Market Intel

New Deals:

Ingredient Import Cost Relief?

Following the face-to-face meeting of President Donald Trump and Chinese President Xi Jinping last week in Korea, the U.S. looks forward to renewed soybean shipments to China — 12 million metric tons this year and at least 25 million tons annually for the next three years. But, as one reporter puts it: “Headline risk still moves the soy markets.”

Also, the two sides are relaxing tariff rates and agreeing to pause October’s tit-for-tat port fees, which directly affect the cost of feed micro ingredients coming in from China.

Still, the proof of new trade deals and cost relief is dollars, which are yet to be saved.

Soybean meal: Basis prices remain steady with the board somewhat higher. Sources note that traders already had priced in expected positive news for the resumption of U.S. soybean exports to China. Market Intel cautions that the actual shipment of beans is likely to impact pricing.

Canola meal: Basis is significantly lower, but canola meal is still following SBM on the board.

Amino acids: AA are showing mixed pricing with lysine currently steady to lower but likely to move with soy exports. There’s also anticipation of action on the European Union’s anti-dumping rulings against China. Meanwhile, tryptophan, threonine, and valine prices are lower. DL methionine prices are “steady as ever,” sources report, with hydroxy analog prices high and supplies still tight going into Q1. 

Vitamins: Vitamin A prices are low and “probably near bottom” sources say. Vitamin D and B prices remain steady while vitamin E is softening with good supply. Uncertainties cloud Q1 given possible effects of Chinese New Year production adjustments.

Trace minerals: Prices for copper sulfate are flat with currently adequate inventories while copper chloride remains volatile, now with a major Indonesian mine temporarily shut down. Zinc sulfate prices are steady along with branded Cu-Mn-Zn hydroxy products.

Palm & bypass fat products: Higher ocean freight rates may encourage higher prices for palm oil and palm co-products going into Q1. Meanwhile, recent U.S. trade talks in Malaysia may set the stage for more investment in production.

P & K: Prices for potassium chloride (KCl) and phosphates should be moving higher, sources say, but it’s not happening yet. Magnesium oxide (MgO) prices are holding steady, so far.

Urea: Prices are going up unpredictably, but probably certainly going into Q1, Market Intel sources expect.

Blood meal: Traditionally, prices start to rise going into a major holiday — like Thanksgiving — but this year is definitely not traditional. Sources now expect a “mild pop” in prices by the end of November.

Distillers: DDGS prices are steady in the Tri-State but there’s growing concern about mycotoxin contamination (VOM due to variable harvest, especially in southern Indiana). Low cost SBM makes distillers less attractive, even with low corn cost.

Wheat midds: Prices are higher and steady. Mycotoxins are not an issue.

Soy hulls: There’s more availability now and purchasing, even with the current higher price. But Market Intel sources do not expect this balance to persist in coming weeks. 

Over the horizon… The current federal government shutdown constrains animal health data reporting so new reports of avian flu in Indiana commercial ducks has both poultry and dairy producers on the look out.

For World Agricultural Supply and Demand Estimates, check back Nov. 10: WASDE Report.

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