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Digital Re-print -
May | June 2013
Global Feed Markets: May - June 2013
www.gfmt.co.uk
Grain & Feed MillingTechnology 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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©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
GLOBALGRAIN & 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.
So why have
prices – which
are still relatively
high compared
with their past ten
or twenty year
averages – stayed
more or less ‘range-
bound’ rather than
collapsed since
these ample supply
outlooks were
touted in mid-May?
H
UGE, record crops of wheat, maize
and soyabean are on their way
according to the keenly awaited first
view of the new 2013/14 season from
the US Department of Agriculture.
USDA’s big supply numbers have surprised many
in the trade, implying more than enough of all
the major grain and feed raw materials to meet
considerable growth in world demand during the
year ahead.
Moreover, if USDA is right, the low coarse grain
and oilseed stocks that have characterized the
world market for the past season can be rebuilt
to more comfortable levels while already adequate
wheat stocks will also get a useful top-up.
So why have prices – which are still relatively
high compared with their past ten or twenty year
averages – stayed more or less ‘range-bound’ rather
than collapsed since these ample supply outlooks
were touted in mid-May? The answer may be, ‘give
it time – and favourable weather.’
Certainly at this early stage there are various
reasons to be cautious toward these bearish supply
numbers. Wheat output, for example, has been
forecast to rebound from last year’s disappointing
655.6m to 701m tonnes – 21m more than the
International Grains Council’s preliminary forecast
issued in late April and 6m more than the UN
Food & Agriculture Organization predicted two
days before the USDA forecasts.
Of the latter’s
45.5m tonne global
year-on year increase,
a full 30m tonnes is
down to expected
wheat crop recoveries
in the former Soviet
Union, where yields
were devastated in
some regions last year
by prolonged drought
and heatwaves. Yet
Russian and Ukrainian
crops have had
numerous problems
during the winter and
spring from frosts to
lack of rain and it remains quite feasible that their
combined output could be over rated by USDA
by as much as 6m to 8m tonnes.
Some analysts also have their reservations
toward USDA’s EU crop forecast of 138.8m
tonnes (+6.7m on year) amid too much rain in
northwestern member states and some heat and
dryness issues already being reported in some
eastern/southern countries. Australia (seen
+2.5m) has also had some problems with lack
of rain in key states and could yet end up with a
similar or smaller crop that last year’s.The USA
also continues to suffer problems with drought in
its key hard red winter wheat belt, normally the
largest source of wheat for this the world’s largest
exporter - although the USDA’s 56m tonne total
US wheat crop forecast has probably already been
fully factored in by the market in recent months.
On the other hand, Canada and Argentina should
have bigger crops on larger sown areas while India
seems to be heading for at least its second largest
crop ever.
Even if world wheat output only rises by, say,
30m tonnes, the concentration of extra supplies in
exporting countries suggests a more competitive
market ahead in the search for import custom.
Wheat trade may decline slightly in 2013/14 due to
bigger domestic crops in some importing countries
like Turkey and Morocco and ‘swing’ importers of
feedwheat turning back to more abundant maize.
New crop forecasts keep on growing
Grain&feed millinG technoloGy52 | may - June 2013
COMMODITIES
World consumption of wheat is seen 20m
tonnes higher next season but increases will be
concentrated within big producing countries
– especially Europe, India and Russia. Overall,
world stocks are still expected to increase by
about 6m tonnes to 186m, equal to about
26.8% of consumption or 14 weeks’ supply – a
far looser ratio than that expected for maize,
for which both USDA and the futures markets
forecast prices far lower than those of wheat
in the season ahead (an anomaly that will
probably be resolved by wheat prices falling
rather than
those of maize
rising).
Despite the
better supply
outlook, as we go to press CBOT wheat
futures are showing price premiums on the
forward months ranging up to 7% more for
March 2014. The price situation is reversed
in Europe, however, where new crop bread
wheat prices are shown about 14% cheaper
than spot delivery on the Paris milling wheat
futures market. London feedwheat futures
– which have actually been running close to
parity with better quality French milling wheat
on some positions – look rather over-priced,
especially given the discounts being quoted
on new crop wheat and maize from the Black
Sea region.
Grain&feed millinG technoloGy may - June 2013 | 53
Annual Feed Conference
25th
26th
June 2013
The following papers have already been confirmed:
RUMINANTS
Low protein diets for dairy cows
-­‐ Kevin Sinclair, University of Nottingham
Nutrition, health and fertility in dairy cows
-­‐ John Mee, Teagasc
Mineral requirements and supply on dairy farms
-­‐ Liam Sinclair, Harper Adams University College
-­‐ Nigel Kendall, University of Nottingham
Global milk and feed price trends and influences
-­‐ John Allen, Kite Consulting
NON-RUMINANTS
Environmental impact from poultry operations: influence of
nutritional inputs
-­‐ Ilias Kyriazakis, Newcastle University
Home grown proteins in pig and poultry diets
-­‐ Jos Houdijk, SRuC
Nutritional quality of soya products for non-ruminants.
-­‐ Julian Wiseman, University of Nottingham; Mick Hazzledine,
Premier Nutrition
For further details visit: www.nottingham.ac.uk/feedconf
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FEATURE
16.5% of consumption or just over 8½-week’s
supply.
Among the other coarse grains, consumers
are promised a better balanced barley market
if crops increase as expected by 8m to a total
138m tonnes, mainly in Russia (up almost
4m and the EU (plus 1m). Although barley
starting stocks for the new season will be
lower, a limited increase in demand (mainly
within Russia) is expected to allow these to
recover somewhat during 2013/14. Along with
the bigger competing supplies of wheat and
maize this should held keep prices down for
feed barley users.
Sorghum supplies are also seen substantially
higher in 2013/14 – plus about 5m, largely
due to much bigger sowings in the USA.
Although a lot of this will go to its domestic
feed consumption, there will be more available
for export too.
A big jump in world soyabean output in the
coming season is expected to result in much
cheaper prices for oilmeal proteins across
the board. This year has already seen record
crops in South America, where production
has increased by 32m tonnes or almost 29%.
The new season is expected to see more
beans sown in the USA which could also
produce its biggest ever crop. USDA’s first
forecast is 92.3m tonnes – up 10m on the
year, if normal weather allows trend yields.
USDA also expects Brazil and Argentina to
keep increasing output, resulting in world
production increasing by another 16.4m
tonnes. This would put world supply in surplus
for two successive seasons and, on current
estimates, add about 20m tonnes to the stock
carried over from one season to the next –
also a record level.
Currently, USDA is forecasting new season’s
US producer prices of soyabeans will average in
a range of $9.50/10.50 per bushel – the mean
being about 26.5% below the average for the
past season. Soya meal ex-US crushing mill is
seen averaging in a range of $280/320 per
short tonne (2,000 lb), the mean representing
a drop of 29% on the current season. The
Chicago soya meal futures market also sees
prices dropping by about 26% from current
levels by the end of the year.
next year. It
may well be
too pessimistic,
bearing in mind
t h a t U S DA
forecast Brazil’s
2012/13 crop
at 67m and has
now raised that
to 76m (whereas
Brazil’s government and at least one private
estimate suggests 78m tonnes.
Consumption of maize is expected to
increase in 2013/14 by almost 73m tonnes
of which 31.4m will be within the US itself
as the feed and ethanol industries (+23.5m
and 6.4m tonnes usage respectively) respond
to much looser supplies and much cheaper
prices. USDA forecasts a seasonal ex-farm
price range of $4.30/5.10 per bushel compared
with this season’s $6.70/7.15, the median point
down by almost 32% (new crop Chicago maize
futures suggest
prices about
25% cheaper
than current old
crop deliveries).
Following the
pattern of recent
years, the next
biggest increase
in global maize
consumption is
expected within
China where
demand goes up
by 17m tonnes,
mainly in its feed industry to a new record
224m.
Other country increases in maize use are
mainly one million tonnes or less.
European maize consumption is not
expected to rise because of the bigger wheat
crop taking more feed demand. This situation
should also allow Europe to reduce maize
imports from this season’s record 10.5m to
7m tonnes. A bigger
Mexican crop will also
reduce that country’s
import needs by 1m
tonnes but USDA
still expects overall
world maize trade
to increase by about
4m tonnes as China
increases imports
by that amount and
some other maize
importers, largely in Asia, avail themselves of
cheaper export supplies.
The bottom line for maize – if USDA’s crop
estimates hold good – is for substantial surplus,
pushing US seasonal ending stocks back to
a nine-year high of 50.9m tonnes and world
carryover to a 13-year peak of 154.6m – about
One concern, especially for the UK, remains
the adequacy of quality wheat supplies. If this
year’s UK crop drops again as feared after a
tough winter (USDA says 13% down at 11.55m
but some in the trade have been talking 20%
losses) then clearly more imports will be
needed.
How costly that may be depends on
European and other crop weather in coming
weeks and months. If Germany and France get
enough sunshine to generate good proteins,
Hagbergs etc in their wheat and if Canadian
and Australian crops perform as planned, this
need not necessarily add up to soaring bread
prices ahead.
For maize, USDA has taken a fairly
optimistic view of US 2013 crop prospects
which it puts at 359m tonnes, near the top
end of the range within which most trade
forecasts fall (340/360m with a few 370 out-
riders). Some caution is required for this
figure as rains and cold weather have put
sowing weeks behind normal across the US
Corn Belt. That may result in some designated
maize land being sown to soybeans instead
and it may also – if these delays continue into
June – start to have a significant impact in
lower yield potential. No-one wants to take
a 360m tonne or higher crop for granted after
what happened last year when drought cut
over 100m tonnes off USDA’s early 376m
tonnes prediction.
The US forecast accounts for no less
than 78.5% of USDA’s foreseen increase in
global production (+109m to a new record
966m tonnes). The remaining increases are
mainly down to the EU crop recovering by
7.1m tonnes, CIS crops up by a combined
7m tonnes, China’s rising 4m and Serbia’s by
3.5m tonnes. Interestingly, USDA has Brazil’s
crop retreating from this year’s record 76m
to 72m tonnes – the only major decline. This
supposes more Brazilian emphasis on soybeans
Grain&feed millinG technoloGy54 | may - June 2013
COMMODITIES
food supply (rice as well as grains and oilseeds)
and stubbornly weak crude oil and metal
prices ensuing from macro-economic issues
including sluggish economic growth in the US,
China and the Euro zone. That all suggests
lower raw material costs on the way, especially
for the feed industry.
KEY FACTORS AHEAD –
WHEAT
• Those big Black Sea crop estimates are
looking more likely by the week, implying a
surge in export competition during the next
few months. It is hard not to see this helping
to bring down wheat prices on world and
EU markets.
US crop. Much of that
extra demand for US
soya came from the
top importer China
although this pressure is
slackening as, like other
buyers, it starts to focus
instead on cheaper new
crop offers.
Soya will get cheaper
as the year rolls on,
demanding prices of
other less-valuable oilmeals like rape and
sunflower meal follow suit.
This glowing picture for forward supply
must of course be hedged with the obvious
caveat. It is only May as this review goes to
press and the weather could yet spoil things
by the time northern hemisphere wheat and
barley is harvested in Jun, July and August and
maize and soybeans from late August onward.
However, at this stage, the ‘outside’
interests that have helped exaggerate price
strength in recent years don’t appear to be
interested in weather risk and seem to be
taking USDA’s vaunted season of plenty at
face value. Hedge funds, pension funds, banks
and other investors are also reported to be
taking a fairly negative view of commodities
in general amid the better outlook for world
World oilseed production is also expected
to get a top up from larger sunflower and
rapeseed crops, adding about 5.5m tonnes
more to total supplies and expanding total
world oilseed carryover stocks to a record
82.6m tonnes. The EU should see a modest
uptick in its rapeseed crop but may be able
to avail itself of more imports from larger
crops in Ukraine, Russia and Australia. The
CIS countries also expect a big hike in their
sunflower seed crops.
Soya markets have actually been stronger
over the past two months for several reasons.
Brazil’s harvest has been delayed by weather
and transport/port infrastructure problems
handling record crops, not only of soybeas
but of maize and sugarcane too. Argentine
suppliers have also been slower to move
their crop than the markets expected due
to high inflation encouraging hoarding and a
poor exchange rate reducing the real income
from exports sold in dollars. Although South
American exports of both beans and meal
have now begun to pick up, the earlier delays
drive a lot of unexpected import demand to
US shores and the resultant strong exports
of both beans and meal resulted in crushers
and shippers competing for a supply that
had already fallen short of expectations
after last year’s somewhat disappointing
Grain&feed millinG technoloGy may - June 2013 | 55
Grain&feed millinG technoloGy may - June 2013 | 39
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• Plenty of sunny days are now needed to
bring late European, US, Canadian and
CIS crops on and good harvest weather
to maintain breadmaking quality. There
are some qualms about late sowing of
spring wheat in the USA – one of the
major sources of these high quality
breadwheats. However, Canada, a much
larger supplier, does now seem to be
getting its sowing done under adequate
moisture conditions on a much larger area
and will probably have one of its largest
crops ever. Australia – with its important
‘prime hard’ wheat production – is also
getting some much needed rains to plant
after some nail-biting dry days in recent
weeks.
• India faces storage problems as another near
record crop nears with warehouses already
overflowing. The solution – to drop export
price ambitions rather than watch quality spoil
under open storage – could mean downward
pressure on world wheat export prices –
just as the traditional cheap sellers – the CIS
countries - gear up to sell their large crops
abroad
• World wheat trade might be depressed by
larger than usual crops in Morocco, Turkey,
Egypt and other North African/Middle
eastern countries. Also, Iran now seems
to have completed a massive stockbuilding
programme and may import 5m tonnes less
next season. This is all likely to weigh further
on prices.
• The extent to which wheat use in feeds is
reduced if maize crops recover as planned.
That also depends on price. Wheat cannot
possibly sustain the big price premiums
over maize signaled on the forward CBOT
futures markets and still compete with
maize in feeds – either in the US or in
global markets.
MAIZE
• Will the US manage to plant all its planned
area on time to avoid ceding land to later-
sown soybeans or some yield penalty?
Current pointers suggest it could fall 1m to
1.5m acres short. Yet all the moisture holding
up sowing of the last 25% is a wonderful
start for the young crop, an early pointer to
bumper yields.
• Will US farmers get a ‘normal’ summer? The
first, possibly most important hurdle is mild/
warm rather than hot weather during the
key pollination period. With later sowings,
the ‘reproductive’ phase may be a few weeks
later in many areas, deeper into the period of
summer heat risk.
• Delayed marketing of Latin American maize
crops means these will be competing with
the US into the latter’s new season, starting
September 1 – later than usual.
• CIS countries have a much larger maize crop
on the way and will be cheap sellers. Whatever
crop the US ends up with, there will be less
need for US maize exports than usual.
• India may continue to contribute more to
world export supplies of maize
• If Europe’s own maize crop rebounds as
expected, import requirements will decline
• US corn consumption for ethanol is forecast
higher in 2013/14 but that can be comfortably
accommodated if the forecast US crop comes
through. US maize ethanol use may also be
restrained by larger imports of cheap ethanol
from a record Brazilian sugarcane crop
• China continues manage its constantly
growing feed demand with larger crops of
its own but it is expected to import more
in 2013/14. It has been buying recently and
larger than expected amounts going in this
direction could make US markets frisky as
purchases are anounced
• Speculators’ enthusiasm to buy into any crop
weather problems. This is becoming less of
a factor as the big crop numbers mentioned
above start to look attainable while the
‘managed money' community becomes
increasingly disillusioned with diminishing
returns from commodity investments in
general – from gold to oil. As we go to press
the regular report of US fund investments in
the top 11 commodity futures markets there
shows a 15% drop to its lowest level in six
weeks.
OILMEALS/PROTEINS
• Will the US get its soyabean crop planted
on time and may it pick up some extra
acreage from delayed maize planting? If
it does, soya prices will be under further
downward pressure into the last quarter
of 2013
• Planting and growing weather in the USA. A
later sown crop has plenty of moisture at this
stage. It looks likely to be a big one
• South America’s delayed marketing of record
crops means more competition well into the
USA’s peak, post-harvest marketing period.
That suggests more downward pressure on
soya costs.
• Chinese demand for soya meal is expected
to grow below its long term trend in
2013/14 but its demand for beans could
rocket as its domestic crop continues to
shrink. It remains far and away the largest
destination for US and global soyabean
exports
• Final EU/CIS rapeseed & sunflower seed
and Canadian canola plantings - and their
crop weather. After a delayed start,
Canada’s rapeseed crop could go either
way while Australia’s may decline after
rapid growth in recent years. The EU’s
crop may be slightly bigger. At the end of
the day, though, rapeseed, sunseed and
other oilmeal costs will have to follow
market leader soya’s probable downward
path.
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Contact us now. With new concepts and fresh ini-
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A subscription magazine for the global flour & feed milling industries - first published in 1891
INCORPORATING PORTS, DISTRIBUTION AND FORMULATION
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May-June2013
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validation of
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extrusion
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Global Feed Markets: May - June 2013

  • 1. Digital Re-print - May | June 2013 Global Feed Markets: May - June 2013 www.gfmt.co.uk Grain & Feed MillingTechnology 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
  • 2.
  • 3. GLOBALGRAIN & 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. So why have prices – which are still relatively high compared with their past ten or twenty year averages – stayed more or less ‘range- bound’ rather than collapsed since these ample supply outlooks were touted in mid-May? H UGE, record crops of wheat, maize and soyabean are on their way according to the keenly awaited first view of the new 2013/14 season from the US Department of Agriculture. USDA’s big supply numbers have surprised many in the trade, implying more than enough of all the major grain and feed raw materials to meet considerable growth in world demand during the year ahead. Moreover, if USDA is right, the low coarse grain and oilseed stocks that have characterized the world market for the past season can be rebuilt to more comfortable levels while already adequate wheat stocks will also get a useful top-up. So why have prices – which are still relatively high compared with their past ten or twenty year averages – stayed more or less ‘range-bound’ rather than collapsed since these ample supply outlooks were touted in mid-May? The answer may be, ‘give it time – and favourable weather.’ Certainly at this early stage there are various reasons to be cautious toward these bearish supply numbers. Wheat output, for example, has been forecast to rebound from last year’s disappointing 655.6m to 701m tonnes – 21m more than the International Grains Council’s preliminary forecast issued in late April and 6m more than the UN Food & Agriculture Organization predicted two days before the USDA forecasts. Of the latter’s 45.5m tonne global year-on year increase, a full 30m tonnes is down to expected wheat crop recoveries in the former Soviet Union, where yields were devastated in some regions last year by prolonged drought and heatwaves. Yet Russian and Ukrainian crops have had numerous problems during the winter and spring from frosts to lack of rain and it remains quite feasible that their combined output could be over rated by USDA by as much as 6m to 8m tonnes. Some analysts also have their reservations toward USDA’s EU crop forecast of 138.8m tonnes (+6.7m on year) amid too much rain in northwestern member states and some heat and dryness issues already being reported in some eastern/southern countries. Australia (seen +2.5m) has also had some problems with lack of rain in key states and could yet end up with a similar or smaller crop that last year’s.The USA also continues to suffer problems with drought in its key hard red winter wheat belt, normally the largest source of wheat for this the world’s largest exporter - although the USDA’s 56m tonne total US wheat crop forecast has probably already been fully factored in by the market in recent months. On the other hand, Canada and Argentina should have bigger crops on larger sown areas while India seems to be heading for at least its second largest crop ever. Even if world wheat output only rises by, say, 30m tonnes, the concentration of extra supplies in exporting countries suggests a more competitive market ahead in the search for import custom. Wheat trade may decline slightly in 2013/14 due to bigger domestic crops in some importing countries like Turkey and Morocco and ‘swing’ importers of feedwheat turning back to more abundant maize. New crop forecasts keep on growing Grain&feed millinG technoloGy52 | may - June 2013
  • 4. COMMODITIES World consumption of wheat is seen 20m tonnes higher next season but increases will be concentrated within big producing countries – especially Europe, India and Russia. Overall, world stocks are still expected to increase by about 6m tonnes to 186m, equal to about 26.8% of consumption or 14 weeks’ supply – a far looser ratio than that expected for maize, for which both USDA and the futures markets forecast prices far lower than those of wheat in the season ahead (an anomaly that will probably be resolved by wheat prices falling rather than those of maize rising). Despite the better supply outlook, as we go to press CBOT wheat futures are showing price premiums on the forward months ranging up to 7% more for March 2014. The price situation is reversed in Europe, however, where new crop bread wheat prices are shown about 14% cheaper than spot delivery on the Paris milling wheat futures market. London feedwheat futures – which have actually been running close to parity with better quality French milling wheat on some positions – look rather over-priced, especially given the discounts being quoted on new crop wheat and maize from the Black Sea region. Grain&feed millinG technoloGy may - June 2013 | 53 Annual Feed Conference 25th 26th June 2013 The following papers have already been confirmed: RUMINANTS Low protein diets for dairy cows -­‐ Kevin Sinclair, University of Nottingham Nutrition, health and fertility in dairy cows -­‐ John Mee, Teagasc Mineral requirements and supply on dairy farms -­‐ Liam Sinclair, Harper Adams University College -­‐ Nigel Kendall, University of Nottingham Global milk and feed price trends and influences -­‐ John Allen, Kite Consulting NON-RUMINANTS Environmental impact from poultry operations: influence of nutritional inputs -­‐ Ilias Kyriazakis, Newcastle University Home grown proteins in pig and poultry diets -­‐ Jos Houdijk, SRuC Nutritional quality of soya products for non-ruminants. -­‐ Julian Wiseman, University of Nottingham; Mick Hazzledine, Premier Nutrition For further details visit: www.nottingham.ac.uk/feedconf • Large scale building and structural fumigation with ProFume • Dedicated, experienced and certified fumigation technicians • ProFume service exclusive to Rentokil Pest Control • Nationwide coverage allows rapid response To arrange a free survey of your premises, or to gain further information on our Fumigation services please contact us. 0800 389 3643 rentokil.co.uk When only the experts will do! Pressure SwitchRotary Vibrating Rod Capacitance Probe BIN LEVELS without climbing! Binmaster level controls info@binmaster.com • www.binmaster.com © 2013 BinMaster, Lincoln, Nebraska uSa affordable. reliable. safe. Inventory management systems and bin level indicators smartBob and eBob software FEATURE • Large scale building and structural fumigation with ProFume • Dedicated, experienced and certified fumigation technicians • ProFume service exclusive to Rentokil Pest Control • Nationwide coverage allows rapid response To arrange a free survey of your premises, or to gain further information on our Fumigation services please contact us. 0800 389 3643 rentokil.co.uk When only the experts will do! Pressure SwitchRotary Vibrating Rod Capacitance Probe BIN LEVELS without climbing! Binmaster level controls info@binmaster.com • www.binmaster.com © 2013 BinMaster, Lincoln, Nebraska uSa affordable. reliable. safe. Inventory management systems and bin level indicators smartBob and eBob software FEATURE
  • 5. 16.5% of consumption or just over 8½-week’s supply. Among the other coarse grains, consumers are promised a better balanced barley market if crops increase as expected by 8m to a total 138m tonnes, mainly in Russia (up almost 4m and the EU (plus 1m). Although barley starting stocks for the new season will be lower, a limited increase in demand (mainly within Russia) is expected to allow these to recover somewhat during 2013/14. Along with the bigger competing supplies of wheat and maize this should held keep prices down for feed barley users. Sorghum supplies are also seen substantially higher in 2013/14 – plus about 5m, largely due to much bigger sowings in the USA. Although a lot of this will go to its domestic feed consumption, there will be more available for export too. A big jump in world soyabean output in the coming season is expected to result in much cheaper prices for oilmeal proteins across the board. This year has already seen record crops in South America, where production has increased by 32m tonnes or almost 29%. The new season is expected to see more beans sown in the USA which could also produce its biggest ever crop. USDA’s first forecast is 92.3m tonnes – up 10m on the year, if normal weather allows trend yields. USDA also expects Brazil and Argentina to keep increasing output, resulting in world production increasing by another 16.4m tonnes. This would put world supply in surplus for two successive seasons and, on current estimates, add about 20m tonnes to the stock carried over from one season to the next – also a record level. Currently, USDA is forecasting new season’s US producer prices of soyabeans will average in a range of $9.50/10.50 per bushel – the mean being about 26.5% below the average for the past season. Soya meal ex-US crushing mill is seen averaging in a range of $280/320 per short tonne (2,000 lb), the mean representing a drop of 29% on the current season. The Chicago soya meal futures market also sees prices dropping by about 26% from current levels by the end of the year. next year. It may well be too pessimistic, bearing in mind t h a t U S DA forecast Brazil’s 2012/13 crop at 67m and has now raised that to 76m (whereas Brazil’s government and at least one private estimate suggests 78m tonnes. Consumption of maize is expected to increase in 2013/14 by almost 73m tonnes of which 31.4m will be within the US itself as the feed and ethanol industries (+23.5m and 6.4m tonnes usage respectively) respond to much looser supplies and much cheaper prices. USDA forecasts a seasonal ex-farm price range of $4.30/5.10 per bushel compared with this season’s $6.70/7.15, the median point down by almost 32% (new crop Chicago maize futures suggest prices about 25% cheaper than current old crop deliveries). Following the pattern of recent years, the next biggest increase in global maize consumption is expected within China where demand goes up by 17m tonnes, mainly in its feed industry to a new record 224m. Other country increases in maize use are mainly one million tonnes or less. European maize consumption is not expected to rise because of the bigger wheat crop taking more feed demand. This situation should also allow Europe to reduce maize imports from this season’s record 10.5m to 7m tonnes. A bigger Mexican crop will also reduce that country’s import needs by 1m tonnes but USDA still expects overall world maize trade to increase by about 4m tonnes as China increases imports by that amount and some other maize importers, largely in Asia, avail themselves of cheaper export supplies. The bottom line for maize – if USDA’s crop estimates hold good – is for substantial surplus, pushing US seasonal ending stocks back to a nine-year high of 50.9m tonnes and world carryover to a 13-year peak of 154.6m – about One concern, especially for the UK, remains the adequacy of quality wheat supplies. If this year’s UK crop drops again as feared after a tough winter (USDA says 13% down at 11.55m but some in the trade have been talking 20% losses) then clearly more imports will be needed. How costly that may be depends on European and other crop weather in coming weeks and months. If Germany and France get enough sunshine to generate good proteins, Hagbergs etc in their wheat and if Canadian and Australian crops perform as planned, this need not necessarily add up to soaring bread prices ahead. For maize, USDA has taken a fairly optimistic view of US 2013 crop prospects which it puts at 359m tonnes, near the top end of the range within which most trade forecasts fall (340/360m with a few 370 out- riders). Some caution is required for this figure as rains and cold weather have put sowing weeks behind normal across the US Corn Belt. That may result in some designated maize land being sown to soybeans instead and it may also – if these delays continue into June – start to have a significant impact in lower yield potential. No-one wants to take a 360m tonne or higher crop for granted after what happened last year when drought cut over 100m tonnes off USDA’s early 376m tonnes prediction. The US forecast accounts for no less than 78.5% of USDA’s foreseen increase in global production (+109m to a new record 966m tonnes). The remaining increases are mainly down to the EU crop recovering by 7.1m tonnes, CIS crops up by a combined 7m tonnes, China’s rising 4m and Serbia’s by 3.5m tonnes. Interestingly, USDA has Brazil’s crop retreating from this year’s record 76m to 72m tonnes – the only major decline. This supposes more Brazilian emphasis on soybeans Grain&feed millinG technoloGy54 | may - June 2013
  • 6. COMMODITIES food supply (rice as well as grains and oilseeds) and stubbornly weak crude oil and metal prices ensuing from macro-economic issues including sluggish economic growth in the US, China and the Euro zone. That all suggests lower raw material costs on the way, especially for the feed industry. KEY FACTORS AHEAD – WHEAT • Those big Black Sea crop estimates are looking more likely by the week, implying a surge in export competition during the next few months. It is hard not to see this helping to bring down wheat prices on world and EU markets. US crop. Much of that extra demand for US soya came from the top importer China although this pressure is slackening as, like other buyers, it starts to focus instead on cheaper new crop offers. Soya will get cheaper as the year rolls on, demanding prices of other less-valuable oilmeals like rape and sunflower meal follow suit. This glowing picture for forward supply must of course be hedged with the obvious caveat. It is only May as this review goes to press and the weather could yet spoil things by the time northern hemisphere wheat and barley is harvested in Jun, July and August and maize and soybeans from late August onward. However, at this stage, the ‘outside’ interests that have helped exaggerate price strength in recent years don’t appear to be interested in weather risk and seem to be taking USDA’s vaunted season of plenty at face value. Hedge funds, pension funds, banks and other investors are also reported to be taking a fairly negative view of commodities in general amid the better outlook for world World oilseed production is also expected to get a top up from larger sunflower and rapeseed crops, adding about 5.5m tonnes more to total supplies and expanding total world oilseed carryover stocks to a record 82.6m tonnes. The EU should see a modest uptick in its rapeseed crop but may be able to avail itself of more imports from larger crops in Ukraine, Russia and Australia. The CIS countries also expect a big hike in their sunflower seed crops. Soya markets have actually been stronger over the past two months for several reasons. Brazil’s harvest has been delayed by weather and transport/port infrastructure problems handling record crops, not only of soybeas but of maize and sugarcane too. Argentine suppliers have also been slower to move their crop than the markets expected due to high inflation encouraging hoarding and a poor exchange rate reducing the real income from exports sold in dollars. Although South American exports of both beans and meal have now begun to pick up, the earlier delays drive a lot of unexpected import demand to US shores and the resultant strong exports of both beans and meal resulted in crushers and shippers competing for a supply that had already fallen short of expectations after last year’s somewhat disappointing Grain&feed millinG technoloGy may - June 2013 | 55 Grain&feed millinG technoloGy may - June 2013 | 39 CIMBRIA.COM CONVEYING | DRYING | SEED PROCESSING | ELECTRONIC SORTING | STORAGE | TURNKEY A/S CIMBRIA Faartoftvej 22 | 7700 Thisted DENMARK | Phone: +45 96 17 90 00 holding@cimbria.com STORAGE SOLUTIONS UTMOST CONTROL AND CARE ENSURES OPTIMAL STORAGE At Cimbria, we think of treatment and technology for every part and detail. We possess valuable knowhow and experience gained through more than 60 years of global activities. And together with our thorough knowledge of crop handling and processes, this contributes to a suc- cessful storage solution. 2 Flour Milling Training To enrol or find out more, contact: nabim 21 Arlington Street London SW1A 1RN UK Tel: +44 (0)20 7493 2521 Fax: +44 (0)20 7493 6785 email: info@nabim.org.uk www.nabimtraining.com ● Internationally recognised distance learning programme ● Developed for millers by industry professionals ● Studied every year by hundreds of millers worldwide An indispensable tool for developing the knowledge and competence of flour millers and their colleagues. A clear presentation of the industry and process, in 7 modules. Dedicated tutor support given to every student, providing professional guidance throughout the course year. 2013 Course Guide is available for download on the www.nabimtraining.com website. Enrolments in 2013-14 course session should be submitted – online or by email, fax or post – by August. Seven steps to success Safety, Health and Hygiene Wheat and the Screenroom Mill Processes and Performance Product Handling, Storage and Distribution Flour Power and Automation Flour Milling Management FEATURE
  • 7. • Plenty of sunny days are now needed to bring late European, US, Canadian and CIS crops on and good harvest weather to maintain breadmaking quality. There are some qualms about late sowing of spring wheat in the USA – one of the major sources of these high quality breadwheats. However, Canada, a much larger supplier, does now seem to be getting its sowing done under adequate moisture conditions on a much larger area and will probably have one of its largest crops ever. Australia – with its important ‘prime hard’ wheat production – is also getting some much needed rains to plant after some nail-biting dry days in recent weeks. • India faces storage problems as another near record crop nears with warehouses already overflowing. The solution – to drop export price ambitions rather than watch quality spoil under open storage – could mean downward pressure on world wheat export prices – just as the traditional cheap sellers – the CIS countries - gear up to sell their large crops abroad • World wheat trade might be depressed by larger than usual crops in Morocco, Turkey, Egypt and other North African/Middle eastern countries. Also, Iran now seems to have completed a massive stockbuilding programme and may import 5m tonnes less next season. This is all likely to weigh further on prices. • The extent to which wheat use in feeds is reduced if maize crops recover as planned. That also depends on price. Wheat cannot possibly sustain the big price premiums over maize signaled on the forward CBOT futures markets and still compete with maize in feeds – either in the US or in global markets. MAIZE • Will the US manage to plant all its planned area on time to avoid ceding land to later- sown soybeans or some yield penalty? Current pointers suggest it could fall 1m to 1.5m acres short. Yet all the moisture holding up sowing of the last 25% is a wonderful start for the young crop, an early pointer to bumper yields. • Will US farmers get a ‘normal’ summer? The first, possibly most important hurdle is mild/ warm rather than hot weather during the key pollination period. With later sowings, the ‘reproductive’ phase may be a few weeks later in many areas, deeper into the period of summer heat risk. • Delayed marketing of Latin American maize crops means these will be competing with the US into the latter’s new season, starting September 1 – later than usual. • CIS countries have a much larger maize crop on the way and will be cheap sellers. Whatever crop the US ends up with, there will be less need for US maize exports than usual. • India may continue to contribute more to world export supplies of maize • If Europe’s own maize crop rebounds as expected, import requirements will decline • US corn consumption for ethanol is forecast higher in 2013/14 but that can be comfortably accommodated if the forecast US crop comes through. US maize ethanol use may also be restrained by larger imports of cheap ethanol from a record Brazilian sugarcane crop • China continues manage its constantly growing feed demand with larger crops of its own but it is expected to import more in 2013/14. It has been buying recently and larger than expected amounts going in this direction could make US markets frisky as purchases are anounced • Speculators’ enthusiasm to buy into any crop weather problems. This is becoming less of a factor as the big crop numbers mentioned above start to look attainable while the ‘managed money' community becomes increasingly disillusioned with diminishing returns from commodity investments in general – from gold to oil. As we go to press the regular report of US fund investments in the top 11 commodity futures markets there shows a 15% drop to its lowest level in six weeks. OILMEALS/PROTEINS • Will the US get its soyabean crop planted on time and may it pick up some extra acreage from delayed maize planting? If it does, soya prices will be under further downward pressure into the last quarter of 2013 • Planting and growing weather in the USA. A later sown crop has plenty of moisture at this stage. It looks likely to be a big one • South America’s delayed marketing of record crops means more competition well into the USA’s peak, post-harvest marketing period. That suggests more downward pressure on soya costs. • Chinese demand for soya meal is expected to grow below its long term trend in 2013/14 but its demand for beans could rocket as its domestic crop continues to shrink. It remains far and away the largest destination for US and global soyabean exports • Final EU/CIS rapeseed & sunflower seed and Canadian canola plantings - and their crop weather. After a delayed start, Canada’s rapeseed crop could go either way while Australia’s may decline after rapid growth in recent years. The EU’s crop may be slightly bigger. At the end of the day, though, rapeseed, sunseed and other oilmeal costs will have to follow market leader soya’s probable downward path. 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  • 8. Grain&feed millinG technoloGy may - June 2013 | 19 WE’RE ON OUR WAY TO YOU! Check out our website for events happening near you! www.tour2013.org CALLING ALL PRODUCERS! Apply now for the G.A.P. Awards 2013 Deadline: 31 July 2013 Visit our website for more details: www.globalgap.org NEXT STOP: ISRAEL 11 June 2013 in Tel Aviv Held in collaboration with fresh AgroMashov – International Fresh Produce Summit & Exhibition TOUR2013 A subscription magazine for the global flour & feed milling industries - first published in 1891 Get the industry’s longest standing title delivered direct to your door,six times a year with a GFMT subscription A subsc riptio n maga zine for the glob al flour & feed millin g indus tries - first publi shed in 1891 In this issue: • Mycotoxins an overview • Database for animal diet form ulation techniques: A glance to last decade • Food safety in the grain milling industry • Recent advances in rapid grain testing Nove mber - Dece mber 2011 • African advances Animal feed millin g is one of the most buoyant activities in the agri related field • Optical sorting Optical sorting has come of age and should be considered as a serious option for inclusion in any modern whea t clean ing plant • Get in line Process analysis solutions open new opportunities for improved profit and quality GFMT11 .06.indd 1 30/11/20 11 17:28 INPRINT A subscr iption magaz ine for the global flour & feed milling industr ies - first publish ed in 1891 In this issue: • Increasing storage capacity • Digital microwave moisture measurement • Global grain & feed markets January - Februa ry 2012 • Bulk storage & handling • Preservatives Preservatives are a recurring topic in public discussions • Efficiency Energy saving in flour milling GFMT12.01 .indd 1 02/02/2012 10:12 A subscription magazine for the global flour & feed milling industries - first published in 1891 In this issue: • Improving supply from farm to fork • Victam Asia Product Showcase • Global grain & feed markets March - April 2012 • Assessing cereal quality parameters • Controlling Insects with heat • Grinding by a proven concept makes your choice simple GFMT12.02.indd 1 17/04/2012 13:05 See all of our magazines online. You will also find a full archive of back issues, as well as downloadable features ONLINE THEGlobal Miller For more information about our other publications and services visit: www.perendale.com FEATURE Grain&feed millinG technoloGy may - June 2013 | 29 wenger.com Belgium Taiwan Brasil China Turkey inDia What will tomorrow bring Turning ideas into opportunities. PrOgressiVe FOOD PrOCessing innOVaTiOn DisTinguishes BeTween a leaDer anD a FOllOwer. —Steve Jobs How are you going to navigate the ever-changing dietary landscape? Today’s dietary demands are literally all over the board. While some consumers are demanding nutritious foods that are quick and easy to prepare, others desire protein-rich food that fits a low-carb or vegetar- ian lifestyle. Still others are simply looking for enough affordable food to feed a growing population. At Wenger, we partner with food compa- nies to develop the processes and products they require to meet world consumer’s specific nutrition demands. Within our world-renowned Technical Center, we provide unmatched expertise for development challenges, whether it be for foods that are ready-to-eat, gluten-free, protein enhanced, heart healthy or have a low-glycemic index. And the list goes on. Contact us now. With new concepts and fresh ini- tiatives, we’re ready to help you meet the ever- changing requirements of the food industry. Wenger12_FOOD-GPS_190x132.indd 1 5/30/13 4:42 PM
  • 9. www.gfmt.co.uk LINKS • See the full issue • Visit the GFMT website • Contact the GFMT Team • Subscribe to GFMT A subscription magazine for the global flour & feed milling industries - first published in 1891 INCORPORATING PORTS, DISTRIBUTION AND FORMULATION In this issue: • Additives for flour standardisation Part II: Additives other than enzymes • High efficiency elevator buckets: modern vs traditional design • Feed focus Poultry • Assessing nutritional value with NIR May-June2013 • ‘Kill step’ validation of low-moisture extrusion • Adding value to feed milling with profit-oriented feed formulation • Pest control across the supply chain first published in 1891 This digital Re-print is part of the May | June 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. To purchase a paper copy of the magazine, or to subscribe to the paper edi- tion 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 informa- tion on - Tel: +44 1242 267707 - Email: jamest@gfmt.co.uk or visit www.gfmt.co.uk/reprints