Market Intel

Head Wind or Tail Wind?

The weather vane of conflict continues to spin in the stormy Middle East, racheting up costs around the world.

Unpredictable gusts of the current struggle impact the price of oil, oil products, and feed grade non-protein nitrogen sources, including urea. We’re looking forward to more predictable, light, southerly breezes.

Soybean meal: Board prices are up a bit with basis steady. Market Intel sources say soy processors are “not yet talking new crop, much less locking in prices.” Canola meal is moving in line with SBM “almost as usual” although new crop levels are up. This year’s China-Canada “cars for canola” trade deal is well in tow. Prices for old crop soy protein products remain steady, but “trying to go down.”  

Palm & bypass fat products: Palm product prices are up slightly but mixed in actual sales as vendors build in tariff adjustments and contract contingency clauses. “True value” for both palm products and calcium salts appear to be variable and the spread is wider than usual, especially for palm. Prices for by-pass blend prices are up with longer purchase lead times.

Amino acids: DL methionine prices have rocketed 70% over the past three months. It’s the “big ticket item” among micros. But it’s not alone. Liquid met pricing has gone “way high”. In the past month, hydroxy analog prices jumped 10%. Meanwhile, lysine pricing is quiet with imports down, still awaiting the outcome of anti-dumping charges. Threonine prices remain steady with tryptophan again slipping lower.

Vitamins: Now adequate supplies support steady prices for vitamin A, the B vitamins, and vitamin D₃. Vitamin E prices jumped up but are likely to soften, sources suggest.

Trace minerals: There are even higher prices across the board for copper, zinc, and manganese compounds, which sources increasingly blame on high energy costs for processing and transport. However, industrial demand for base metal copper continues to grow, up 40% over this time last year.

Blood products: Prices are up. Bovine product remains in very short supply, bringing more porcine product into formulations. However, there’s no large increase in the hogs and pigs inventory either. Some “holiday effect” is at work, too.

P-K-Mg: USDA policy may yet generate more phosphate supply, counteracting the planned shutdown of a major domestic processor and dampening prices affected by tariffs and war in the Middle East. However, for potassium chloride (KCl) higher freight costs are the price accelerant. Sources report more magnesium oxide (MgO) available, which is helping to cap prices.

Urea: Shipments through the Hormuz Strait are softening global urea prices with Q4 pricing down significantly from recent highs. However, quality may be a concern as a lot of product sat in hot, damp ship holds for months.

Distillers: DDGS supplies have caught up with exports. There’s more domestic supply, although new processing techniques — extracting more energy from the product — requires a closer check on nutrient content.

Wheat midds: Prices are up a bit with wheat harvest slower than usual. But recent wet weather raises concerns about mycotoxins, particularly VOM (deoxynivalenol).

Soy hulls: Supply is adequate and prices for loose hulls are steady to lower. Pellets remain premium-priced.

Over the horizon… Oil and nitrogen passage through the Persian Gulf remains variable, dependent on a fragile ceasefire. A more predictable arrangement ahead?

Available: WASDE July Report.

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