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WHEAT: Projected U.S. 2017/18 ending stocks are lowered 25 million bushels due

to in-creased exports. Recent sales to Iraq support a higher export projection with

Hard Red Winter accounting for the entire increase. The latest NASS Flour Millings

Products report, issued November 1, indicated only a modest increase for food use

for 2016/17 and support-ed the current projection of 950 million bushels for 2017/18.

Ending stocks are projected at 935 million bushels, down 246 million from the

previous year but still above the 5-year-av-erage. The season-average farm price is

unchanged at a midpoint of $4.60.

Global 2017/18 wheat supplies are down fractionally with decreased beginning

stocks but increased production. Global production is raised 0.8 million tons led by a

1.0-million-ton increase for Russia and a 0.5-million-ton increase for the EU on

updated harvest results.

Partly offsetting is a 0.5-million-ton decrease for Pakistan. Exports are raised 0.6

million tons with the United States and Russia up 0.7 million, and 0.5 million,

respectively. Austra-lia exports are lowered 0.5 million. Global use is raised

fractionally this month. With sup-plies decreasing and total use increasing, ending

stocks are lowered 0.6 million tons but remain record large.

Raw Material Prices US

EU Wheat Price

Soybean meal, corn and wheat futures

Notes: Futures contracts are priced in USD/short ton (approx. 0.91 metric ton). For the CME Group futures, the date of

expiration of the contract (and therefore the length of the contract) can be deduced via the ticker code in grey in the

middle of the graph. H=March, K=May, N=July, U=September, Z=Dec followed by the year. The futures contracts

displayed here vary in expiration but can range from 1-6 months. Sources: CME Group, Barchart.com

FISHING In 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.

PERU IMARPE considers that the current warming phenomenon is clearly coastal and

regional, calling it THE NIÑO COASTAL.

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

Japanese wholesale prices

Market developments Powders

Producers of SWP are feeling comfortable. If they are offering SWP feed it is at

levels of just above 600 euro. We expect that SWP will not go down further. The gap

between food and feed is huge 710 vs 600 euro. We should closely monitor the

SWP and SMP prices in the USA. If those prices are traded at the same level as EU,

prices in EU will also stay stable. As you can see in the graphs, both commodities

SWP and SMP are also linked. So if SMP is going down or up. SWP is following

more or less the same trend. That is also making it so difficult to predict the SWP

price. SMP is weak and there are huge stocks in EU. We do not expect a further

decrease of SMP, but if for whatever reason SMP is going down further, a lot of

other commodities will have to follow that same trend. We believe that current low

prices will have a positive impact on the demand and also on prices.

Market developments General

In the lasts weeks, the most important news was that Brussels (again) sold 40 Mt of

SMP from intervention at a price of 1390 euro. The signal Brussels is giving is that

they are not willing to disturb the market, but they do want to sell the intervention

volumes. These sales of 40 MT did not have a lot of impact on the market. The

problem we are facing at the moment is that nobody knows which way we are going.

We do not perceive the market developments negatively. International demand is

firm and current low prices will attract more buying interest. EU produced much less

SMP compared to 2016 and they exported much more compared to 2016.At the

moment we notice that SMP prices in EU is higher than in the USA and equal to NZ,

which could make export more difficult. All other dairy commodities that have been

high in price over recent months are coming down. Cheese, Cream and Fat are

much lower and these commodities have a huge impact on the Farmers milk price. If

prices are staying around current levels, milk prices towards the farmers will

decrease in the coming months. How will farmers react? Produce as much as

possible, now prices are still good?

Market developments vegetable Fats

Coconut oil price is around 1550 euro at the moment and we expect that the price

can come down further but not a lot. Demand is still good and supply remains tight.

Maybe levels of 1400 euro can be reached in the com-ing weeks. Palm oil prices are

moving up and down. Recently we had a price of 730 euro and at the moment the

price is at 680 euro again. Import duties / Oil price / export subsidies / production /

consumption and cur-rency exchange rates are all having a huge impact on Palm oil

prices and we can try to predict each one of them, but to do that for all of them is

impossible.

International Milk Prices

Lysine market Tendency: Stable

Most customers are well covered for Q4, market is quite.

Price is around 1.40 – 1,45 usd$/kg.

Methionine Tendency: Stable

December’s demand has covered and no issue on supply.

Price is around 2.90 – 3.15 usd$/kg

Threonine Tendency: stable

The environmental inspection are still happen. But demand are well covered and no

delay shipment. Price is around 1.80-2.00 usd$/kg

Tryptophan Tendency: up .

Producer’s output still limited due to China environmental inspection. Korean

producer is not running full capacity due to several reason such as power shortage,

maintenance, and one-week downtime. Price is around 13.50-15.00 usd$/kg

General info Since BASF declared force majeur on their citral and precursor plant, sky is the limit

for Vit A and Vit E prices. Offering prices for these two items change in daily and

with limited stock availability. Another significant price increase happen in Vit B12

pure as one of the producer has to stop production due to environmental regulation.

Buyers are now start looking for their January needs but still in hand-to-mouth

behaviour. Some traders reported that they need to adjust their old contract to new

price or at least average up in order to get supply from producers. In this situation,

offer validity from traders for Vit A and Vit E is subject to “IF the goods unsold”

and/or subject to “IF they really received the goods, otherwise PO can be

cancelled.”. Nothing is certain. While some B Vitamins have price correction.

Vit A price is strongly up and change day by day. Supply is rare. Some old contracts

are revised following new trend or buyers forced to open new contract with new

prices (average up) to get their pending order delivered. Price is about USD 300-

400.

Vit B1 mono price is stable to down. Supply in winter season is challenging and

producers need to keep within their pollution quota. However demand is not so

strong anymore. Export volume remain stable. Price is around USD 70-75.

Vit B2 price is up. One of Chinese producers are forced to cut down their capacity by

30% and another supplier still have huge backlogs from their Q3 contracts. One

western producer is fully booked in Q1, can only offer for ETA April onwards. Supply

is very tight. Price is around USD 55-60.

Vit B3 (Niacinamide) price is stable. Q4 demand are covered. Price is around USD

7.00.

Calpan price is stable to down. New player is in the market now offering for China

local demand. The volume still not big but it will increase in 2018. Price now is about

USD 75-78.

Vit B6 price is stable to up. The biggest producers running only 70% of their normal

production and others still facing strict environmental regulation. Price is about USD

71-80.

Folic acid price is stable. Even producers produce only half but there are many of

small folic producers in the market. Market divided into two tiers. Big producers want

to increase the price while small producer still keep the old prices. Price is around

USD 40-45.

Vit B12, Price is strongly up. The Environmental Bureau has raised the red flag for

one Chinese producer and forced the company to stop and make the necessary

correction before they are allowed to restart. . Vit B12 pure price is over USD

8000/kg and some mention reached to USD 9000/kg.

Vit C series prices are stable but with increase indication. The main producers in

China will shut down their production line or reduce the output to stay within their

pollution quota during winter season.

Vit D3 500 price is up. There’s fire incident in one of producer factory which cause

market react immediately by doubling the price. Price is around USD 100-120/kg.

Vit E50 price is up. Same story as Vit A. Price is about USD 25-30.

Inositol price is stable. Q4 is covered but producers don’t want to have long contract

to cover whole Q1. Price is about USD 6.20-6.50

Biotin price is up. Producers are reducing production, market is becoming tight.

Biotin pure price is around USD 1000.

Vit K3 MNB price is stable. Producers still expect price to up but demand is not

picking up. Price is not coming down too because the raw material is expensive.

Price is about USD 20-21.

Phosphate. Stable/Up. Due to increased raw material costs (especially sulphur) and

some tightness in supply phosphate fertiliser prices have continued to increase.

Copper. Up. Market is not covered. Copper metal at the LME stay high between

6800-7000 and market remains very bullish. China and the world economy are doing

well and this reflect mostly in extra need of Copper. During winter time some

projects are slow down in China, but no reaction so far on the metal price.

Manganese. Stable. Manganese metal is still priced in the higher range. One big

producer is producing again, but have huge back log orders to be delivered. Maybe

end of Q4 they will be back in the market for fresh quotes.

Zinc Oxide. Firm up. Earlier this month LME zinc prices hit the 10 years record at

USD 3300. However the tightness in China is not expected to be a prolonged affair

due to increase imports from other countries may cover the shortages.

Zinc Sulphate. Up . China producers have difficulties in getting enough raw

materials. Environmental inspection result in closing down some factories. Supply of

Zin Sulfate is very limited and price still increasing. The EU suppliers are not able to

replace all volumes and have tight supply.

Magnesium Oxide. Up. Due to restrictions on the availability of dynamite for mining,

environmental inspections and subsequent plant closures in China, MgO supply has

become tighter this year and prices have risen sharply. It is expected that the tight

supply will continue into Q1/Q2.

Sodium Selenite. Stable at high side. Selenium metal prices remain firm but stable. It

can continue until at least after the Chinese Spring Festival in Feb 2018.

Cobalt. Up. Cobalt metal is still increasing and is expected to remain at high levels in

2018 due to continued inter-est in batteries for Electric vehicles. Some

commentators forecast further increases during the year but, with prices at 5 year

highs this is not certain.

Iodine. Up. Due to crude iodine prices dropping to below cost during Q2-2 2017

there has been a reduction of output and one producer has closed which has caused

prices to increase. Suppliers are quickly passing through these cost increases to

Iodine compounds which mean that Calcium Iodate market will increase too.

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.

For further information please contact Ms. Karren Kim at

karren.kim@trouwnutrition.com

TPT0013/17/TNAP

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