January 29, 2007

 

ASA weekly: Soy sector to benefit from Bush's renewable fuels plan; Grain export inspection ahead of last year; Brazil's concerns about farm impact on Amazon

 

 

In his State of the Union address last week, US President George W Bush announced his administration's energy plan that includes a new alternative fuels standard, which contains a requirement for sources produced by American farmers and ranchers as well as an automatic "safety valve" to protect against unforeseen increases in the prices of alternative fuels or their feedstocks.

 

With biofuels coming to the forefront, American agriculture faces the greatest opportunity of a generation to lead a future in which the US gets its energy by the bushel and not by the barrel, pointed out USDA secretarty-general Mike Johanns.

 

American Soybean Association chairman Bob Metz said Bush's energy plan will "benefit soybean growers by creating long-term demand for biodiesel made from soybean oil".

 

ASA also points out that the USDA analysis indicates every 50 million gallons of biodiesel raises soybean prices by 1 percent. At the current level of 300 million gallons, biodiesel demand is already adding about 30 cents per bushel, ASA says.

 

Meanwhile, according to the NOPA report released last week, the December soybean crush declined seasonally from November on daily crush rate.

 

NOPA's soybean oil stocks for the end of December were 39,900 tonnes below the previous month.

 

A decline in stocks during December is unusual but exports appear to have been 136,000 tonnes, the largest monthly exports in nearly four years. Soybean oil stocks, nevertheless, remain large at nearly 1.36 million tonnes and should build in the coming months.

 

The NOPA oil yield rebounded seasonally in December. The NOPA oil yield of 11.30 pounds per bushel is thought to equate to a Census oil yield of 11.25 pounds. As such, the 2006-07 oil yield has been increased by 0.04 pounds per bushel to 11.33 pounds.

 

Since Sept 1, total grain and soybean export inspections have been 9.1 percent ahead of last year's pace. For the week ended Jan 12, exports totaled 2.16 million tonnes, compared to 1.85 million tonnes for the same week last year.

 

Freight price have been relatively flat owing to lower fuel costs, slightly slower movements by truck, and seasonal patterns.

 

Barge rates were 15 percent higher from the previous December. However, barge freight rates are volatile and will remain high through the year. A shrinking fleet of covered barges, strong corn exports through the Center Gulf, and fairly decent north-bound fertiliser and steel opportunities are supporting rates into the spring. Any navigation interruption associated with flooding, icing etc would likely push rates higher.

 

Brazil worries about farm impact on Amazon
 

Brazil's Census Bureau (IBGE) published a new map outlining where the agricultural frontiers are encroaching on the Amazon.

 

According to Dow Jones newswires, the satellite imagery map is based on data as recent as 2003. Amazon rainforest deforestation began with extensive cattle ranching and soy farming between 1970 and the 1990s, with soybeans moving into the area in the 1990s, IBGE said.

 

The Amazon region consists of the Amazon River Basin, the largest in the world, formed by some 15,500 miles of navigable rivers in more than 2.7 square miles of land. Some 20.3 million people live in the region, most of them in the extreme south of the Amazon river basin, in regions known as the cerrado, or savannah. 

 

US & South America Soybean/Products Balance

	United States			Argentina			Brazil
	Actual	Estimate	Proj.	Actual	Estimate	Proj.	Actual	Estimate	Proj.
	2004/05	2005-06	2006/07	2004/05	2005/06	2006/07	2004/05	2005/06	2006-07
Soybeans	thousand tonnes
Carryin	3,059	6,960	12,214	2,434	514	379	3,400	1,440	640
Production	85,013	83,368	87,196	39,000	40,500	41,300	53,000	55,000	56,000
Imports	152	92	109	708	900	950	353	86	100
Crush	46,160	47,320	48,444	29,560	32,600	33,700	29,730	28,000	27,300
Exports	30,011	25,778	31,161	10,548	7,400	7,000	22,798	25,550	26,700
Other	5,093	5,108	4,531	1,520	1,535	1,536	2,785	2,336	2,024
Usage	81,264	78,206	84,136	41,628	41,535	42,236	55,313	55,886	56,024
Carryout	6,960	12,214	15,383	514	379	393	1,440	640	716
Soymeal	thousand tonnes
Carryin	191	156	290	1,350	1,187	2,165	870	640	856
Production	36,936	37,413	38,478	23,347	26,101	26,548	22,928	21,874	21,435
Domestic use	30,446	30,194	30,935	537	573	602	9,162	9,556	9,511
Net Exports	6,525	7,085	7,561	22,973	24,550	25,800	13,996	12,102	12,220
Usage	36,971	37,279	38,496	23,510	25,123	26,402	23,158	21,658	21,731
Carryout	156	290	272	1,187	2,165	2,311	640	856	560
Soybean oil	thousand tonnes
Carryin	488	771	1,346	660	542	712	293	248	450
Production	8,781	9,250	9,124	5,404	6,228	6,397	5,708	5,352	5,233
Domestic use	7,910	8,169	8,709	408	433	563	3,059	3,168	3,205
Net exports	588	506	542	5,114	5,625	5,950	2,694	1,982	2,180
Usage	8,498	8,675	9,251	5,522	6,058	6,513	5,753	5,150	5,385
Carryout	771	1,346	1,219	542	712	596	248	450	298

 

USDA Export Sales (tmt) - Week of 18 January 2007

		New	Accum.				New	Accum.
Country	Commodity	Sales	Exports		Country	Commodity	Sales	Exports
Belgium	Soybeans	56.1	210.8		Indonesia	Soymeal	0.9	20.6
China	Soybeans	260.2	6219.1		Japan	Soymeal	25.8	124.5
Colombia	Soybeans	3.9	138.6		Korea, Rep.	Soymeal	0.5	58.2
Costa Rica	Soybeans	4.9	109.4		Panama	Soymeal	4	46.3
Indonesia	Soybeans	73.8	540.6		Philippines	Soymeal	3.2	131.5
Japan	Soybeans	57.2	1139.1		Vietnam	Soymeal	2	0
Mexico	Soybeans	89.2	1444.8		Canada	Soyoil	0.4	8.5
Morocco	Soybeans	54	139.6		Guatemala	Soyoil	1.6	11.3
Netherlands	Soybeans	4.2	827.5		Jamaica	Soyoil	3.3	5.2
Taiwan	Soybeans	12	816.3
Thailand	Soybeans	64.5	463.8		Export Sales Totals (tmt)
Colombia	Soymeal	3.8	98.6			Outstanding	Accum.	New
Cuba	Soymeal	0.9	32.7		Commodity	Sales	Exports	Sales
Dom. Rep.	Soymeal	18	113.1		Soybeans	7,124.40	15,096.20	615.6
FW IND	Soymeal	1.8	7.5		Soymeal	1,879.40	1,993.10	34.3
Hong Kong	Soymeal	0.7	9.4		Soyoil	69	246	2.2