January 7, 2008

 

ASA weekly: US Soy market opens 2008 with new contract highs

 

Soy futures gained almost 20 cents in the front months while July contract surpassed 1973's record.

 

Soymeal and soy oil futures clinched new contract highs, although soyoil was slightly weaker due to lower petroleum markets.

 

The soy market appears to be in uptrend and is projected to continue its rise, unless corn gives up more acreage for corn production.

 

South American crops are being moderated by high prices. January soy futures increased US6.89, finishing at US459.84. March gained US$6.89, closing at US379.30 and May was up US7.35, ending at US$471.97.

 

January soymeal was up to US$6.72 closing at US$379.30, March was US$7.16 higher, finishing at US$386.47, and May closed up US$7.16 ending at US$390.77.

 

Soyoil for January increased US$11.90 closing at US$1113.32, March was up US$8.38, finishing at US$1128.31, and May was US$8.60 higher, closing at US$1140.66.

 

 

Japan to up soy imports due to low stocks and high prices

 

Japan's federal government will embark on a soy-buying spree prompted by low short supply in grains, feed and soy and soaring prices in the domestic market, according to the Yomiuru Shimbun newspaper.

 

With the lowest food self-sufficiency rates of the industrial world at 40 percent, Japan only produces a quarter of the soy needed to meet domestic demand. It makes only 13 percent of the wheat it consumes and imports all feed.

 

This month, a council for future food strategy, headed by Prime Minister Yasuo Fukuda will start discussions and the report will be compiled on March, which will then be acted on by the Ministry of Agriculture, Forestry and Fisheries.

 

The plan is geared to augment stocks, which will last three months ¨C including private inventory. Currently wheat reserves are adequate for two to three months, including state storage of 1.8 months, one month for soy and two months for livestock feed.

 

US should free up acreage for grain to curb commodity costs, analysts

 

US industry observers point to the use of Conservation Reserve Program (CRP) as some acres could increase the land pool for what is considered a fierce acreage competition in 2008.

 

This, according to some industry observers, could help the US government manage the rising commodity prices.

 

However, acting USDA Secretary Chuck Conner has made it clear that it would take some major news to alter the current position of not offering some CRP participants to bolt contracts without penalty.

 

One government official noted that the penalty is not all that great, especially when one looks at current commodity prices and land rental rates versus CRP payments, and the current move to multiple-year rental rate agreements.

 

Another way to address the high rising food prices, according to observers, is for top administration officials to start asking questions about farm and food policy without completely relying on USDA.

 

U.S. & South America Soybean/Products Balance
	United States			Argentina			Brazil
	Actual	Estimate	Proj.	Actual	Estimate	Proj.	Actual	Estimate	Proj.
	2005/06	2006/07	2007/08	2005/06	2006/07	2007/08	2005/06	2006/07	2007/08
Soybeans	thousand tonnes
Carryin	6,960	12,229	15,589	174	334	2,814	1,638	2,252	2,578
Production	83,368	86,770	70,605	40,500	47,200	47,000	57,000	59,000	62,000
Imports	92	246	163	1,013	2,100	2,100	40	60	100
Crush	47,324	49,160	49,669	32,748	35,600	38,750	28,756	30,000	29,400
Exports	25,579	30,428	26,535	7,130	9,700	10,300	24,770	25,800	30,400
Other	5,288	4,068	4,447	1,475	1,520	1,620	2,900	2,934	2,950
Usage	78,191	83,656	80,651	41,353	46,820	50,670	56,426	58,734	62,750
Carryout	12,229	15,589	5,706	334	2,814	1,244	2,252	2,578	1,928
Soymeal	thousand tonnes
Carryin	156	285	319	1,686	1,996	1,696	640	794	754
Production	37,416	39,028	39,357	25,582	27,718	30,425	22,300	23,160	22,755
Domestic use	30,114	31,106	32,024	574	618	645	10,073	10,700	11,220
Net Exports	7,173	7,888	7,380	24,698	27,400	29,764	12,073	12,500	11,620
Usage	37,287	38,994	39,404	25,272	28,018	30,409	22,146	23,200	22,840
Carryout	285	319	272	1,996	1,696	1,712	794	754	669
Soybean oil	thousand tonnes
Carryin	771	1,366	1,321	385	484	519	248	300	286
Production	9,248	9,291	9,396	6,169	6,810	7,400	5,521	5,760	5,641
Domestic use	8,146	8,492	9,117	405	465	750	3,172	3,390	3,500
Net exports	507	844	685	5,665	6,310	6,670	2,297	2,384	2,192
Usage	8,653	9,336	9,802	6,070	6,775	7,420	5,469	5,774	5,692
Carryout	1,366	1,321	915	484	519	499	300	286	235

 

USDA Export Sales (tmt) - Week of 27 December 2007
Country	Commodity	New Sales	Accum. Exports		Country	Commodity	New Sales	Accum. Exports
Belgium	Soybeans	1.20	177.20		Canada	Soymeal	6.90	324.50
China	Soybeans	8.70	5524.80		Indonesia	Soymeal	0.60	29.60
Egypt	Soybeans	72.70	274.10		Japan	Soymeal	42.50	58.40
France	Soybeans	2.40	25.40		Mexico	Soymeal	2.20	262.10
Indonesia	Soybeans	1.40	388.50		Nicaragua	Soymeal	0.60	13.70
Israel	Soybeans	1.50	145.50		Philippines	Soymeal	1.00	215.40
Japan	Soybeans	16.10	927.70		Colombia	Soyoil	3.50	6.50
Mexico	Soybeans	49.60	1067.40		Mexico	Soyoil	2.70	46.70
Portugal	Soybeans	71.50	204.40
Saudi Arabia	Soybeans	19.40	19.40		Export Sales Totals (tmt)
Syria	Soybeans	1.20	131.00		Commodity	Outstanding Sales	Accum. Exports	New Sales
Taiwan	Soybeans	7.60	608.10		Soybeans	9,040.60	11,788.60	140.50
Thailand	Soybeans	2.30	142.90		Soymeal	1,872.90	1,738.80	49.10
Vietnam	Soybeans	0.90	21.10		Soyoil	173.40	209.20	5.70