Market Intel
Purchasing Contracts:
Fine Print at Bottom Gets Big at Top
Last year at this time, imported ingredient purchasing contracts included the “tariff caveat” in fine print at the bottom, legalese to remind the buyer about the vagaries of international trade.
These days, you cannot miss the bold WARNING! at the top — this price can change.
Amino acids: Still quiet markets overall — with prices steady to slightly lower — awaiting China-focused trade policy decisions. Not just in the U.S. — the European Union may reach an anti-dumping ruling on lysine later this week. Sources report some stockpiling, but plentiful soybean meal is keeping a lid on demand. Stable lower prices persist for tryptophan, threonine, and valine. Suppliers are trying to push up prices on DL methionine, given stronger demand and supply allocation of hydroxy analog and liquid product.
Vitamins: Prices remain steady to lower for most vitamins, too, reflecting the wait-and-see suspense of current global trade policy. While current prices for vitamins A and E are lower, vitamin D3 prices fluctuate in a narrower range. Complicating the Q3 outlook are numerous scheduled vitamin (and amino acid) plant shutdowns in China and ocean freight rates that remain 10-20% higher than a year ago but may begin to soften.
Trace minerals: Going into Q3, prices for copper sulfate are lower and zinc sulfate remains steady. However, IntelliBond® (Cu-Mn-Zn hydroxy source) is on allocation.
Palm & bypass fat products: Most palm product prices are steady to slightly lower going into Q3. But a large Malaysian processor is off-line and calcium salts are in tight supply. There’s opportunity for more palm in blends.
Soybean meal: Basis prices for SBM are steady, but the board is down significantly. Renewable fuels legislation is in the offing, which also affects distillers. Basis price for old crop soy bypass protein products continues strong while new crop basis is weaker.
Canola meal: Likewise for old crop product, with new crop basis price currently weaker. But there are fewer Canadian acres planted this year and worries about dry weather this summer.
P & K: Prices are ticking up, with feed-grade suppliers of phosphates trying to match fertilizer pricing. Potassium chloride (KCl) remains steady but magnesium oxide (MgO) is up a bit, with tight supply of quality domestic product. Chinese MgO remains in good supply.
Urea: Prices are up again, now with possible battle damage to Iranian natural gas wells and the risk of shipping through the Straits of Hormuz.
Blood meal: Prices are steady to slightly higher, partly due to higher summer consumer demand but also less labor in processing plants. Ag-related immigration policy relief may ease the labor shortage.
Distillers: DDGS prices are trending lower, thanks largely to cheap soy and corn as well as renewable fuel policy.
Wheat midds: Prices are steady, looking ahead to summer harvest, although wet weather may raise mycotoxin concerns. Â
Soy hulls: Prices remain steady to weaker with supplies building given new crop to come.Â
Over the horizon… Unilateral trade deals and trial balloons are pushing ingredient markets in unexpected directions, making tariff caveats critical.