Feed Outlook Market Perspective

Grain Market Report WASDE Market Report

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WHEAT: Projected 2017/18 U.S. wheat ending stocks are raised this month by

30 million bushels to 1,064 million, all on lower feed and residual use. The

NASS Grain Stocks report, issued March 29, implied less feed and residual

usage for the third quarter (December-February) than previously estimated.

This report also showed record U.S. corn stocks on March 1, which are

expected to continue displacing wheat for feed use for the remainder of

2017/18. No other supply or use categories are changed this month. Based on

NASS prices and marketings reported to date along with price expectations for

the rest of 2017/18, the season-average farm price is unchanged at the range

of $4.60 to $4.70 per bushel.

World 2017/18 wheat supplies increased this month by nearly 3.0 million tons

as production is raised to a new record of 759.8 million, mainly on Morocco’s

higher production estimate as it recovered from a severe drought in 2016/17.

Global supplies also increased with a multi-year reduction in Iran’s food, seed,

and industrial use, which raised carry-in stocks by nearly 2.0 million tons.

Raw material prices US

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EU wheat price

Soybean meal, corn and wheat futures

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FISHINGIn Chile North: Fishing ban was lifted on February 01st. Catches started rather

fine, despite there are some areas with under size anchovy. More than 20

ThMT were landed after only 5 days. South of Peru also is fishing well. Let’s

hope catches remain fine to recover better fishing levels this year.

In Chile South: Last week, 9th and XIV Regions (Valdivia area), still were

under sardine and anchovy ban, but it was lifted this week (on February 07th).

Fishing started fine, with good size of fish and good oil yield. In the 8th region

(Concepcion area), sardine ban will last until March 05th. Jack mackerel fishing

remain very poor.

MARKET Chile remain with almost no activity, with very low stock to trade.

PERUIMARPE considers that the current warming phenomenon is clearly coastal and

regional, calling it THE NIÑO COASTAL.

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The fundamental factor is the performance of ANTICYCLON, which in the

second half of January practically collapsed, stopped blowing which brought

invasion of residual tropical waters of the previous Child and is not originated

by any Kelvin wave. The erratic cyclone has been observed for 5 years, so we

have been in the hot stage.

The fundamental difference between a COASTAL NIÑO and a conventional one,

is the duration, while the local phenomenon take weeks the conventional el

NIÑO is for months. The present must last for the duration of the Summer.

Currently anchovy larvae have been found in very good condition, which

suggests that they are resisting this phenomenon. In Pisco, where it has not

been affected artisanal anchovy fishing is very good.

IMARPE, in view of the climatic changes has determined to make a EUREKA

operation with 14 industrial fishing boats from February 20 x 5 days to make a

study of the distribution of anchovy, spawning, temperature and salinity, and

according to that find, they would make a cruise from the 26 of February by 38

days.

In Peru, market remain active this week, increasing volume of pre-sales, for

delivery in May/June, reaching now to over 100 thousand tonnes, against new

quota, which is unknown yet. However rumors say it will be 3 millions tons. If

so, future commitments are now about 15 percent of future productions.

The price of this presale is US$1500-1530/mt CFR China for Super Prime

fishmeal. Although some operations has been recently concluded at levels

slightly below that number with open qualities, with a USD 50/ton gap between

Super and Prime.

The price of fish oil US$1450 and going down. During this week there was

internal sales to DSM for omega, more or less 10.000mt, therefore unsold

stock are close to 50.000mt

TASA sold last week 1000mt in containers at US$1500/mt CFR Chile, that

means US$1.440/mt Fob including freight and the bag.

Fish oil and fishmeal prices

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Tilapia prices

US salmon import price

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International Milk Price

Market developments Powders

SWP availability is tight and prices are relatively high compared to SMP. We

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expect that most dryers are drying SMP and WMP instead of SWP. Probably

producers are selling a lot of liquid whey. In the coming months we normally

will see more milk and more cheese, so also more whey. So we expect stable

or slightly lower SWP feed prices in Q2 and higher prices again in Q3.

The spread between Food and Feed SWP is around 100 euro which is a clear

statement that export is doing well and demand is good. SMP feed is under

pressure, because Brussels is still selling (small volumes) old SMP from

intervention at levels around 1050/1100 euro. We should not forget that this is

old product in 25KG bags and with lower protein. However this sales is having

a negative impact on SMP prices. It is very unlikely that the market will stay

long at current low levels (SMP and SWP), but producers are also not keen on

selling long ahead at current levels.

Market developments General

Global demand is good. Imports to China are again much higher than in the

previous year. For example Jan. 2018 import of SMP up 38 %, WMP up 39%

and SWP also up 37%.We should keep in mind that China is already importing

more than 2.000.000 MT of dairy commodities per year. European SMP is the

cheapest source in the World at the moment which is having a positive impact

on export of SMP. In 2017 the EU exported 200.000 MT more than what they

did in 2016.

There is a lot of uncertainty in the Dairy industry. Although Milk price is still

reasonable good and will probably stay between levels of 30/35 cents. This is

mainly caused by the good Cheese and Butter prices. EU will pass their milk

production peak in May and it is very likely that if market prices are changing it

will happen between May and July. We should not forget that decreasing prices

are mostly going slow and increasing prices very rapidly. Current low prices of

SMP will also have a positive impact on demand.

Market developments vegetable Fats

Palm oil prices are still moving around the 640 euro levels. We expect it will

not go down further. It is very likely that palm oil prices will move up towards

levels of 700 euro in the coming months. From a historical point of view 640

euro is not the lowest price we have seen before, but still a very attractive

price to buy long ahead. Coconut oil price is still decreasing but we expect that

the decrease will stop soon.

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AMINO ACID

Lysine market:

Tendency: stable with uptrend tendency

Some producers increase price due to increase of corn price.

Price is around 1.45 – 1,49 usd$/kg.

Methionine

Tendency: Soften

Weak demand makes producers lowering their prices.

Price is around 2.80 – 2.90 usd$/kg

Threonine:

Tendency: stable

Weak demand and producers are trying to get more orders.

Price is around 1.65-1.75 usd$/kg

Tryptophan:

Tendency: down a bit.

Price started to go down a bit due to weak demand.

Price is around 13.50-14.00 usd$/kg

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General info: Demand is still consider weak but there’s slightly a

positive movement toward Hari Raya, this is the season to stock up for

big demand and long holiday. In term of raw material, DOC supply and

currency; price are high for soy bean meal and start increasing for

corn, DOC still not easy to get and price also high, IDR is still weak

against USD. Price trend for vitamins are still down, while for Minerals

is stable in the high side or some may up due to disruption from supply

side.

Vit A price is down. In end March, BASF has start to produce citral. Vit A1000

is expected to be ready in May. Wide range price is available in the market

USD 200 -250.

Vit B1 mono price is soften. China producers are now supplying actively to

the market after their maintenance period. There’s no shortage for supply.

Price is around USD 66-69.

Vit B2 price is divided to 2 segments due to EFSA finding on the strain

issue from Chinese material. This issue still not final yet, but people are

start to stock up Western material, while Chinese material may shifted to other

region. Price is around USD 55-66.

Vit B3 (Niacinamide) price is soften. Supply is good, and producers are

trying to get more market share. Price is around USD 6.00-6.50

Calpan price is down. Many producers are in the market, they are fighting

for market share by lowering offer price. Xinfa an Xinfu are the biggest Calpan

producers, their price slightly above the other small producers. Price now is

about USD 30-40.

Vit B6 price is stable to soften. Though one big producer is shut down for

maintenance supply is favorable at trader’s stock. Price is about USD 60-65.

Folic acid price is stable to soften. Supply is plenty. Price is around USD

30-34.

Vit B12, Price is down but may be stable as Producers still struggling with

environmental policy. Vit B12 pure price is around USD 5.500-6.000/kg.

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Vit C series prices are soften. Producers will have maintenance shut down,

but supply in the market are still fine. Traders also still want to offload it.

Vit D3 500 price is soften. Chinese producers are hold the offer and Indian

producers increase the price. However, market is weak, not much inquiry

happen. Price is around USD 50-60/kg.

Vit E50 price is down. The downtrend price is not as sharp as couple of

weeks ago. Nevertheless, producers are now fighting with traders to offload the

stocks. This is to anticipate supply from BASF that predicted ready in Q3. Price

is about USD 13-14.

Biotin price is down. Supply of pure biotin is sufficient but demand is weak.

Biotin pure price is around USD 550-650.

Vit K3 MNB price is stable with downward tendency. Price is about USD 19-

20.

Phosphate. Stable. Strikes in Tunisia's phosphate mines has caused 2

months stop production, but now it is over. Though it will take time for the

derivatives pipeline to refill. While in China, there will be new producers in the

market.

Copper: Firm up. The trade war between USA and China have big influence

on the stock and commodity market. Therefore the market is very volatile and

expected to stay on the high level. Cost of mining and processing is increasing.

Supply from Russia and Turkey is tight. Producers running full capacity and

surcharges are increasing. Material offered from LATAM is limited and prices

stay firm

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Magnesium Oxide. Firm up. There will be 1 month shut down production

for factories in Liaoning area due to environment inspection. Moreover there

will be China summit meeting in August thus government do not allowed using

of dynamite to mine. By not using it cost is increase.

Manganous: Stable at high side. Demand on manganese in fertilizer and

electric/battery is good. Feed usage is running good and demand for MnO feed

is high. Inventories are at a very low level.

Zinc Oxide: Stable at high side. Zinc stocks are on a low level. The high

prices activating new mine capacity. These projects will start up during 2018

and will result in more output. New supply and demand destruction due to zinc

substitution will eventually rebalance the market, but that will take some time.

Market stay very volatile and fundamentals are still good.

Sodium Selenite. Up. Selenium metal prices continue to increase linked to

good global growth and strong demand. Selenium derivative prices follow the

metal trend and expected to continue to increase.

Cobalt. Up. Cobalt metal also continues to increase due to global growth and

continued interest from electric vehicles.

Iron Sulphate. Stable.

Disclaimer:

Trouw Nutrition does not warrant or make any representations regarding the

use, validity, accuracy, or reliability of, or the results of the use of, or

otherwise respecting, the information/data in this report.

Trouw Price Trends is an external e-newsletter provided by Trouw Nutrition.

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For further information please contact Ms. Karren Kim at

karren.kim@trouwnutrition.com

TPT0013/17/TNAP

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