Market Intel
“Perfect Storm” Pricing Conditions?
Which at the close of 2024 may describe the combined impact on feed ingredient pricing in early 2025 due to:
- Threat of January dock strike — longshoremen holding out in order to restrict port automation, potentially disrupting supplies of containerized imports
- South American weather conditions — soybean planting currently ahead of schedule, but with dry weather risk
- Changes ahead in biofuel mandates — including more palm oil use with increased palm blending and higher Indonesia export tariffs
- Midwest rainfall — more needed to move barges carrying urea, KCl, MgO, etc. before rivers freeze
Soybean meal: Three new crush plants are adding supply, helping to lower basis going into Q1. Large Brazil and Argentina soy planting is underway, yet longer range South American weather forecasts are now less confident of timely rains. Soy products basis remains steady with the board lower.
Canola meal: Much Canadian supply remains in producer bins although country elevators are emptying out and processors continue to have good supplies. Market Intel sources forecast stronger Q1 prices due to poor margins.Â
Amino acids: Market Intel sources report imported lysine and threonine “hard to find in something like a ‘perfect storm’ with higher prices to come.” Domestic product is selling strongly at premium prices. Meanwhile, DL methionine prices are steady with good supply and tryptophan prices currently stopped from slipping.
Vitamins: Vitamin E prices are lower with greater availability. Prices for vitamins A and D3 are stable to stronger in advance of perennial supply issues anticipated during Chinese New Year.
Trace minerals: Now off the “extreme allocation” list, calcium chloride remains in tight supply. Copper sulfate and zinc sulfate prices continue to hold steady under persistent industrial demand pressure.Â
P & K: Biophos supplies are rebuilding following this year’s hurricane flooding in Florida, so prices are steadier. Potassium chloride (KCl) and magnesium oxide (MgO) prices remain stable but may rise if river conditions slow delivery.Â
Wheat midds: “Surpising demand,” according to Market Intel sources, is keeping prices steady to higher. Sources look for a “post-holiday slide” in prices.
Blood meal: Now entering the holiday season, prices are bouncing up and likely to remain strong til the end of the year.
Distillers: DDGS prices are still rising given strong demand for low-vomitoxin (DON) product for domestic use, including in the Tri-State area.
Soy hulls: The tight supply continues to support higher prices. Tri-State dairy producers in particular are not yet reducing their demand. But is there a price-demand tipping point ahead soon?
Urea: Prices remain steady for now but river conditions may be problematic enough to strengthen the market.
Palm products: “No spot bags, even,” says one Market Intel source, commenting on the extreme supply constraints affecting exports from major palm oil producing countries — Indonesia and Malaysia — where biofuel blending mandates and rising export tariffs impact global trade in products coming from the world’s cheapest-to-produce vegetable oil. Calcium salts, however, remain abundant with steady prices.
Over the horizon… Last month the Chinese-funded $3.5 billion Chancay port opened north of Lima, Peru, reportedly able to handle container ships of more than 18,000 TEU (twenty-foot equivalent units) and spurring completion of a Brazil-Peru rail corridor to bypass the Panama Canal.