Digital Re-print September | October 2013
Global Feed Markets: September - October 2013
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Every issue GFMT’s market analyst John Buckley reviews
world trading conditions which are imp...
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Global Feed Markets: September - October 2013

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A FEW months ago, a major recovery from last year’s unusual succession of crop setbacks was no more than a promise based on larger sown acreages and hopes for ‘normalising’ weather in the world’s key grain-producing regions. That didn’t stop prices falling as markets put their bets on a return to looser supplies but, after a tough winter and a cold wet spring delayed winter crop development and spring sowings across much of the Northern hemisphere, some caution was still required.

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Transcript of "Global Feed Markets: September - October 2013"

  1. 1. Digital Re-print September | October 2013 Global Feed Markets: September - October 2013 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 information published. ©Copyright 2013 Perendale Publishers Ltd. All rights reserved. No part of this publication may be reproduced in any form or by any means without prior permission of the copyright owner. Printed by Perendale Publishers Ltd. ISSN: 1466-3872 www.gfmt.co.uk
  2. 2. “ After a decade, we replaced our Tapco Heavy-Duty buckets with the Xtreme-Duty ones. If the new ones perform half as well as the originals, who knows how long they’ll last — maybe 20 years or more! ” Jamie Mattson Operations Manager JAMES VALLEY GRAIN, LLC Oakes, North Dakota, U.S.A. Jon Hansen Plant Operator JAMES VALLEY GRAIN, LLC. Why 10 Years is Just a Drop in the Bucket When it Comes to the Performance of Tapco Buckets calculated that the original Tapco buckets handled 169,297,881 bushels – and most of those buckets were the originals.” When James Valley Grain installed Tapco buckets in their new facility in 2001, nobody expected them to last this long. A lot of commodities of different density variations – like wheat, corn and soybeans – have run through the original 7.05-million-bushel terminal, which added extra wear on the STYLE CC-HD (HEAVY DUTY) buckets. Through the ® years, the volume of STYLE CC-XD (XTREME DUTY) material has gone way up, too. “Ten years is a long time for buckets to endure, especially running as hard as we do,” Mattson says. “Honestly, when we took them off, it was pretty incredible how well they wore. If the new ones perform half as well as the originals, who knows how long they’ll last – maybe 20 years or more!” “We went from five million bushels the first year to around 30 million the last four years,” Jamie Mattson, Operations Manager, James Valley Grain, says. “In fact, I just looked it up and Extend the longevity of your loadout legs with Tapco buckets. Find out why 75% of design engineers, contractors and bucket elevator manufacturers* trust Tapco to keep business moving. Anticipating even more volume, the plant recently decided to upgrade to Tapco CC-XD (Xtreme Duty) buckets – made with 35-50% more resin thoughout – not just at critical wear points. ELEVATOR BUCKETS - ELEVATOR BOLTS St. Louis, Missouri U.S.A. Tel.: +1 314 739 9191 • +1 800 AT TAPCO (+1 800 288 2726) • Fax: +1 314 739 5880 • www.tapcoinc.com *Grain Journal, Country Journal Publishing Co., Inc., Decatur, Illinois, U.S.A. The color blue, when used in connection with elevator buckets, is a U.S. registered trademark owned by Tapco Inc. © 2013 Tapco Inc.® All rights reserved.
  3. 3. GLOBAL GRAIN & FEED MARKETS Every issue 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 influence your decision-making. Recovering ‘Black Sea’ (former Soviet country) crops may now live up to, even exceed, their early promise in terms of tonnages but there may be some quality issues after wet harvests for the latter stages of Russia, Ukrainian and Kazakh harvests. The latersown spring wheat and corn crops will Big supply drives grain costs to 3-year low A FEW months ago, a major recovery from last year’s unusual succession of crop setbacks was no more than a promise based on larger sown acreages and hopes for ‘normalising’ weather in the world’s key grain-producing regions. That didn’t stop prices falling as markets put their bets on a return to looser supplies but, after a tough winter and a cold wet spring delayed winter crop development and spring sowings across much of the Northern hemisphere, some caution was still required. Now crops have mostly caught up, seen off some drought and heatwave scares in the US and the former Soviet Union and, over the last few weeks before this issue went to press, harvest yields have been confirming what the optimists had only dared hope: Output of all the major grains is not only up but significantly exceeds even the top forecasts. The recovery is led by world maize production, now expected to rise by a remarkable 11% while wheat and barley crops are seen up by around 8% each. Even sorgum outpout is up by almost 10% . As a result, coarse/feed grain supply will comfortably overtake demand, allowing a needed replenishment of the stocks that were depleted by last season’s production shortfalls. In fact, maize stocks at the close of the coming season will be at their highest for 12-years in global terms, largely due to a recovery in the US (where most of the drop occurred last year and where they will reach an eight-year peak). That’s clearly bearish long-term for maize costs. Wheat stocks are also expected to improve as production rebounds and the consumption response to plentiful supplies and lower prices is kept in check by the return of much fiercer competition in the feed sector from cheap and abundant maize and barley (about 20% of global wheat use is in animal feeds and well over 40% of consumption within the European Union). The biggest price response to supply recovery so far has been in the maize market – hardly surprising as production of this grain is now estimated to increase by almost 100m tonnes. Remember that the global maize crop decline which last season propelled maize costs to their highest level ever, was only in the order of 24m tonnes! This season, not only has the US maize crop bounced back by almost 80m tonnes to a new record of over 350m tonnes but crops in the up-and-coming exporters are also soaring to their highest ever levels – Brazil’s +8m at 81m tonnes be most at risk. 46 | September - october 2013 &feed millinG technoloGy Grain
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  5. 5. FEATURE COMMODITIES Therefore, it is important to optimise the scheduling/production planning to ensure the flush process is only Hand additions and premix used where there is no addition The losses that can occur at this stage are alternative. This can be significant because of the impact of putting achieved most effectivethe wrong additive into the wrong feed type, ly through PLC control which can prevent cross or the impact of under or over dosing. The most effective method to reduce contamination schedulthe risk of errors is to automate the process ing and programme the using either barcoding or weigh stations or a flush batch automatically combination of both. This has the advantage before a sensitive feed of providing complete traceability which can type. The pelleting lines may also require flush- vitamins as well as the risk of over-gelatinialso limit losses if an error does occur. ing and this again will impact significantly on sation of starch leading to poorer nutritional performance. production cost. Flush batching A more efficient flush procedure is to be Some feed mills run the same feed In many feed mills there is a requirement (possibly more), Ukraine’s +8-10m at 29/30m to flush or purge the mixer and pelleting material used for the mixer flush through able to use the flush batch as final feed. This tonnes alongside some notable gains too in lines to avoid carryover of specific materials to bulk or packing silos. This is certainly can be done by either removing the coccidiexportable output from Russia, Argentina and or feed additives, coccidiostats and medi- wasteful because of the time involved and ostat or medicine in the final batch but addSerbia. Even the EU expects a crop increase the manpower required to pack or transport ing this to the existing feed on the basis that cines. of around 5-6m tonnes. The method of how the mixer and pellet the rework back to the raw material silos when mixed with the original batches it will Most of these rival corn suppliers have only represent a minor dilution. Once again lines are flushed will impact how much loss or intake. already been undercutting US export prices Some feed companies use a specified the PLC pelleting control can control the is associated with this process. Mixer flushby a substantial margin in past months, ing is usually done using a defined quantity quantity of the first batch of feed, following routing of different feed types to each pellet enabling them to win the lion’s share of of raw material such as corn, which is then the coccidiostat or medicine, and run this line and ensure a flush is created before the any ‘non-routine’ tenders as well as a large in the US itself next spring. If that happened the 7m tonnes forecast by the USDA although re-routed back to a nominated silo for through the line and recirculate as rework. next sensitive feed type. chunk of the USA’s most loyal custom from it might reduce some of the pressure from their estimates might be subject to some inclusion into specified feed types. Each flush Once again this is wasteful not only for the countries like South Korea and Taiwan. Most large supplies longer term but there are no wishful thinking and biased toward keeping batch represents cost in terms of mixer time, reasons already listed, but because each Pelleting crumbling and of these exporters are also doing their best guarantees of that. We only have to look at their import costs of maize down. energy consumption and potential losses time you reprocess feed there will be some conditioning to capitalise on the windfall demand for maize how South American and East European/FSU Demand generally is usually more deterioration in some of the heat sensitive associated with the re-circulation system. Of all the process points in the feed mill, from China which we mentioned in our last maize crops issue. and expor ts Exports aren’t the biggest factor for the h a v e b e e n USA, accounting for about 10-12% of its total consistently INTERNATIONAL MILLING AND maize demand, the rest going to domestic under-rated in CEREAL INDUSTRIES MEETING feed, food, ethanol and other industrial outlets. recent years to Combined demand from these US domestic appreciate the th sectors fell by about 10% during the past possibility that international season of tight and expensive corn supplies maize supplies but the US Department of Agriculture reckons may continue www.jtic.eu that all of that lost demand will be made up on a larger 2.0 mm floating fish feed in 2013/14 (which started Serptember 1). It than normal seems a fair assumption. However, USDA’s scale next year ES ENC accompanying prediction that exports will too. NFER MULTILINGUAL CO China jump back by 67% in this competitive global environment inspires far less confidence. r e mains a n Reflecting these loosening supply/demand important fundamentals, the bellwether Chicago maize f a c t o r f o r futures market, which was still trading over maize demand food growing $7/bu in July (about $280/tonne) has recentlydogas its 14mm affordable. reliable. safe. plummeted as low as $4.50/bu (about $177) feed demand Insta-Pro’s new medium shear extruder answers the market’s demand November • Cereal sustainability • Interaction between genotype and which extrusion solution that effectively produces pet and fish is the cheapest it’s been for about boosts Inventory management systems environment for a low cost and bin level indicators three years. The USDA meanwhile predicts impor ts. Yet feeds of high quality, equal to that of higher cost extrusion systems. • Regulatory changes in • Sensitivity to gluten: contemporary a US seasonal ex-farm price during 2013/14 h e r e t o o , Reims - France road transport myth and medical truth • Ease of operation • Ability to make pellets of different shapes of between $4.40 and $5.20, median point domestic • Low cost of production and a variety of sizes, down to 2mm $4.80, which is about 30% below the average maize output • Thru capacities up to 1.5 TPH price achieved last season and about 22% is continuing Don’t paythan in than you have to, to get the qualityx c e e d to e cheaper more 2011/12. TORS & quantity you need. EXHIBI INTERNATIONAL Forward maize futures are currently about western Contact us athigher than current delivery on the analysts’ to 8.5% +515-254-1260 or visit us at insta-pro.com/medium • Enlarge your network. learn more. assumption that recovering US demand and estimates. • Find n partners. Rotary Pressure Switch Vibrating Rod ew Capacitance Probe a possible switch in sowings away from this The Chinese • Increase your knowledge. grain and towards soyabeans (which are now authorities • The place to be ! far more attractively priced for the farmer) also see their will occur in Latin America this autumn and imports below tiple batch-weigh scales and digital PLC controls should provide an accuracy of 0.5 percent or less. OUR OUTPUT COMES IN ALL SHAPES AND SIZES BIN LEVELS without climbing! 64 JTIC smartBob and eBob software 4 13 & 14 2013 110 Binmaster level controls info@binmaster.com • www.binmaster.com www.jtic.eu +515-254-1260 | Insta-Pro.com | info@insta-pro.com && Grain feed millinG technoloGy Grain feed millinG technoloGy AEMIC - 268 rue du Fg. St Antoine – 75012 Paris - France © 2013 BinMaster, Lincoln, Nebraska uSa ) : +33 (0)1 47 07 20 69 / 6 : +33 (0)1 44 24 56 25 / aemic@wanadoo.fr / www.aemic.com September - october 2013 | 11 September - october 2013 | 47
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  7. 7. predictable than supply and therefore less likely to drive up maize costs. The more potent factor (far more important even than farmers’ cropping plans) is the weather and its ability to affect sowing, crop development and yields. If, for example, the Latin Americans had one of their periodic droughts in last quarter 2013 or first quarter 2014 – or the US had a wet planting season and/or a summer 2014 drought/heatwave, maize supplies could be much tighter and costs could be looking very different in six months/one year’s time. But in the meantime, consumers, especially in the feed and industrial sectors look set to enjoy a fairly lengthy period of low costs. Given that record maize prices helped lift wheat values to unusually high levels last year, questions are now being asked whether wheat has fully discarded the ‘borrowed’ portion of the past year’s larger than usual premium over the feed grain. Although US (Chicago soft red winter) wheat futures are about a third cheaper than the peaks reached this time last year, they have not broken significant new ground the two months since our last review and are still almost 10% dearer than their mid-2011 peak – so the premium has actually widened out. However, US hard spring wheats for export, while not much cheaper than in Jul/Aug, have 48 | September - october 2013 edged down under ample supply outlooks and by enough to set three-year lows (see chart). European milling wheat prices also set threeyear lows in August, from which they have recovered only partially, then slumped again. The main factors here have been the weak US grain markets, strong export competition and higher than expected domestic wheat output. The latest series of increments to most EU wheat harvest estimates from the Commission, private analysts and official/national bodies now suggests the Union has produced about 7.5% more wheat this year than last – quite an achievement after all the weather scares. French, even UK, quality has turned out far better than expected earlier in the summer when late crops had too much rain and not enough sunshine which willk be good news to domestic millers. EU soft wheat exports are tending to prevent prices falling further at this stage, having started the season with a bang and currently running at almost twice the rate of this time last year. The USDA expects the full season’s EU exports to rise by a mere 3.6% from last season’s 22.2m and from just 16.7m the year before. However, reaching that figure, let alone maintaining the recent stellar pace, may require some competitive – i.e. lower – pricing amid the strong competition from other exporting countries, especially the FSU trio - Russia, Ukraine and Kazakhstan. These three are currently expected to raise exports from 25.5m to 36m and in recent weeks have continued to undercut EU wheat prices in some of the key import markets – especially Egypt. The FSU countries might have even more than that to sell abroad. While latest USDA forecasts have raised their combined wheat production to 93m tonnes – almost 30m more than last year - some trade analysts believe their final crop total could be as much as 5-8m tonnes higher still. However, while Russia is likely to remain the largest exporter in this group, it may be handicapped somewhat by quality issues following rain during the later (40%) stages of the harvest. This is expected to result in much less wheat than from last year’s crop (maybe 5m less) grading No 3 milling. In combination with plans to replenish depleted intervention stocks, this might limit exports at a lower level than markets expect as well as putting a floor under Russian prices, some traders suggest. Good news for millers who import North American hard wheats to beef up the quality of their grists is the much larger than expected Canadian wheat crop, recently estimated at a massive 31.5m tonnes against last year’s 27.2m and the recent annual average between 23m and 25m tonnes. The lion’s share of this is higher grade spring wheat. Canada has reportedly already begun to compete with the US for recent windfall orders from the world’s second largest importer, Brazil and is expected to be an aggressive seller into the autumn/early winter months. After some bouts of dry weather, estimates of Australia’s traditionally higher quality crop have recently been trimmed by some analysts to around 24.5m tonnes. However, this too would still be one of its bigger harvests and about 2.5m over last year’s – and some welcome rains seem to be on the way here too as we go to press. Like the US and the EU, Australia has been selling wheat to China, this year’s biggest import growth market (from 3m to a forecast &feed millinG technoloGy Grain
  8. 8. FEATURE COMMODITIES Therefore, it is important to optimise the scheduling/production planning to ensure the flush process is only used odd man out is no recent descent in The where there in the alternative. This can be costs has been soya milling and feed ingredient achieved has effectivemeal whichmostactually trended up, dragging ly through oilmeal/protein the rest of thePLC control complex with it. whichmain prevent cross uncertainty over The can factor has been contamination forthcoming US soyabean the size of rthe scheduling A programme the crop. andfew months ago this was expected flush batch automatically to rebound from last year’s rather dismal 82m before sensitive 93m. tonnes toaas much as feed However, a lot of type. planned acreage was delayed by wet weather The unsown while in contrast to last and wentpelleting lines may also require flushing and this again will impact from an even year, when crops were rescued significantly on production cost. worse fate by timely finishing rains, this year Some extended run the same feed has seen anfeed mills drought spoil good material used for the mixer toward crop interim development, right up flush through to bulk or packing silos. This is certainly maturity. Because the crop was planted and is wasteful because has barely begun in midrunning late, harvestof the time involved and the manpower required to pack or transport September, leaving yields largely to guesswork. the rework back to the estimate already The USDA has cut its crop raw material silos or intake. to 85m only to pushed it back to 88m in Some Now the Department’s Farm September.feed companies use a specified quantity of the first batch of feed, following Service Agency has stirred the pot again with a the coccidiostat or medicine, and run this forecast of higher unplanted and unharvested through the the same time, the rework. acres while, atline and recirculate astrade is Once again this is wasteful yields. Traders reporting better tha expectednot only for the reasons already listed, but – a crop no will make what they will of thatbecause each time than last year’s 82m or closer to the better you reprocess feed there will be some deterioration in some lower heat would last USDA estimate? Theof the figuresensitive tiple batch-weigh scales and digital PLC controls should provide an accuracy of 0.5 percent or less. Oilmeals 9.5m tonnes from all suppliers). Even in a Hand shrinking export premix season of additions and supply from the addition former big supplier Argentina, it all adds up to The losses that can occur at the leading a highly competitive market amongthis stage are significant because 2013/14.impact of putting exporting nations in of the the wrongthat, world the wrongtradetype, Against additive into wheat feed is or the impact of under or over from 147m expected to expand quite sharply dosing. The most effective method to time to over 152m tonnes (only the second reduce the risk 150m) largely on the back process ever over of errors is to automate the of the using either barcoding or The figure could boom in Chinese demand. weigh stations or a combination of both. This has the advantage even reach a new record level, several million of providing complete traceability which can tonnes higher than this after Iran’s president also limit need if an error does occur. signalling a losses for 7m tonnes of imports compared with the 4.5m used in the USDA Flush forecast. batching As In rough feed mills forwardapricing, the a many guide to there is requirement to flush or purge the only a smallpelleting futures markets show mixer and 2-3% lines to avoid distant months, EU milling premium on thecarryover of specific materials or feed additives, coccidiostats and mediwheat futures hardly any premium at all cines. for the mid-2014 positions. The USDA’s The for seasonal average prices on forecast method of how the mixer and pellet lines market is will impact in a much loss the USare flushed meanwhile how range of is associated median process. Mixer flush$6.50/7.50, thewith this point equivalent to ing is usually done using a defined quantity around $257/tonne versus the past season’s of average and 2011/12’s $266/tonne. $285raw material such as corn, which is then re-routed back to a nominated silo for The cheapest ‘Black Sea’ milling wheat is inclusion selling currently for $247/250 meanwhileinto specified feed types. Each flush batch represents cost in terms of hold up per tonne. Can even these pricesmixer time, energy consumption and potential losses if maize stays $2/bu ($75/tonne) and more associated with the re-circulation system. cheaper? Time will tell. IN PRINT Get the industry’s longest standing title delivered direct to your door, six times a year with a GFMT subscription January ue : & is iss storage • hand In th Bulk ling 2011 • African es advanc g feed millin Animal the most of in is one activities buoyant related field the agri • • • A glanc decade • ions open in line Get analysis solut improved for Process rtunities new oppo quality and prof it safety Food grain in the milling ry indust ervatives recurring • Pres vatives are a sions ent in • RecPreserespublic discus topic in advancgrain rapid testing capacity Digital ve microwa moisture ment Insects measure • Controlling & with heat al grain • Glob markets feed publish Optical should be for inclusion ies - first industr n age and us optio t cleaning 1 feed milling GFMT12.02.indd flour & as a serio ern whea the global mod ine for in any magaz iption A subscr plant .indd GFMT12.01 & feed In this issue: • Improving supply from farm to fork • Victam Asia Product Showcase • Global grain & feed markets 1891 - first published in & feed milling industries for the global flour A subscription magazine ed in 1891 17/04/2012 ting l sor come of Optica ng has considered sorti 1 tries g indus - first shed publi Die and roll re-working machines WE’RE ON OUR WAY TO YOU! Assessing cereal quality parameters issue: In this Grinding by a proven • easing makes your concept • Incr age simple stor choice oxins Mycot view an over se for Databal diet anima tion ula form Efficiency in flour milling ques: • Energ last technie to y saving • • smartBob and eBob software 2012 ry - Februa • mber - Dece without climbing! 2012 March - April mber Nove 02/02/2012 13:05 10:12 in 1891 11 30/11/20 17:28 millin See all of our magazines online. You will also find a dog food 14mm full archive of back issues, as well as downloadable Insta-Pro’s new medium shear extruder answers the market’s demand features for a low cost extrusion solution that effectively produces pet and fish feeds of high quality, equal to that of higher cost extrusion systems. zine n maga for the al flour to large crops in Canada, the CIS countries Pelleting crumbling and and Western Europe. With good crops of conditioning cottonseed, palm kernels, groundnuts and Of all puts world points in the on track copra, this the processoilseed output feed mill, BIN LEVELS TOUR2013 OUR OUTPUT COMES IN ALL SHAPES AND SIZES A subscription magazine for the global flour & feed milling industries - first published in 1891 2.0 mm floating fish feed suggest another very tight season for the US with riskily low finishing stocks in the pipeline for the second year running. Even the higher crop figure would not spell abundance. However, there are mitigating factors. Chief amongst these is the Latin American crop harvested last spring which the USDA has increased to almost 141m tonnes – 31m more than last year. That not only raises world soyabean supply to a new record 267.5m tonnes but results in world stocks growing from 55m to 61.5m. As soyabean prices vitamins as well as the risk of over-gelatiniremain high compared with maize, their main sation of starch leading Americas, the Latin competitor for land in theto poorer nutritional performance. producers are expected to up their acreage A more autumn (planting starts is to be yet again thisefficient flush procedure around able to use theon current pointers, USDA October) and flush batch as final feed. This can be done by either removing the coccidisees their output rising again to about 150.5m ostat or medicine in the final batch but addtonnes. This all pre-supposes good weather ing this to the existing feed Brazil basis that and it is a bit hot and dry in on theespecially when mixed with the original goes to plan, at the moment. However, if all batches it will only soya stocks will loosen further in the world represent a minor dilution. Once again the PLC closes at the end of August 2014. season thatpelleting control can control the routing of different feed types tocrops pellet Rapeseed and sunflowerseed each have line and ensure forecastscreated beforeand also exceeded a flush is this season the next sensitive feed type. (+3.6m and 5.4m tonnes respectively) thanks glob riptio A subsc .06.indd 1 ONLINE GFMT11 • Ease of operation • Ability to make pellets of different shapes • Low cost of production and a variety of sizes, down to 2mm • Thru capacities up to 1.5 TPH affordable. reliable. safe. Inventory management systems and bin level indicators NEXT STOP: ANUGA 5-9 October 2013, Cologne, Germany Boulevard Mitte, Boulevard 045 Don’t pay more than you have to, to get the quality & quantity you need. NEXT STOP: SEAFOOD BARCELONA Contact us at +515-254-1260 or visit us at insta-pro.com/medium to learn more. 22-24 October 2013, Barcelona, Spain Rotary Pressure Switch Vibrating Rod Hall 1, Booth No. 3026 www.oj-hojtryk.dk Capacitance Probe A/S Phone: Check out our website 22 Binmaster +45 75 14 for55controls level O&J HøjtrykDK-6705 Ørnevej 1, Fax: +45 82 28 91 41 events happening near you! Global Miller THE info@binmaster.com • www.binmaster.com Esbjerg Ø mail: info@oj-hojtryk.dk www.tour2013.org © 2013 BinMaster, Lincoln, Nebraska uSa For more information about our other publications and services visit: www.perendale.com +515-254-1260 | Insta-Pro.com | info@insta-pro.com CVR.: 73 66 86 11 &feed millinG technoloGy &feed millinG technoloGy September - october 2013 | 11 September - october 2013 | 49 Grain Grain AD_o&j.indd 1 21/11/2012 15:08
  9. 9. for a new record 495m tonnes. Amid looser supplies and cheaper prices, world oilmeal consumption is expected to grow by 3.3% compared with less than 1% over the past season. By far the largest component in oilmeal growth will remain China (30% of the total increase) but healthy gains are also seen in demand within the USA, Europe, the Latin American soya producing countries, India, Mexico, Japan and other moderate sized consumers. Soya meal, which forward markets suggest will be about 5-6% cheaper this time next year, will again take most of the growth in global oil meal demand. • Recovering ‘Black Sea’ (former Soviet country) crops may now live up to, even exceed, their early promise in terms of tonnages but there may be some quality issues after wet harvests for the latter stages European, North American and Australian wheat exporters and an anchor on both milling and feed grain values in Europe and around the world. Continue to watch for possible government intervention in Russia to support prices and rebuild depleted reserve stocks but we expect this to be on a smaller scale than earlier thought and the effect temporary. • Despite the Black Sea competition, the EU wheat export campaign is off to a roaring start, well ahead of the pace needed to meet the near record 23m tonnes forecast by the USDA. While this year’s EU crop was a big one (+8m tonnes), keeping up this export pace would lower stocks and could support prices at a higher level – although this situation could be corrected by another season of large impoirts of cheap maize from Ukraine and other non-EU countries and by EU wheat prices become less competitive when/if prices did rise. (the past season’s EU maize imports hit a modern record of 11.3m tonnes and at least 7.5m is expected to come in this season). of Russia, Ukrainian and Kazakh harvests. The later-sown spring wheat and corn crops will be most at risk. At this stage, however, these countries continue to set the bar low for export prices – a challenge to • Canadian, Australian and Argentine crops are all expected to rise this season – by a combined 10m tonnes. Along with the US and Europe, these producers will be able to keep importing countries well supplied with KEY FACTORS AHEAD – WHEAT 50 | September - october 2013 quality milling wheat supplies, keeping costs in this sector under control. • A good Monsoon is boosting India’s crop which may turn out larger than expected. It has huge stocks, much of them inadequately stored and better sold into export markets at a low price/loss than spoiling. The government plans to free more expor ts which could help lower feedwheat prices internationally. • The surge in Chinese wheat imports seems to have peaked for now but second largest importer Brazil has been buying heavily due to a frost damaged domestic crop while the top importer Egypt has returned as a big buyer of months of absence during its political/financial crises. Iran has signaled much larger import needs and the Mideast region generally will probably want to keep wheat and other food stocks high in these uncertain times, especially given that current wheat import prices are so much lower than they were this time last year. • A record world maize crop will keep wheat use in feeds below the peak level of two years ago. But food, bio-fuel and other outlets will still add about 3.8% or 26m tonnes to world total wheat consumption in 2013/14. That means only modest stock growth but the global wheat inventory will still be large in relation to consumption needs. COARSE GRAINS • How much does the USDA need to trim off its US final acreage figure and will the excellent, better than expected yields seen from the early harvest hold up as the combines roll into the drier parts of the Midwest and Northern Plains? Clearly there is potential for the maize crop number to go either way (probably down a bit). Either way, the trade consensus remains fairly confident that the US will build carryover stocks to very comfortable levels by the end of 2013/14. • Strong export competition from Ukrainian, second crop Brazilian and other maize suppliers will continue to undercut US prices and limit the traditional top exporter’s world market comeback – bearish for prices. • Europe’s own maize crop rebound should cut its import needs. Prices here should be kept in check by bigger supplies and by cheap and abundant maize imports from Ukraine • Cheaper prices are expected to win back the 10% of US corn consumption that was lost to last year’s record costs in feed and ethanol sectors – or is that a little optimistic? Some US traders have their doubts. • Will China spring more surprises with its maize import programme – or have we seen the bulk of this now? World corn supplies &feed millinG technoloGy Grain
  10. 10. COMMODITIES can certainly accommodate this without a strong price reaction. • Funds and other speculator s have recently had fewer reasons to invest in maize and other crop markets – indeed commodities per se – as opposed to rising stock markets. Their absence will be welcomed by consumers. • Will South American maize producers really sow smaller crops for harvest nex t spring as prices drop on world markets? It wouyld not surprise us if the region’s potential is being underrated yet again. . • The biggest barley crop in four years adds to the mix of abundant feed grain supply – up by over 6% in Europe. With maize, this will add to downward pressure on feedgrain prices. So will a larger sorghum crop, already helping to fill some of China’s feed impor t needs. side of the soya/oilmeal equation. Will it continue to buy such large amounts of US soyabeans as it has in the early weeks of the new season? Or will it try to delay purchases when possible to switch to cheaper Latin American suppliers? Although some analysts say China’s demand has been overrated, it continues to buy mega tonnages. • Big EU and CIS rapeseed & sunf lower seed and Canadian canola crops are helping to boost consumers’ global oilmeal choices beyond ‘k ing soya.’ • If the South Americans continue to expand sowings and get the right weather, soya costs may have further to fall. ONE SHOW OILMEALS/ PROTEINS • Just where will the US soyabean crop end up – 82m, 88m tonnes? Even the low figure does not necessarily spell a bull market amid the abundance of South American supply. • However, traders will want to s e e p r oof of this situation continuing – i.e. the next lat-Am crops up and running. • China will remain t o p i nf l u e n ce on the demand &feed millinG technoloGy Grain THREE POULTRY FEED MEAT INDUSTRIES The World’s Largest Annual Poultry, Feed, and Meat Technology Exposition • Over 26,000 industry leaders from over 110 countries • Over 1,100 exhibitors ranging from production to point of sale • Over 24+ acres of exhibit space • Exceptional educational programs scheduled for the entire week • One of the most affordable attendee registration fees in the world January 28 - 30, 2014 Georgia World Congress Center Atlanta, Georgia USA www.ippexpo.org September - october 2013 | 51
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  12. 12. LINKS Photographic & Graphic Industry Toiletries & Hygiene Industry Others This digital Re-print is part of the September | October 2013 edition of Grain & Feed Milling Technology magazine. Content from the magazine is available to view free-of-charge, both as a full online magazine on our website, and as an archive of individual features on the docstoc website. Please click here to view our other publications on www.docstoc.com. September - October 2013 et Food dustry first published in 1891 • The holistic approach to avoid losses in the feed mill In this issue: • • Sieving technology in feed pellet production • Mixed integer optimization: Traceability a new risk in maize production? • See the full issue • Visit the GFMT website • Contact the GFMT Team • Subscribe to GFMT a new step in formulation software • Weighbridges the workhorses of industrial weighing • High-precision sensors: the ideal solution for measuring grain humidity INCORPORATING PORTS, DISTRIBUTION AND FORMULATION A subscription magazine for the global flour & feed milling industries - first published in 1891 To purchase a paper copy of the magazine, or to subscribe to the paper edition please contact our Circulation and Subscriptions Manager on the link adove. INFORMATION FOR ADVERTISERS - CLICK HERE Article reprints All Grain & Feed Milling Tecchnology feature articles can be re-printed as a 4 or 8 page booklets (these have been used as point of sale materials, promotional materials for shows and exhibitions etc). If you are interested in getting this article re-printed please contact the GFMT team for more information on - Tel: +44 1242 267707 - Email: jamest@gfmt.co.uk or visit www.gfmt.co.uk/reprints www.gfmt.co.uk

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