Digital Re-print - March | April 2010

Feature title: Global feed markets - March | April 2010

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 News
COMMODITIES
March - April 2010

GLOBAL Chronos BTH introduces new hygienic bagging system

A
t P o w t e c h 2 01 0 , Chronos BTH is an EHEDG features closed bag-top transport; processing modules are
GRAIN & FEED MARKETS Chronos BTH is
presenting its recently
member and has established an quick and simple cleaning; fast
in-house hygiene task force to change-over times; and minimised
combined to form a
compact integrated unit
Every issue GFMT’s market analyst John Buckley reviews developed hygienic open-mouth devise and implement machine dust emission. • Zone layouts within the
world trading conditions which are impacting the full range bagging system. design guidelines specific for the Furthermore, the bagging machine route cables to
of commodities used in food and feed production. His Food Industry. system is available in full integral control centres at
observations will influence your decision-making. With this new machine design, The EHEDG is a professional stainless-steel versions and the rear of each module
Chronos BTH has responded association with the objective of is an ATEX compliant design. Chronos BTH is a single source
to the growing demand from promoting hygienic conditions Optional nitrogen purging is supplier delivering integrated
the Food Industry for hygienic during the processing and also available. weighing, bagging, palletising and

Supply outlook
and systems. The new packaging of foodstuffs and During bag transportation
crossed for better times ahead (this year’s sown to the all-important US maize crop, about 5% However, notload
machines the securing
all the US cropsystems. Chronos
was so affected by
system concept was developed re co
area is estimated by the International Grains m me nd
of ing
which g uid
was e line
still s
lying bag-top
under snow remains
as we closed
went and the
the weather or by storage of damp grain so2010,
BTH is exhibiting at Powtech this
Despite the in accordance
Council to be uptobythe EHEDG
1.1%). for hygienic
Consumption machine
on to press design
but this control area
is not expected to addis up separated from
to is not, at this Nuremberg,
stage, expected Germany (Aprilto27-29,
to amount a big
(European Hygienic Engineering according to national and the functional bagging zone: 2010)
the other hand, is not growing much and there more than 2m or 3m tonnes, in the context of a hole in the US ending stock figure, let alone in Hall 9, booth number 326.a
stalemate between

remains encouraging
& nothing
is Design on Group) guidelines.
the horizon international
yet to suggest a big record legislation.
334m tonne The • more
crop. The Thereimportant
are no fasteners,
reason to push up forward prices. What it may
rebound in world wheat import trade – which issue may be the extent to which the lower bolts
equipment now is being refined for example or Misore
do, however, InforMatIon:
to drive more importers into
buyers and sellers for crops
fell quite sharply last season due to better the enhanced
quality specifications
we mentioned in our last screws in the product
issue reduces Chronos
the arms of other BTH GmbH
exporting countries if these
in the Mid-East/North Africa. All this required
suggests by feedthevalueBaby Food
to compounders flow
in the USzones
and its big are able to supply Ina Wronkowitz
better quality than the USA,
since late last year, wheat prices will stay flat through 2010,packaging
even if sector.
markets in Asia. Low test weights,• Allvomitoxin
materialand contact parts Brazil
including Marketing Assistant
and Argentina. Fortunately, the
Reisertstr 21

A
the futures markets are promising premiums The new other
dust-proof,
issuespatented
may well lower the are‘usable’
sanitary cropweldedSouth Americans (see below) are getting bigger
53773 Hennef, Germany
EU prices have been gainst the early indications, the next month or two onward. The important into the new crop, late-year positions. bottom-upand/or fillingrequire
technology
more volume • ofThe grainmachine
to be fed exterior has
than expected crops
Tel: +49this
2242year and are already
93350
the past season has been Mid-east/North African importing region has also The coarse grain price outlookguaranteesis also high accuracies
to livestock to during a polished
get the normal results finish keen sellers atFax:
in animal competitive
+49 2242 prices of maize as
9335186
edging down and one of relative plenty and had timely, abundant rains while a probable record the
favourable for consumers. Markets continue filling process.
weight The
gain machine
(the same •
applies I
to n d i
corn v i d u a l
ethanol, m a c
theyh i n e
enter their main
Email: harvest period.
wroi@premiertech.com
generally declining costs of crop is on the way in India, now expected to re-join to brace for a possible late downward revision starch, sweetener and other industrial uses too). A little further forward, markets are trying
there is talk of more grain and feed raw materials but the the list of net exporters after a two-year absence.
focus is now turning more toward new On balance then, wheat yield prospects look good
price declines on crop supply prospects. So far these look and the crop should be large again. In fact, with the

the way in coming

fairly promising for consumers.
Although low prices have cut many of the key
exporters’ winter wheat sowings, the overall area
big carryover stocks, total supply should be even
bigger than last season’s, offering the prospect of
yet more surplus stock buildup by the end of the
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36 | march - april 2010 Grain &feed millinG technoloGy Grain &feed millinG technoloGy march- -april
march april2010
2010| 37
|9

to work out how much maize the US will sow
this year. Some preliminary data from the US
Department of Agriculture in the past month
suggests acreage will be higher than last year’s
but that yields are unlikely to repeat the peak
levels seen then. Two months away from the
main sowing period, some analysts are also
getting concerned about record snowfall taking
a long time to melt and threatening to keep
fields too soggy to work and plant in some of
the corn-producing heartlands. The US National
Weather Service is also talking of a possibly
damper than usual spring – for the third year
running. Yet again the risk arises that the world’s
largest maize supplier may have trouble getting
its crops in on time and in meeting the forecast
acreage. Doubtless this will, at some stage, get
the speculators excited (if it actually transpires).
However, after two years that started under
often dire ‘washout’ conditions for planting –
which didn’t prevent bumper yields and record
crops - the commercial trade will probably not
over-react to this.
38 | march - april 2010
Interestingly, the US – the world’s largest
grain supplier - by far, is not making full use of
the extra land it could sow this year. USDA sees
planted area of 247.3m acres for the eight major
field crops versus last year’s 248.9m and 2008’s
253.1m. This is despite a further 2.5m acres
being released from conservation programmes.
With about 6m less winter wheat acres, there is
a lot of spare land that could be planted to maize,
soya, spring wheat or the other coarse grains.
Lower than expected prices and
higher costs – it seems – are
having an effect in restraining
US sowing intentions. However,
the real picture will not emerge
until planting time, when market
prices offered by competing
crops and, of course, the
weather, will have the final
say. Either way, US yields have
tended to increase over the long
term and that underlying trend
– along with the efficiency of
the new GM varieties of maize
and soyabeans and the old adage
‘rain makes grain’ may help to
deliver adequate US crops again
in 2010.
Whereas maize supplies
are adequate and wheat
burdensome, soyabeans may
be verging on a glut situation
ahead. Soya has been a tale
of two markets. Last year’s
record US crop is disappearing
fast – largely thanks to record
demand from China. However,
the full weight of massive South
American harvests is about to
hit the world market soon and
there is little doubt that a lot
of this will have to go to stocks
rather than consumption. This
in turn will drive up world total
oilseed stocks.
US soya prices have held up
quite well over the winter amid the seasonal
increase in demand for animal feed and the
large Chinese purchases. However, as export
demand switches to South America now, we
can probably expect more downward price
pressure on Chicago futures and on cash
markets for US and South American meal.
Where the more valuable, higher protein soya
market goes, the other oilmeals like rape and
sunflower will have to follow.
As at the start of 2010, there seems very
little for the speculators to get their teeth into
– certainly in the short/medium term. This will
COMMODITIES
not stop the banks and institutional investors on 2008’s 26.7m). Table 1: Wheat production outlook
talking up grains and other commodities as long Good yields last 2009/10 2010/11
term investments. There is also the chance that year still produced Exporters
tension over Iran could boost crude oil prices a decent crop of
EU 138.7 143.4/144
(already up this month). That could reignite the 138.7m tonnes
corn ethanol sector where many pundits are (151.2m) which, Russia 61.7 57/58
already claiming that new US renewable fuel amid flat domestic USA 60.3 54/55
guidelines promise more growth in demand demand and falling Canada 26.5 24/25
than expected earlier. Time will tell. But in the exports will leave Australia 21.7 22/23
meantime, speculators, having been bitten by the EU with a large
Ukraine 20.9 19
last year’s commodity price crash, might not be stock of at least 17m
Kazakhstan 16 14
quite so ready to rush into another boom that attention turn to prospects for 2010/11 tonnes to carry into
could again turn out to be a bubble. Certainly season’s supplies. So far the pointers are the new season. The IGC’s preliminary forecast Argentina 8 12
economic indicators are hardly bullish. Despite encouraging with the IGC predicting sown is for a 143.4m tonne EU crop this summer.
stronger GDP growth in the US, China and area just 0.8% below last season’s at 221.8mn This trend is backed by the French analysts Key others
India, the broad financial markets remain hectares – enough to produce a crop close to Strategie Grains which forecast the soft wheat China 114 109
paranoid about a ‘double dip’ recession amid 660m tonnes with normal weather. Last year’s component at 134.7m tonnes – about 5m more India 80.6 80/82.0
the problems of Euro-zone sovereign debt – output was estimated by the IGC at 675m than produced last year. These estimates may Pakistan 24 23
indeed US debt too. A slow economy may not and by USDA at 677m and that was plenty even under-rate the crop in the light of bigger
N Africa 20.1 17.4
be good news for meat producers that depend big enough, driving stocks up to almost 200m sowing increases estimated recently by some
Near East 37 37.5
on healthy consumer spending power but it tonnes – their highest level in several years. EU member states, including Spain, Germany,
may at least hamper speculators’ attempts to Ideas that EU farmers might respond the UK and parts of east Europe.
double grain and feed prices - as they helped to disappointing wheat prices with lower Despite the stalemate between buyers and Early 2010 world crop pointers provided
to do in 2007/08. plantings have been laid to rest by recent sellers since late last year, EU prices have been by the IGC and others are shown in the table
estimates showing the reverse trend. The IGC edging down and there is talk of more price below. The USA might do a little better than
Commodity highlights - is forecasting total European wheat area at declines on the way in coming months as new forecast if it sows more spring wheat area
26m hectares against last year’s 25.7m (if down crop prospects start to firm up. to compensate for very low winter wheat
Agritech 90x132.ai 3/14/2010 11:28:26 AM
Wheat supplies loosen further,
prices choppy
WORLD wheat prices have swung both
ways in the past month or two, buffeted by
Agritech South Africa
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wheat supplies and the heavy competition
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For more info contact the Organiser:
under pressure from large export supplies The Biennial Conference organised by -:
The Flour Millers’ Council of Australia
Affairs KZN Commerce & Industry
from all the major suppliers and are likely to The Stock Feed Manufacturers’ Council of Australia, and
The Australian Technical Millers’ Association
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remain an anchor on wheat prices overall for Email: conference@flourmillers.com.au
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the months ahead. Fax: 61 3 9819 1477
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As the first grain harvested in the northern Email: winnie@alfajer.net
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Grain &feed millinG technoloGy Grain &feed millinG technoloGy march - april 2010 | 39
 Naturally ahead

plantings after delays to corn harvest made it

too late to sow some wheat crop on the same
land. Spring wheat prices are trading at good
premiums for the higher qualities but whether
this is enough incentive to raise area remains
That will all change over coming years as it
develops port infrastructure directed at the
big Asian markets including some of the those
viewed by the US, Australia and Canada as
some of their safest customers like Japan, the
that was still lying under snow as we went to
press (though what has been harvested recently 8 - 10 July 2010
has seen some surprisingly high yields) and partly Jakarta Convention Center
because of ongoing problems with quality from
a damp 2009 harvest. As mentioned in our last Indonesia

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Australia’s forecast crop increase for next in recent seasons

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year also relies on weather continuing to how these ‘Black
improve after a few years of drought were Sea’ exporters can Naturally ahead in phytogenics!
broken in 2009. So far this is appears to be consistently set a

FISHERIES INDUSTRY SHOW

happening. Most countries are getting normal
to good weather apart from Canada and China
whichare both suffering a degree of drought
that needs to be watched. India – the first
major country to harvest wheat in the calendar
year – meanwhile appears to be outperforming
early forecasts and plans to enter the world
market as a significant exporter of at least
2.5m tonnes.
Russian export expansion should
keep prices in check
grueling pace for
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While crops in the former Soviet countries
were reduced last year by lower yields in Russia
and smaller planted area in the Ukraine (partly
offset by more sown in Kazakhstan), this region
still produced a huge crop for the second year
running, at 113.7m tonnes, only 2m less than the
record 2008 out-turn. End-season stocks are
likely to continue building up within this region
at 23m tonnes by July compared with 18.5m
last season and just 12.3m the year before.
Although consumption in the FSU countries
is edging up all the time, this still leaves a big
surplus for exports which these countries likely
to exploit to the full.
Wheat trade from the region is led by Russia,
forecast to export 18m tonnes this season –
just shy of its 2008/09 record 18.4m and more
than double what it used to ship in earlier years.
Russia would probably be exporting even more
this season, were it not for internal transport
and port logistical restrictions. However, it
means to tackle these in a big way over the
next few years, pumping millions of roubles into
export infrastructure to raise its globile profile.
Russia, like Ukraine and Kazakhstan, has
already shown itself a force to be reckoned
within the traditionally contested markets of
the Near East and North Africa where it enjoys
freight cost advantages over most of its rivals
from its ability to ship through the Black Sea
and out past Turkey into the Mediterranean.
However, it has not, until recently, set its
storage and less wastage. Russia also believes it
can become a major exporter, not just of feed
grade and soft milling wheats but of harder
quality varieties. Clearly this will be a factor
to watch in the future as it may help keep long
term wheat prices down for heavily export-
dependent markets, including the EU.
Maize shrugs off speculative
pressures
Many of the banks and investment houses
have continued to make a case for longer
term strength in the maize/corn market
as consumption
outpaces
production and
stocks and stock/
use ratios get
ever tighter. The
past season has
supported this as
world total demand
for the grain has run
about 35m tonnes
up on the year,
exceeding the 2009/10 crop by about 12m
tonnes (after this grew by only 6m tonnes).
World stocks at the close of the season will
fall by like amount but will still be higher than
in the six seasons prior to 2008/09.
Maize prices have recently been better
supported than wheat, partly because of
If this is as widespread as some maintain, this
could reduce the effective size of the usable
crop, leading to lower than expected US stocks
at the end of the season on August 31.
Ethanol demand for maize had a boost from active ingredients
new US government guidelines on renewable
energy which appear to strengthen the green
fuel’s longer term demand outlook, although
the effect may be softened over time by the
greater inclusion in ethanol feedstocks of
other raw materials including plant waste. US
ethanol production is also running at higher
than expected levels and ahead of government
targets, which may also reduce US end-season
stocks by more than expected.
Looking to 2010/11, US ethanol use will
clearly continue to rise while feed demand
for corn might expect some increments as www.indofisheries.org
the worst of the economic recession passes
in the USA and among some of its global Supported by Media Partner Organised by PT. Napindo Media Ashatama
Jl. Kelapa Sawit XIV Blok M1 No. 10
maize customers. So will US supply keep up? P
A R
T E
M
E
Kompleks Billy & Moon
DE

sights on the bigger markets further afield. uncertainties about the 5% of the 2009 US crop At this stage, the next US crop is wide open Pondok Kelapa, Jakarta, 13450
A NN
P E

A s i a P a c i f i c
Indonesia
R

IN
I

R
D U S T

Ministry of Directorate General of Ministry of Ministry of Trade Indonesian Exhibition

Telp. +6221 8650962, 8644756/85
Marine Affairs Livestock Services,
Ministry of Agriculture
Industry Companies Association Fax. +6221 8650963
and Fisheries
For more information, please
Email: visit:
info@indofisheries.org

40 | march - april 2010 Grain &feed millinG technoloGy info@biomin.net www.pep.biomin.net


to ‘guesstimates’ but some early pointers
from the USDA and from the trade suggest
another 2m to 4m acres could be added to
the production base, provided the weather
is normal at planting time. Given a favourable
growing season too, output could expand
to a new record level and just about keep
up with the projected higher demand. At
this stage, however, there is some concern
about the crop going late again with record
snowfall yet to melt in large swathes of the
Midwest and a long-range forecast for a wet
spring. On the one hand the US might seem
very unlucky if it had a planting washout/
holdup for an unprecedented third year in a
row. Yet these events did not prevent large,
if late crops at the end of the season – even
a record crop for 2009, so maybe this factor
is being over-rated by bullish interests.
On the world market maize prices have
been kept in check by quite heavy export
competition for the US at keen prices from
Latin America and occasionally, eastern
Europe and some Asian sources. Crops
in Brazil and Argentina both seem to be
turning out several million tonnes bigger than
expected so we can probably expect the
world total production figure for 2009/10 to
rise soon, perhaps resulting in some loosening
in those ending stock figures. The pressure
has been telling on the US where export
sales and shipments are actually running far
behind officially forecast levels, also pointing
to looser ending stocks.
The IGC’s preliminary estimate for world
maize plantings in 2010/11 is +1.4% at 154.5m
ha (152.3m.) with increases outside the US
as well, in the FSU and S America. However,
EU area could drop slightly to about 8.4m.
ha. (8.5m.) due to low prices, cuts in France
and Italy. This suggests EU supply will remain
in relatively tighter balance as the last crop
dipped by 7m tonnes to 55.8m whereas
consumption fell only 4m to 60m (due to
lower feed use). Seasonal ending stocks, as
42 | march - april 2010
COMMODITIES
a result, are expected to more than halve
from last year’s 6m to their lowest level for
several years.
Overall, growing demand and perhaps
limited scope for world crop expansion
might see maize prices better supported as
2010 wears on but the key factor will be US
weather over the next six months.
The IGC meanwhile expects world barley
area to decline by 1.2% to 55.4m ha, with
falls in the EU and FSU. The EU itself may
see a substantial drop of 7%, to 12.9m ha,
as farmers switch to wheat and rapeseed,
especially from winter plantings in France and
Germany. The cold winter in Europe is also
likely to delay spring barley sowing, leading
to some switching to alternative crops or
even to set-aside.
Russia’s winter barley area also declined
in favour of wheat but more winter barley
was sown in
Ukraine where the total including spring
barley is forecast around 5.2m ha (5.1m.).
In Canada, a small decline in spring barley
plantings is likely to be more than offset by
less crop abandonment than last year with
harvested area seen at 3m ha (2.9m).
Soya boosts oilmeal supply
Soya meal is by far the world’s leading
oilseed protein fed to livestock, accounting for
over two thirds of consumption in this sector
and nearly five times as much as its closest
rival, rapeseed meal. Even in Europe, where
the choice of alternative oilseed meals is
greater from domestic or imported rapeseed
and sunflower meals, soya, with its higher
protein and other attributes, grabs a hefty
60% market share of all
oilmeals consumed. Where
soya prices go, the broader
oilmeal market, then, has
to follow. It’s therefore
good news for consumers
in Europe and overseas that
in recent weeks the price
of soya has been coming
down amid a massive influx
of new crop supplies. The
US 2009 crop turned out
bigger than expected at 91.5mm tonnes, a
new record high and up by almost 11m from
last year. The Latin American harvests have
meanwhile exceeded even the most optimistic
forecasts, currently promising a combined
gain of at least 34m tonnes, possibly as much
as 40m. In world terms, the bigger 2009/10
soyabean crop is equal to at least 35m tonnes
of extra oilseed meal, maybe as much as 40m,
although not all will be crushed this season,
some sold for human food use, quite a bit
stored up for the subsequent season. USDA
is currently forecasting a mere 10m tonne rise
in the crush to cover the anticipated increase
in global demand but clearly a lot more beans
VIV Europe 2010
can and will be processed for the feed sector
if the demand is there. On the US markets,
soya meal prices have already dropped by
20% since 2010 started and, despite the firm
dollar/weak euro situation, this trend has
been reflected across the EU market too.
Now that the Brazilian and Argentine crops
are being harvested, the pressure is starting
to increase for lower prices still.
Soya is not the only oilmeal in abundant
supply this season. World and European
rapeseed production is also running at
20 - 22 April
record levels and carryover stocks of this
oilseed will also be high at the close of this
season. These increases have far outweighed
the gradual erosion of alternative oilseed
supplies, like cottonseeds and groundnuts
in the world mix, pointing to a comfortable
stock cushion all round as we move into latter 2 inspiring information platforms centred
2010. The big question in coming months,
around innovation will be hosted:
however, is whether the supplying countries
can keep this up. At this stage, USDA is
suggesting a possible slowdown in US soya Eggs! Meat Safety
crop expansion but many analysts think that
current price ratios versus maize will see an
even bigger crop sown for 2010. What the
South Americans might sow next autumn is
down to where prices go in the meantime but
if the historical trend continues, one might
Register now
expect soya’s higher income for farmers to
keep the acreage rising there too. Europe and
for free entrance
Canada are meanwhile forecast to sow large
rapeseed crops again.
Demand for oilmeals, on the other hand,
at www.viv.net
is only seen rising this season by about 8m or
9m tonnes. As usual, the largest increase is in
China (+3.3m) followed by Europe (+1.2m).
Apart from India (+0.6m), the rest of the
forecast increase is spread over a whole host
of large and smaller consuming countries on
the assumption that world feed demand will
respond to some gradual GDP growth and
See the latest. Know the latest. Select Utrecht in 2010
pickups in per capita meat consumption as
global recession eases. Clearly there is more The place-to-be to find the most inspiring innovations in future
than enough oilmeal to go round and, short
of some major weather problem in the US farming in 2010. VIV Europe is the meeting place for international
or Europe this summer, no reasons on the
radar for prices to rise. top decision makers in the animal protein industry.
Grain &feed millinG technoloGy
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