanks to ideal weather, it is also forecasting a 4% rise in yield to 165.3bu/
acre, so a crop not much below last year’s record 353.9m tonnes. The
trade consensus is that this doesn’t fully reflect the crop’s stellar condition
ratings – the best for 20 years – and that yield will be at least 170 bushels/
acre. That equates to an extra 10m tonnes, ie a crop of about 364m.
US consumption of maize jumped by 32m tonnes or 12% over the
past season as all sectors – feed, ethanol, food responded to far cheaper
prices. The exception was US exports which dropped by 5m tonnes. yet
carryover stocks still rose by 11m tonnes or over 50% from last year’s low
levels, to a far more comfortable 31.7m tones. For the season ahead, USDA
sees US demand about the same although some analysts think that might
under-rate the expansionary effect of cheaper corn prices, especially on
livestock profitability and on ethanol use (blending of corn ethanol with
petrol is approaching maximum levels but with fuel costs down, total
consumption could rise – and US exports of the green fuel are also rising.
The current USDA thinking, that US stocks will finish the new season
at 45.8m tonnes (+14.1m or 45%) is a bearish influence on forward maize
prices, both in the US and overseas. So is USDA’s reckoning that stocks
will increase in China and the EU and stay relatively high in the second
largest maize exporting country, Brazil (Table 2).
Against the bearish US figures, maize production is expected to decline
somewhat this year in Ukraine and Brazil. However, while that may trim
Ukraine’s exports back by about 4m tonnes from the past seaosn’s record
20m, USDA expects a lot more to be available to the world’s importers
from other sources. Brazil and Argentina – which both have large stocks
already – are expected to ship 9m tonnes (30%) more. Moreover, the USA
(which USDA sees exporting 5m tonnes less because of this competition) can
easily export far more if the world needs it, without
changing its own outlook for huge, if not burdensome
carryover stocks in the following 2015/16 season.
It’s no wonder than that maize prices are falling
fast and, like wheat, are at their lowest levels for four
years. Both grains have, of course, been far lower in
the last 20 years than the current futures markets
show. Even at their lowest in four years, both wheat
and maize are still poised about a third higher than
the ten-year average prior to the great price boom
of 2007/8, when Chicago wheat hit $13/bu or nearly
$480/tonne.
If there is a factor that will eventually underpin
and perhaps justify some price rallies, it is the cost of
production. Many producers are already feeling the
pinch – at or below break even - and there has been
quite a bit of talk about cutbacks in acreage on the way.
Longer term, bodies like the OECD are suggesting that
relative crop values and margins will increasingly favour
oilseed rather than cereal expansion, putting more and
more onus on yields to deliver larger crops. These
GRAIN
&
FEED MILLING TECHNOLOGY
50 | COMMODITIES
Table 2: USDA maize crop forecasts
(mn tonnes)
2013
Final
2014
May
2014
July
USA 353.7 353.9 352.1
China 218.5 220 222
Brazil 78 74 74
EU 64.6 64.7 65.6
Ukraine 30.9 26 27
India 24.2 22 22
Argentina 24 26 26
S Africa 14.5 13.5 13.5
Canada 14.2 12.5 11.6
Russia 11.6 12.5 13
Serbia 6.3 6.5 6.6
WORLD 984.5 979.1 981
July - August 2014 | 51 GRAIN
&
FEED MILLING TECHNOLOGY
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July - August 2014 | 55 GRAIN
&
FEED MILLING TECHNOLOGY
One of these samples has optimum
gluten quality. The GlutoPeak
®
knows which.
With its innovative analysis process, the
Brabender
®
GlutoPeak
®
determines the
gluten quality of your milled cereal prod-
ucts – quickly, reliably and at any time.
■ Flexible analysis of flour, wholemeal flour,
coarse meal, vital gluten and baking mixtures
■ Fast quality analysis in one to ten minutes
■ Precise results from small samples
■ Easy-to-use software for simple handling
Brabender
®
technology optimises the quality of your
raw materials and ensures your success.
Brabender
®
GmbH & Co. KG · www.brabender.com
GlutoPeak_GFM_190x132_E.indd 1 26.05.2014 14:47:06
The 25th Annual IAOM MEA District Conference & Expo will be held
at the Cape Town International Convention Centre (CTICC), Halls 4A & 4B on 3-6 December 2014.
Mideast & Africa District
Organized by:
Management
Keynote Speaker
Dr. Beau Lotto
Neuroscientist & Founder,
Lottolab (UK)
Mike Krueger
Founder & President,
The Money Farm (USA)
Top Notch Keynote Speakers Conference and Expo Highlights
REGISTER NOW
www.iaom-mea.com/IAOM-SOUTHAFRICA2014/
Email: info@iaom-mea.com or call 0096824711755
Milling Industry’s Largest Gathering
in the
Middle East & Africa
• Largest gathering of flour & feed
milling industry machine
suppliers, grain millers and
commodity traders from the
Middle East, Africa and all over
the world
• Captivating and vibrant keynote
speakers for Management,
Technical and Trading sessions
• Extensive networking
opportunities
• World renowned keynote
speakers include Dr. Beau Lotto,
Neuroscientist & Founder Lottolab
(UK) and Daniel Basse, President
& founder, AgResource Co. (USA)
• Evening Functions in Cape
Town’s most elite venues
• English and Arabic simultaneous
translation available
• Full access to conference
presentations and expo
Trading Moderator
& Keynote Speaker
Daniel Basse
President & Founder,
AgResource Co. (USA)
F
situations usually right themselves in the end through appropriate price signals
but the question at what level cereal prices will bottom out, let alone when
they will start to rally, will probably not be answered for a while yet. The UK’s
Home-Grown cereal Authority and French analyst ODA have both warned
of downward price pressures into the harvest period while an OECD/FAO
report views a potential two-year slump. In the meantime, consumers can
make the most of lower costs, particularly in the feed sector where some
market advisors are suggesting the wisdom of taking on more cover than usual.
Oilseed supplies under-rated
Global oilseed supplies are promised to turn out far larger than expected
for the 2014/15 season, suggesting a long period of cheaper prices for the
protein oilmeal sector.
As always, the key factor is the size of the soyabean crop, usually the
source of well over two thirds of the world’s total oilmeal supply.
In the USA, farmers have sown far more than expected, and with
probable record yields on the way, may produce a massive 103.4m
tonne crop – about 14m more than last year’s, equal to 11m tonnes
more meal if all the extra were crushed.
At this stage, USDA is expecting only 2.3m of the additional supplies to
be used in the coming season, the rest going to build up the biggest US
stock for several years. USDA also sees Latin American producers turning
out bigger crops for yet another year, raising world production for the
new season by 20.9m tonnes and world carryover stocks (by September
2015) to a record 85.3m tonnes. This year they were already large at 67m
and only two years ago, they were just 53.5m.
World soyabean crush is expected to rise by about 10m tonnes to
supply about 8.3m tonnes more soyabean meal. Usage is forecast to rise
by about 9.6m tonnes – in China, the EU, US, Brazil, Mexico and a host
of smaller/moderate sized consuming countries in response to the lower
price. Amid static or slightly lower crops of alternative oisleeds/meals, that
means soya accounts for all the growth in world protein meal consumption
in the season ahead. Those extra soyabean stocks also mean there will be
ample supplies available to crush of the market demands more, keeping
prices under control or heading ‘South.’ No wonder, soya has become
the weakest commodity in the grain and oilseed complex.
KEY FACTORS AHEAD - WHEAT
• Tensions between Russia and Ukraine are flaring again and have the
potential to ‘spook’ prices up. The trade is hoping the ‘business as usual’
we saw last spring will continue
• World stocks will grow more than expected this season as consumption
falls faster than production
• World wheat trade is declining more than expected from last season’s
record high
• Key quality wheat exporter Canada’s crop is exposed to downward revision
as weather cuts harvest area, lowers yields and maybe threatens quality
• The EU has some wet harvest, possible quality issues to deal with
• Wheat feeding levels and wheat value remain under further pressure
from rising maize supplies, especially within the EU.
COARSE GRAINS
• Maize supplies are looking even bigger than expected back in the spring,
led by a potential record US crop and ample supplies from Latin America,
CIS & Europe
• Brisk export competition should keep prices under downward pressure
• But consumption could turn out to be under-rated as livestock feeders
exploit improved margins flowing from lower corn costs
• The EU will probably see its third season of massive maize imports
• China continues to release some of its huge maize stockpile, cutting its
import needs.
OILMEALS/PROTEINS
• Big US and LatAm crop surpluses continue signal cheaper global oilmeal
supplies
• But further forward, will producers maintain crop expansions as the
value and income from their production falls?
Sohar Port and Freezone have grand plans
for a new agro-terminal which will com-
bine public service with private industry.
Plans for the agro-terminal include a
‘Food Cluster’ area, which will consist
of a sugar refinery under the private
ownership of the Oman Sugar Refinery
Company (OSRC), and a governmental
strategic food reserve facility, controlled
by the Public Authority for Strategic Food
Reserves (PASFR).
The terminal will thus become an
important part of Oman’s food security
strategy, assuring a plenitude of silo storage
for grain commodities.
However, the commodities held at the
terminal will be continually replenished: the
public joint stock firm Oman Flour Mills
(OFM) has been challenged with a task
of replenishment and creative selling for
excess and ageing stocks, while simultane-
ously reducing government expenditure.
Edwin Lammers, executive commercial
manager of the Sohar Port and Freezone,
outlined his vision for the agro-terminal:
“The Food Cluster is unique in that it
will feature the country’s first dedicated agro
bulk terminal designed not only for the han-
dling of wheat and grain shipments on behalf
of the government, but also feedstock for
the sugar refinery. The facility will also give
new impetus to agro-bulk projects.”
Given that the OSRC is aiming to pro-
duce one million tonnes per year of refined
sugar, the Sohar Port and Freezone agro-
terminal looks set to become a vibrant hub
of public and private industry.
For more information on the Sohar Port
and Freezone visit soharportandfreezone.com
As reported in Port technology
International Magazine (PTI)
Oman plans dynamic new agro-terminal PORTS
1974 2014 40
YEARS
This is a comprehensive description of
what we do. Any questions?
Dry bulk
handling
www.siwertell.com
Siwertell is a Cargotec brand
GRAIN
&
FEED MILLING TECHNOLOGY
52 | COMMODITIES
www.oj-hojtryk.dk
Die and roll re-working machines
O&J Højtryk A/S
Ørnevej 1, DK-6705
Esbjerg Ø
CVR.: 73 66 86 11
Phone: +45 75 14 22 55
Fax: +45 82 28 91 41
mail: info@oj-hojtryk.dk
AD_o&j.indd 1 21/11/2012 15:08
situations usually right themselves in the end through appropriate price signals
but the question at what level cereal prices will bottom out, let alone when
they will start to rally, will probably not be answered for a while yet. The UK’s
Home-Grown cereal Authority and French analyst ODA have both warned
of downward price pressures into the harvest period while an OECD/FAO
report views a potential two-year slump. In the meantime, consumers can
make the most of lower costs, particularly in the feed sector where some
market advisors are suggesting the wisdom of taking on more cover than usual.
Oilseed supplies under-rated
Global oilseed supplies are promised to turn out far larger than expected
for the 2014/15 season, suggesting a long period of cheaper prices for the
protein oilmeal sector.
As always, the key factor is the size of the soyabean crop, usually the
source of well over two thirds of the world’s total oilmeal supply.
In the USA, farmers have sown far more than expected, and with
probable record yields on the way, may produce a massive 103.4m
tonne crop – about 14m more than last year’s, equal to 11m tonnes
more meal if all the extra were crushed.
At this stage, USDA is expecting only 2.3m of the additional supplies to
be used in the coming season, the rest going to build up the biggest US
stock for several years. USDA also sees Latin American producers turning
out bigger crops for yet another year, raising world production for the
new season by 20.9m tonnes and world carryover stocks (by September
2015) to a record 85.3m tonnes. This year they were already large at 67m
and only two years ago, they were just 53.5m.
World soyabean crush is expected to rise by about 10m tonnes to
supply about 8.3m tonnes more soyabean meal. Usage is forecast to rise
by about 9.6m tonnes – in China, the EU, US, Brazil, Mexico and a host
of smaller/moderate sized consuming countries in response to the lower
price. Amid static or slightly lower crops of alternative oisleeds/meals, that
means soya accounts for all the growth in world protein meal consumption
in the season ahead. Those extra soyabean stocks also mean there will be
ample supplies available to crush of the market demands more, keeping
prices under control or heading ‘South.’ No wonder, soya has become
the weakest commodity in the grain and oilseed complex.
KEY FACTORS AHEAD - WHEAT
• Tensions between Russia and Ukraine are flaring again and have the
potential to ‘spook’ prices up. The trade is hoping the ‘business as usual’
we saw last spring will continue
• World stocks will grow more than expected this season as consumption
falls faster than production
• World wheat trade is declining more than expected from last season’s
record high
• Key quality wheat exporter Canada’s crop is exposed to downward revision
as weather cuts harvest area, lowers yields and maybe threatens quality
• The EU has some wet harvest, possible quality issues to deal with
• Wheat feeding levels and wheat value remain under further pressure
from rising maize supplies, especially within the EU.
COARSE GRAINS
• Maize supplies are looking even bigger than expected back in the spring,
led by a potential record US crop and ample supplies from Latin America,
CIS & Europe
• Brisk export competition should keep prices under downward pressure
• But consumption could turn out to be under-rated as livestock feeders
exploit improved margins flowing from lower corn costs
• The EU will probably see its third season of massive maize imports
• China continues to release some of its huge maize stockpile, cutting its
import needs.
OILMEALS/PROTEINS
• Big US and LatAm crop surpluses continue signal cheaper global oilmeal
supplies
• But further forward, will producers maintain crop expansions as the
value and income from their production falls?
Sohar Port and Freezone have grand plans
for a new agro-terminal which will com-
bine public service with private industry.
Plans for the agro-terminal include a
‘Food Cluster’ area, which will consist
of a sugar refinery under the private
ownership of the Oman Sugar Refinery
Company (OSRC), and a governmental
strategic food reserve facility, controlled
by the Public Authority for Strategic Food
Reserves (PASFR).
The terminal will thus become an
important part of Oman’s food security
strategy, assuring a plenitude of silo storage
for grain commodities.
However, the commodities held at the
terminal will be continually replenished: the
public joint stock firm Oman Flour Mills
(OFM) has been challenged with a task
of replenishment and creative selling for
excess and ageing stocks, while simultane-
ously reducing government expenditure.
Edwin Lammers, executive commercial
manager of the Sohar Port and Freezone,
outlined his vision for the agro-terminal:
“The Food Cluster is unique in that it
will feature the country’s first dedicated agro
bulk terminal designed not only for the han-
dling of wheat and grain shipments on behalf
of the government, but also feedstock for
the sugar refinery. The facility will also give
new impetus to agro-bulk projects.”
Given that the OSRC is aiming to pro-
duce one million tonnes per year of refined
sugar, the Sohar Port and Freezone agro-
terminal looks set to become a vibrant hub
of public and private industry.
For more information on the Sohar Port
and Freezone visit soharportandfreezone.com
As reported in Port technology
International Magazine (PTI)
Oman plans dynamic new agro-terminal PORTS
1974 2014 40
YEARS
This is a comprehensive description of
what we do. Any questions?
Dry bulk
handling
www.siwertell.com
Siwertell is a Cargotec brand
GRAIN
&
FEED MILLING TECHNOLOGY
52 | COMMODITIES
www.oj-hojtryk.dk
Die and roll re-working machines
O&J Højtryk A/S
Ørnevej 1, DK-6705
Esbjerg Ø
CVR.: 73 66 86 11
Phone: +45 75 14 22 55
Fax: +45 82 28 91 41
mail: info@oj-hojtryk.dk
AD_o&j.indd 1 21/11/2012 15:08
1974 2014 40
YEARS
This is a comprehensive description of
what we do. Any questions?
Dry bulk
handling
www.siwertell.com
Siwertell is a Cargotec brand
www.gfmt.co.uk
LINKS
• See the full issue
• Visit the GFMT website
• Contact the GFMT Team
• Subscribe to GFMT
INCORPORATING PORTS, DISTRIBUTION AND FORMULATION
Ju
ly
- A
u
g
u
st 2
0
1
4
first published in 1891
In this issue:
• NIR Multi Online
Technology:
Real-time
analysis for early
detection of
grain quality
fluctuations
• Feed Focus
Pigs
• GRAPAS
Technology from
the GRAPAS Asia
award
• Dust control
with bulk bag
discharger and
flexible screw
conveyors
• Mycotoxins
How to analyse
and reduce
the hazard to
humans and
animals
• Storage and
silos special
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