Hammersmith Trade Services A division of Hammersmith Marketing Ltd.

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1 Corporate Head Office: Suite 200B, Centre of Commerce, One Bay Street, PO Box N3944, Nassau, Bahamas. Tel WWW: hammersmithltd.blogspot.com SKYPE: bacon39a Representative Office: Mobile: Fax: Quartier La Galine, D99, Mas Martin, St Remy de Provence, France SECTION 1: US FEED GRAINS VEGETABLE AND ANIMAL PROTEIN Blowing my own horn a bit this week and mentioning that I have been elected to the Council of the Grain and Feed Trade Association (GAFTA). The Council has 22 members representing all areas of the world. GAFTA has over 1500 members in 86 countries. Now, back to the grain business, it was another weak for lower prices for most everything. Corn prices were down by USD 6 or 7 m/t, soybeans down by USD 3 to 4 m/t, soymeal was actually about the same price level on the week and most wheat prices were down by about USD 10 m/t. The US Dollar continues to race higher in value which makes US commodities more expensive in world markets which then tends to push export commodity prices down a little. The US futures market has been hit hard by commodity funds selling off their long positions in order to avoid losses, which is not at all an unexpected happenstance. And then, as mentioned last week, farmers are selling more grain in order to avoid their stocks on hand selling for even lower prices. As we all know, when everyone decides to sell it just pushes prices lower. There was some comment in the US trade press that corn prices tend to move higher from February on but with world crops at record high levels that may not happen this year. There is lots of competition in the world market for corn exports with buyers just moving to the lowest priced market, as situations change. There was also the comment on the Black Sea that the Ukraine may ship more corn in the next few months since the government and exporters have agree on wheat export levels with less wheat moving out the farmers may be more inclined to sell their corn into the export market in order to fully finance spring crops. Soybeans had a tough few days as rains in South America seemed to hit all those areas that needed rain and estimates of the huge soybean crop just grow and grow and grow, so there seems to be little reason at present to expect higher soybean prices. It is interesting to see that soybeans and soymeal have tremendous demand but still can t move higher as the expected crops are just too large for even record demand. The USDA will be issuing some preliminary planting estimates at the Agricultural Outlook Forum on February 1920 and this may just shake up the market a little. Other than that and the weather in Brazil and Argentina there is not too much exciting happening with grain and oilseed prices. Estimated Bulk Grain freight in USD per m/t, basis heavy grains According to trade reports the Baltic Index this week is at its lowest level in just under 30 years and the Index has dropped by 95% from the record level that was set back in The overall Baltic Dry index is down by close to 60% since November According to some reports the drop is due to a fall in demand from China, lower oil prices and falling currency values. The largest drop in freight values is in the very largest Capesize vessels but all vessel sizes are experiencing at least some drop in freight rates except perhaps small coaster size vessels which have always set their own price trends. Page 1 of 6

2 US Gulf to Europe: 60/70,000 (10,000 disch) $13/14.00 Down $1.00 x US Gulf to Spain: 30,000 m/t(5,000 disch) $23/24.00 Down $2.00 x US Gulf Israel: 50,000 MT $27/28.00 Down $2.00 x US Gulf to Egypt: Panamax(6,000 disch) $26/27.00 Down $2.00 x US Gulf Turkey: 50,000 $28/29.00 Down $2.00 x US Gulf Morocco: 25,000(3,000 disch) $28/29.00 Down $2.00 x US Gulf Nigeria: 30,000 m/t $49/50.00 Down $2.00 x US Gulf other Med: 25,000 MT(3,000 disch) $28/29.00 Down $2.00 x US Gulf South Africa: 30,000 m/t $38/39.00 Steady X US Gulf Yemen 35/ $48/49.00 Steady x US Gulf Japan: Panamax $30/31.00 Down $6.00 x US Gulf China: Panamax $28/29.00 Down $5.00 x US PNW Japan: Panamax $20/21.00 Down $4.00 x US East Coast Egypt: Panamax $40/41.00 Down $1.00 x US East Coast Nigeria: Handisize $51/52.00 down $1.00 x France/Germany to Algeria: 30,000 m/t(3,000 disch) $24/25.00 Steady x France/Germany to Egypt: 50,000 m/t(10,000 disch) $25/26.00 Steady x France/Germany to Jordan: 35/45,000 m/t(4,000 disch) $30/31.00 Steady x France/Germany to Morocco: 30,000 m/t(3,000 disch) $25/26.00 Steady x France/Germany to Saudi Arabia: 50/60,000 $38/39.00 Steady x France/Germany to South Africa: 30,000 m/t $35/36.00 Steady x France/Germany to Yemen: 30,000 m/t $45/46.00 Steady x Argentina to Algeria: 25/30,000 m/t(3,000 disch) $28/29.00 Down $1.00 x Argentina to China: 50,000 m/t, with topoff $30/31.00 Steady x Argentina to Japan: 50,000 m/t $33/34.00 Steady x Argentina to Egypt: 50,000 m/t(10,000 disch) $23/24.00 Down $2.00 x Argentina to Europe: 50/60,000 m/t $24/25.00 Down $2.00 x Argentina to Morocco: 25,000 m/t(3,000 disch) $26/27.00 Down $2.00 x Argentina to Saudi Arabia $41.00 Steady x Argentina to South Africa 30,000 m/t(3,000 disch) $29/30.00 Steady x Argentina to Spain: 30,000 m/t $28/29.00 Down $2.00 x Argentina to Tunisia: 30,000 m/t $30/31.00 Down $1.00 x Brazil to Algeria: 25,000 m/t $25/26.00 Steady x Brazil to China: 55,000 m/t $23/24.00 Down $2.00 X Brazil to Japan: 55,000 m/t $25/26.00 Down $1.00 x Brazil to Europe $22/23.00 Down $3.00 x Brazil to Morocco: 30,000 m/t $24/25.00 Steady x Brazil to Saudi Arabia $41/42.00 Steady x Brazil to Turkey/Egypt: 50,000 m/t $18/19.00 Down $2.00 x Black Sea to China $28/29.00 Down $1.00 x Black Sea to East Med: 30,000 m/t(3,000 disch) $15/16.00 Steady x Black Sea to East Med: coaster $38/39.00 Steady x Black Sea to Egypt: 40/50,000 m/t (6,000 disch) $14/15.00 Steady x Black Sea to Egypt: coaster 3,000 m/t $43/44.00 Steady x Black Sea to Morocco: 30,000 m/t(3,000 disch) $21/22.00 Steady x Black Sea to Spain: 40/50,000 m/t $19/20.00 Steady x Black Sea to Saudi Arabia Jeddah 50k $25/26.00 steady x Page 2 of 6

3 Black Sea to Tunisia/Algeria: 30,000(5,000 disch) $20/21.00 Steady x Baltic Dry Index 608 Down 112 x Baltic Capesize Index 679 down 208 X Baltic Panamax Index 508 Down 177 X Baltic Supramax Index 585 Down 65 X Baltic Handisize Index 340 Down 40 x Bunkerworld fuel index 703 Down 1 x FOB port or location specified. Prices in US$, in metric tons: All shipments in bulk grain vessels unless stated otherwise (NOLA is New Orleans, Louisiana, USA.) ALL PRICES ARE FOR FEB 2015/APRIL 2015 UNLESS STATED OTHER WISE Wheat, USA Soft Red Winter, NOLA USD 234>>230 x Wheat, USA Hard Red Winter 12 protein USD 248/250 x Wheat, Ukraine 11.5 pro, 30,000+ m/t USD 248/252 x Wheat, Russia 12.5 pro, 30,000+ m/t USD 257/262 x Wheat, Romania USD 245/249 x Wheat, soft milling #1, France, Rouen USD 214/217 x Wheat, soft milling #2, France, Rouen USD 207/210 x Wheat, milling, Argentina, upriver USD 244/250 x Wheat, feed, Black Sea USD 210/215 x Wheat Bran, Black Sea USD 165/170 x Barley, France, Rouen port USD 207/210 x Barley, feed, Argentina, upriver USD 215>>200 x Barley, feed, Black Sea, 30,000+ USD 210/215 x Barley, feed, USA Pacific Northwest USD 260/265 x Corn, FOB NOLA USA USD 178>>174 x Corn, FOB USA Pacific northwest USD 189/192 x Corn, FOB Argentina port, upriver USD 180/185 x Corn, FOB Brazil port USD 176/180 x Corn, FOB Black Sea, 30,000+ m/t USD 170/175 x Corn, FOB France USD 168/172 x Corn, FOB Romania USD 173/178 x Sorghum, FOB Texas USD 254/257 x Sorghum, FOB Argentina port USD 195/200 x Soymeal, 48 protein, FOB NOLA USD 475/495 X Soymeal, 48 protein, USA, Rotterdam USD 540/550 X Soymeal, Argentina, Rotterdam USD 460>>445 X Soymeal, 47 pro, FOB Argentina USD 425/435 X Soymeal, 48 protein, Brazil, Rotterdam USD 450>>439 x Soymeal, FOB Brazil USD 400/415 X Soymeal, 48 protein, India FOB USD 640/645 x Soybeans, FOB NOLA USD 400/411 X Page 3 of 6

4 Soybeans, Argentina, FOB USD 372>>364 X Soybeans, Brazil, FOB USD 395>>385 X Soybeans, Rotterdam USD 423>>415 X Soybeans, Black Sea USD 400/405 x Corn Gluten Meal, USA FOB NOLA USD 780/790 m/t x Corn Gluten Feed, USA FOB NOLA USD 175/180 m/t x DDGS corn, 35 profat, USA FOB NOLA USD 270>>260 m/t x DDGS corn, 35 profat, USA CNF Asia USD 320>>310 m/t x There seems to be quite a wide range of export prices for DDGS with sources talking about prices USD 10 m/t below and above the average price shown above. The US Grains Council report this week was saying that much of the FOB port price variability has been due to changes in freight logistics in the US as Mississippi barge prices and domestic rail prices seem to be competing for the same business the DDGS seem to flow to where the domestic freight costs are the lowest. There was an interesting note about container freight from the West Coast of the USA in the trade press this week. It said that due to very, very long container loading delays on the West Coast, container vessels are having to be repositioned from the East Coast of the USA, which is making eastern container shipments of DDGS and CGM much more difficult and more expensive. It seems that in the USA there are just not enough container vessels to go around especially with so many being delayed on the west coast. Corn Gluten Meal export demand remains very good with one shipper this week quoting CGM to Egypt in bulk containers above the USD 880 m/t range..of course, at that price level, few in Egypt can afford bulk CGM in containers. However, CGM is still much cheaper than fishmeal. Container shipments, minimum 200 m/t Argentina Meat & Bone meal, 45 protein USD 470/490 m/t CNF Asia Argentina poultry meal, 57/60 protein USD 650/670 m/t CNF Asia Paraguay Meat &Bone meal, 45 protein USD 430/440 m/t CNF Asia European MBM 45 protein USD 385/405 m/t CNF Asia European MBM 50 protein USD 425/450 m/t CNF Asia European Feathermeal, 75 protein USD 780/800 m/t CNF Asia European poultry meal, pet food USD 1050/10700 m/t CNF Asia Australian MBM 45 protein Australian MBM 50 protein Australian Feathermeal, 80 protein Australian Poultry Meal, pet food USA Meat & Bone meal, 50 protein USA Feathermeal, 80 protein USA Poultry Meal, feed grade USA Poultry Meal, pet food grade USD 560/570 m/t CNF Asia USD 610/620 m/t CNF Asia USD 760/780 m/t CNF Asia USD 1040/1070 m/t CNF Asia USD 590/600 m/t CNF Asia USD 630/650 m/t CNF Asia USD 600/620 m/t CNF Asia USD 1020/1050 m/t CNF Asia Very wide range in price Meat and bone meal export prices were a little softer this week from most origins as demand in Asia has slipped a bit due to the upcoming Chinese New Year holidays that will affect a number of importing countries. Also, the drop in soybean prices tended to make animal proteins a little less attractive to buyers. There was very little actual new business reported this week and not even much in the way of buyer s inquiries as the export market seems to have gone very quiet. Of course the Page 4 of 6

5 problems with US poultry meal and feathermeal continue, so both those markets are down on actual sales and on export prices. USA domestic animal protein prices were lower on the week much of which was due to the weakness in soybeans and the expected lower soymeal prices. Most trade reports this week say that the animal protein market will probably have lower export prices for the next few weeks, as export demand is forecasted to stay weak. The following indications are at producer s factory, exworks in bulk Meat and bone meal, USA, 50 protein USD 430/440 m/t Feathermeal 80 protein USA USD 480/500 m/t Poultry meal 57 protein, Eastern USA USD 480/500 m/t Poultry meal, Pet Food grade, 64 pro USD 670/690 m/t SECTION 2 FISHMEAL COMMENTS AND PRICES: PERUVIAN Ah, the fishmeal business is so quiet in Peru as we all just wait to see what happens with the Southern Peru Region fishing quota. The official report on the southern situation should be out by no later than midfebruary. While the quota is never all that large, it will just be nice for some fishermen to get back to work and for buyers to see a little new stock fishmeal. These days the talk in Peru seems to be about what will happen to fishmeal prices once the major fishing season is announced again for April/May. We all know that prices will have to slip lower but how much lower is the question of the week. There was one comment in the trade that about USD 200 m/t lower will be a place to start but that prices could move as much as USD 300 to 400 m/t lower, especially for the higher grades which are currently at a USD 400 m/t premium. China is about to go off for Chinese New Year holidays, so not too much exciting expected from there in the next couple of weeks but we will see what they decide to do about fishmeal when they get back from holidays. We are all looking forward to seeing exactly what China will decide to do about the next Peru fishing season. Will Chinese buyer dive in and buy up the expected stocks or will they hang about and wait until producers need to book some new business and are getting very price flexible. We just have to wait and see. According to MSI Ceres report this week there is very little fishmeal business being done from any origin as all the major buyer are out of the market for now. No one, especially the Chinese, wants to pay the current high prices and most regular buyers seem to have good stocks on hand. I guess things will stay pretty quiet into April. European fishmeal prices FOB North German port. Type Protein % Price per m/t USD Herring fishmeal 72 protein 1,990 Danish fishmeal 64 protein 1,700 Peru fishmeal 64 protein 2,020 Chile fishmeal 65 protein 2,170 Iceland fishmeal 70 protein 2,080 Page 5 of 6

6 PERU INDICATION FISHMEAL PRICES: ALL PRICES SHOWN ARE IN CONTAINER, ON VESSEL, AT ORIGIN US DOLLARS Minimum shipment of 200 m/t for fishmeal Specification Price per m/t FOB vessel Peru port Price per m/t Chile port 65 protein 1930/1950 m/t 65/66 protein 2050/2070 m/t 67 protein standard steam 2090/2110 m/t 67 protein SD 150 TVN 2210/2230 m/t 2100/ protein SD 120 TVN 2300/2320 m/t 2200/ protein SD 1000 hist, 120 TVN 2330/2350 m/t 2320/ protein SD 500 hist, 120 TVN 2350/2380 m/t 2370/2390 Fish oil, crude bulk 2500/ /2000 Fish oil, crude drums 2600/2650 Fish oil, flexi tank 2550/2600 Fish oil, Omega 3: 28%EPA/DHA 2900/3000 INFORMATION: gtee = guarantee, TVN = total volatile nitrogen, hist = histamine, FAQ = fair average quality (normally flame or hot air dried), SD = steam dried The information contained herein is based on sources that we believe to be reliable, but we do not represent that it is accurate or complete. Nothing contained herein should be considered as an offer to sell or a solicitation of an offer to buy. All references to prices are subject to change without notice. Any opinions expressed herein are solely those of the author. As such, they may differ in material respects from those of, or expressed or published by or on behalf of, Hammersmith Marketing Ltd or its officers, directors, employees or affiliates Copyright 2015 Wayne S. Bacon Page 6 of 6