Market Intel

Bumper Crops:

Trade Leverage or Legacy?

Imported micro-ingredients remain essential to cost-efficient dairy feeds, even in a strong dairy market. And many dairy producers — especially in the Midwest and Tri-State — are also corn and soybean producers.

Seismic shifts in U.S. trade policy this year herald unprecedented change for both imports and exports. Wondering whether likely big corn and soybean harvests can impact import-export outcomes?

Amino acids: Chinese lysine dumping remains in the European Union’s crosshairs with preliminary rulings supporting a vigorous response later this year. Additional U.S. tariffs remain in the offing, which in addition to lysine would affect tryptophan, threonine, valine, and possibly DL methionine, which saw a run-up last month.

Overall, the AA market remains steady awaiting trade policy developments. One ringer, however: Chinese MHA-Calcium (rumen-protected methionine hydroxy analog) may arrive in U.S. ports as early as September. Low cost soybean meal is keeping a lid on FOB prices, but ocean freight rates remain higher than last year at this time.

Vitamins: Pricing trends are variable across the board, with vitamin A pushing up due to Chinese plant closures, vitamin E weaker, and vitamin D₃ steady.

Trace minerals: The 50% tariff on copper metal is impacting copper sulfate prices, which are significantly higher. Zinc sulfate remains steady. IntelliBond^® (Cu-Mn-Zn hydroxy source) remains on allocation.

Palm & bypass fat products: Palm product prices look higher for Q4 over Q3, even as supplies of calcium salts are on the rise. Indonesia’s 19% U.S. tariff seems solid while Malaysia’s 24% may be open to renegotiation — all of which impacts pricing from the world’s number one and two suppliers.

Soybean meal: There’s plenty of beans out there, so SBM futures are down although the basis remains steady. Likewise for soy bypass protein products.

Canola meal: Despite fewer acres this year and dry weather concerns, canola meal pricing is echoing SBM.

P & K: After ticking up last month, prices for potassium chloride (KCl) are steadier while phosphates are still moving up a bit. Magnesium oxide (MgO) prices are steady, even given tighter supply domestic product versus lower cost Chinese MgO.  

Urea: Prices are bouncing around, oscillating during recent months. Security of shipping through the Straits of Hormuz remains uncertain.

Blood meal: Prices are starting to creep up. Immigration policy relief for meat processors may ease the labor shortage.

Distillers: DDGS prices are trending lower again this month given abundant corn and and soy.

Wheat midds: Prices remain steady and sources report only minor pockets of mycotoxin concern.  

Soy hulls: Prices are variable across the Tri-State — higher in Indiana and steady to lower elsewhere even as some processors remain closed for summer maintenance.

Over the horizon… Bumper crops of corn and soybeans are in the offing, providing extra incentive to finalize trade policy for leading export destinations.