Market Intel
Longshoremen Back to Work:
Effect of Strike on Key Ingredients?
A four-day strike that closed container ports on the East and Gulf Coasts ended Thursday last week but left queues of nearly 60 ships waiting to unload. The headlines pointed to holiday retail goods stranded at sea, but many of those ships also were carrying feed ingredients such as palm products, vitamins, and amino acids.
Palm products and calcium salts may be most affected by the strike, which would exacerbate already very tight supplies. Shipping out of Indonesia and Malaysia continues to be a major challenge. Yet, there’s more product able to pass through the Panama Canal with increased water levels following near record low levels this spring. Nonetheless, palm containers are backlogged in sea lanes off the Gulf ports.
Vitamins A, E, and D3 prices shot up in recent months, causing some suppliers to consider allocating their shrinking inventories, according to Market Intel sources. The container port backlog is likely going to help sustain higher vitamin pricing.
Amino acids are generally in good supply with stable prices — including for lysine, tryptophan, and threonine — and so probably less affected by the shipping backlog. The premium for U.S. product also helps to buffer pricing of imports. Today, however, methionine prices may be somewhat more variable, despite large and growing domestic manufacture, including Evonik’s Alabama operations.
Soybean meal: SBM board prices are climbing slowly with the basis steady to slightly higher as processors continue to move old crop product. New crop beans are coming in now so the basis is moving, too.
Canola meal: Prices are coming down as Canadian producers finally begin unloading their bins to take advantage of strengthening SBM prices. Soy protein products prices are up slightly from last month — both board and basis values.
Wheat midds: Despite plentiful supply, wheat midds prices jumped in mid-September on higher demand, which Market Intel sources suspect is only temporary. In a month or two, midds are likely to be significantly cheaper.
Blood meal: Prices are coming down and likely to erode through October with porcine product again below ruminant based on higher pig slaughter rates.
Distillers: There’s good news for DDGS from new crop corn as vomitoxin (DON) levels appear to be much lower than last year. Currently, roughly 25% of output is new crop sourced, which should be closer to 50-50 later this month.
Soy hulls: Soy hulls are steady to higher in price with processors getting a lot sold. Expect softening prices ahead, Market Intel sources suggest.Â
Urea: Higher prices for urea mainly reflect higher ocean freight charges, with the brief East and Gulf Coast port strike less of a factor. Look for higher prices ahead as FOB prices at Mid East sources are up significantly.
Trace minerals: Copper sulfate prices are back on the rise, with Chinese economic stimulus policy having an effect. Zinc sulfate prices are tagging along, slightly higher. Nonetheless, current supplies are adequate.
Just over the horizon… With the Fed’s rate cut now in the rear view and consumer spending (and debt) still high, ag and other business folks are trying to anticipate outcomes and knock-on effects of close national, state, and local elections and referendums now only weeks away.
Coming soon: October WASDE Report.
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