Market Intel
Canola Mustang
Runs with Fire Horse
Slashing tariffs on canola imports is key to a “new world order” trade deal struck by Canada and China last month. China already is Canada’s second-largest trading partner after the U.S. Canola futures rose, impacting soy markets.
So begins the Year of the Fire Horse in China, running now with a Canadian canola mustang.
Soybean meal: Facing a “canola conundrum” and the most recent USDA updates, SBM basis turned steady to weaker. Reports pointed to China likely to fulfill its commitment to purchase 12 MMT of U.S. soybeans by the end of February, which represents a 50% drop in U.S. exports from previous marketing years. Brazil and Argentina have filled the demand.
Meanwhile, basis for branded soy protein products has steadied following the recent jump up.
Palm & bypass fat products: Palm products remain in good supply with near-quarter quotes steady, Market Intel sources report. Malaysian production is down somewhat but not affecting nearby pricing. Indonesia’s national biodiesel pilot project roll-out is not yet impacting supplies or prices. Sources expect low milk prices to continue to limit demand for both palm and calcium salt products.
Amino acids: For lysine from China, the new range of countervailing duties (39.5% to just under 80.4%) is generating a lot of questions. At this writing, details are not yet public knowledge, although product arriving at U.S. ports would be affected. Another unknown factor is details about the application of the European Union’s countervailing duties decision and the final anti-dumping ruling.
Otherwise, there are good supplies of tryptophan, threonine, and valine, which are at or near the bottom of a pricing cycle, according to Market Intel sources. DL methionine supplies remain tight and prices steady in Q1, although the spring shutdown of a major U.S. plant is in the offing.
Vitamins: Given continuing good supply, prices for most vitamins are weaker, with vitamin A and vitamin D3 close to their historical bottoms. However, vitamin E pricing is somewhat stronger. Vitamin-mineral combos and premixes are down overall. Mid-month Chinese New Year manufacturing slow-downs may affect supplies going into Q2, not just for vitamins but trace minerals too.
Trace minerals: Prices for copper sulfate and tribasic copper chloride (TBCC) are steadier but remain high, given ongoing industrial copper demand. However, TBCC today is more economical than historically. Zinc sulfate prices are steady to softer despite the approach of fertilizer season. Likewise for manganese compounds.
Blood products: Seasonal spikes are less spiky than in years past and current prices are only steady to slightly higher. Market Intel sources are wondering about the BBQ season ahead. Meanwhile, the market is factoring in ongoing low cost SBM and lower milk prices.
P & K: Prices for phosphates are up only slightly despite the looming fertilizer season. Both potassium chloride (KCl) and magnesium oxide (MgO) remain steady.
Urea: Global prices showed greater spreads with new uncertainty for supplies out of the Middle East amid geopolitical tensions. There’s no imminent spike, Market Intel sources suggest, with supplies on hand for spring.
Distillers: DDGS prices are moving up slowly given the impetus of exports and less supply from distilleries. At the same time, there’s less brewer’s grains in the market. What had been local concern about VOM contamination in Indiana DDGS now appears to be a concern across the Tri-State.
Wheat midds: Midds prices spiked in December but weakened in January. Quality looks good, Market Intel sources say, and new processing is coming on-line.
Soy hulls: Supplies are tighter in the eastern Tri-State, but prices are not weakening. Yet, anyway, sources say.
Over the horizon… The Chinese Year of the Fire Horse is upon us. By one account, it’s characterized by “intense energy, passion, and rapid transformation, fostering bold action, innovation, and leadership.”