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Two Big Factors in the International Animal Fat Market

Posted on Mar 17, 2017 in U.S. and International Animal Fats & Protein

There are two big factors in the International Animal fat market.  The first is the demand for fats and oils into Singapore.  Currently, with the palm oil prices moving lower there has been less demand and the sellers are seeing less “tire kicking” for other fats/oils into Singapore, both showing lower bids and trading prices.   Secondly, the new US administration has given no credible hints on what they will do with the Renewable Fuels Standards which is leaving a lot of uncertainty in the market place.  With many of the sellers, especially North American fat sellers, have one eye on Singapore and one eye on the US Government.  With “The Donald” at the USA helm, it is anyone’s guess what will happen with the RFS standards.  Which is about all I can say on this issue which will continue to have the industry scratching their heads.  Enough about that topic.

Another thing that hit me like a big pizza of pie was a statement from a source stating Argentina over the last 45 days has shipped tallow 10% Max acid to the EU for use in biofuels.  I have to admit I don’t know about the price nor if this is typical type business that I just discovered.  If you can enlighten me please do so at billyd@thejacobsen.com.

In the US tallow prices are mostly unchanged, with a good volume of cash trading at $650 pmt for 4% BFT with a small volume trading $11 higher.  Otherwise, the US buyers have been booking good volumes of tallow on “formula” contracts which are flat priced when the car is shipped based on an agreed upon formula. Export prices though have seen some weaker prices across the board.

US distillers corn oil production is still very good and moving into the biodiesel operations.  There was a report that DCO in Europe was down 10 Euros this week.

There is a definite weakening of tallow and fat prices in AUS, while in NZ prices are mostly steady but from what I can tell they would be biddable.

Palm stearin prices are down to $690 FOB Malaysia this week a $12.50 pmt decline from a week ago.  As Ryan mentioned a week ago, there is probably further decline coming in palm stearin as we head into April-May.

European animal fat prices are unchanged to Euros 10/14 lower.

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U.S. Export Sales & Shipments for Week Ending March 9

Posted on Mar 17, 2017 in Hide & Leather

USDA Hides and Skins Report

Net sales of 309,400 pieces reported for 2017, all whole cattle hides, were down 30% from the previous week and 22% from the prior four-week average. Increases were primarily for China (187,900 pieces, including decreases of 19,100 pieces), South Korea (74,900 pieces, including decreases of 2,200 pieces), Mexico (24,100 pieces, including decreases of 1,700 pieces), Thailand (7,300 pieces, including decreases of 400 pieces), and Italy (4,600 pieces). Reductions were reported for Japan (1,000 pieces) and India (100 pieces). Exports of 426,000 pieces reported for 2017, were up 10% from the previous week and 19% from the prior four-week average. Whole cattle hide exports of 423,300 pieces were primarily to China (276,500 pieces), South Korea (85,100 pieces), Mexico (22,800 pieces), Thailand (13,700 pieces), and Taiwan (7,000 pieces).

Net sales of 263,400 wet blues for 2017, were up noticeably from the previous week and from the prior four-week average. Increases were reported for China (66,400 unsplit and 24,600 grain splits), Italy (79,700 unsplit and 2,800 grain splits), and Vietnam (53,100 unsplit). Reductions were reported for Brazil (5,700 unsplit) and Vietnam (200 grain splits). Exports of 152,000 wet blues for 2017 were up noticeably from the previous week and up 36% from the prior four-week average. The primary destinations China (45,700 unsplit and 7,200 grain splits), Vietnam (26,600 unsplit and 9,300 grain splits)and Italy (19,600 unsplit and 11,700 grain splits). Net sales of splits totaling 73,200 pounds for 2017 were down 86% from the previous week and 87% from the prior four-week average. Increases were reported for China (86,800 pounds). Reductions were reported for Vietnam (13,600 pounds). Exports of 353,300 pounds were down 28% from the previous week and 18% from the previous four-week average. The destinations were Vietnam (213,400 pounds), China (123,900 pounds), and South Korea (16,000 pounds).

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Quiet Week of Trading

Posted on Mar 17, 2017 in U.S. and International Animal Fats & Protein

So far it has been a relatively quiet week throughout the trade as some traders are in Thailand for the POV meeting.  There will be good demand coming for all proteins going into Indonesia as the feed compounders fatten up their pipelines ahead of Ramadan which begins May 26 and continues for a month.

MBM prices into Indo range from $490 to $510 CnF for material out of the EU and SAM.  While material out of North America is offered more in the $520 to $540 CnF Indo range.  In the US there is a very wide range in the FOB origin ruminant MBM prices from $286 to $320 pmt.  There are indications that some of the ruminant MBM in the US could fetch $340 FOB Origin for export material.  Certainly this may actually be the cause for the wide range in the US quoted markets.  Without export, I would guess the US ruminant MBM price to be on the lower end of the range.  Competing proteins are plentiful with Distillers Dried Grains still very abundant and well-priced for domestic and export market usage.

US feather meal is a funny market.  By that I mean prices are mostly steady, but word on the street is that material is trading well under the quoted prices.  It certainly isn’t going to blenders as it is said the blended proteins moving into the US poultry industry is slow.  The market price into Indo has seen some decline as seen in the price guide.

One thing coming out of the meeting in Thailand is the apparent growing demand for Pet Food Grade Poultry by Meal as one source who sells US animal proteins indicated everyone by their booth wanted a price on PFGPBM.  Current US prices FOB Origin range from $690 to $770 pmt.


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2017 Biomass Based Diesel Production Edges Higher in Feb

Posted on Mar 17, 2017 in Biodiesel, Vegetable Oil, and Grain

February EMTS production, as reported by the EPA, began to slowly move higher during the year’s second month.  At 138.9 million D4 gallons, production was up 10.42% from January’s 125.8 million and 3.8% more than the 133.8 million gallons produced in February of 2016.

D4 Production, which combines biodiesel and renewable diesel production, showed biodiesel production to be ramping up, while renewable diesel production slowed. Biodiesel production increased by 24% to 108.2 million gallons and renewable diesel production dipped 21% to 30.7 million gallons. Despite the upswing in biodiesel production and the downswing in renewable diesel output, biodiesel output over the first two months of the year is 11% less than what was seen in 2016 while renewable diesel output is 77% more. An interesting trend, should it continue.

The EPA revised January’s production totals higher, adding 62,699 RINs and 41,798 gallons to the D4 total. During February, domestic production accounted for 153.1 million RINs, importers contributed 44.7 million, and foreign generation was 16.8 million. Domestic production increased by 23.2 million RINs month over month, importers were 12.9 million RINs higher, and foreign production decreased by 17.9 million RINs.






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