February 19, 2008

 

ASA weekly: US soy complex higher, unhindered by slow exports and NOPA crush report

 
Heavy speculative buying propelled the soy market even higher, despite low export sales and NOPA crush reports released February 14.
 

Soy oil remains leader on the product side as China said 40 percent of its rapeseed crop was damaged by adverse winter weather.

 

Malaysian palm oil futures and US soy oil futures shoot up to record levels as soy oil prices further disconnect themselves from petroleum prices.

 

Although US soy oil stocks are rising, observers said there is the threat of export demand which could draw those stocks down despite dwindling biodiesel production. March futures closed up US$14.51, finishing at US$502.65; May gained US$14.15, closing at US$509.08; and July was up US$14.15, ending at US$512.48.

 

March soymeal increased US$8.38 closing at US$396.17; May was US$8.49 higher, finishing at US$402.34; and July soymeal closed up US$8.38 ending at US$404.76.

 

March soy oil increased US$41.89 to finish at US$1282.20; May was up US$41.23, closing at US$1297.63; and July was US$41.23 higher, closing at US$1309.31.

  

USDA releases 10-year baseline with November's supply and demand as starting point

 

The report assumed that the Farm Security and Rural Investment Act of 2002 (the 2002 Farm Act), the Energy Policy Act of 2005, and the Agricultural Reconciliation Act of 2005 remain in effect through the projection period.

 

Projections do not reflect the Energy Independence and Security Act of 2007. The projections give description of what would be expected to happen under a continuation of current farm legislation, with specific external circumstances.

 

Back in November, USDA was looking for soy stocks to increase slightly over the course of the 2008-09 marketing year from a carry-in of 5.72 million tonnes to a carryout of 5.96 million tonnes.

 

This assumes planted area of 28.7 million hectares, a yield of 2.83 tonnes per hectare and 2008-09 total usage of 80.2 million tonnes.

 

The only number that is confirmed to be in the 2008-09 balance sheet in the February USDA S&D report is the carry-in of 4.35 million tonnes.

 

USDA is unlikely to change its 2008 yield forecast, but could drop its acreage from 28.7 million hectares due to new-crop corn futures which have out performed newcrop soy futures since last fall.

 

The agency's projected 2008-09 demand of 80.2 million tonnes may be nudged higher in light of larger 2007-08 demands.

 

The current forecast for South American soy stocks is 4 million tonnes below the previous year versus.

 

On biofuels, the long-term baseline notes that expansion in the industry is projected to continue, particularly over the next few years, exceeding 12 billion gallons by 2010. 

 

U.S. & South America Soybean/Products Balance
	United States			Argentina			Brazil
	Actual	Estimate	Proj.	Actual	Estimate	Proj.	Actual	Estimate	Proj.
	Jun-05	Jul-06	Aug-07	Jun-05	Jul-06	Aug-07	Jun-05	Jul-06	Aug-07
Soybeans	thousand tonnes
Carryin	6,960	12,229	15,589	174	334	2,264	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	2,200	40	60	100
Crush	47,324	49,160	49,805	32,748	35,600	38,750	28,756	30,500	29,400
Exports	25,579	30,428	27,080	7,130	10,250	10,500	24,770	25,300	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	81,332	41,353	47,370	50,870	56,426	58,734	62,750
Carryout	12,229	15,589	5,025	334	2,264	594	2,252	2,578	1,928
Soymeal	thousand tonnes
Carryin	156	285	318	1,686	1,996	1,696	640	794	766
Production	37,416	39,033	39,448	25,582	27,718	30,425	22,300	23,637	22,755
Domestic use	30,114	31,171	32,024	574	618	645	10,073	11,000	11,220
Net Exports	7,173	7,829	7,470	24,698	27,400	29,764	12,073	12,665	11,620
Usage	37,287	39,000	39,494	25,272	28,018	30,409	22,146	23,665	22,840
Carryout	285	318	272	1,996	1,696	1,712	794	766	681
Soybean oil	thousand tonnes
Carryin	771	1,366	1,317	385	487	520	248	300	286
Production	9,248	9,292	9,421	6,169	6,810	7,400	5,521	5,850	5,641
Domestic use	8,146	8,502	9,026	402	600	985	3,172	3,455	3,540
Net exports	507	839	731	5,665	6,177	6,435	2,297	2,409	2,167
Usage	8,653	9,341	9,757	6,067	6,777	7,420	5,469	5,864	5,707
Carryout	1,366	1,317	981	487	520	500	300	286	220

 

USDA Export Sales (tmt) - Week of 07 February 2008
		New	Accum.				New	Accum.
Country	Commodity	Sales	Exports		Country	Commodity	Sales	Exports
Belgium	Soybeans	2.70	182.50		Mexico	Soymeal	6.60	410.60
China	Soybeans	32.10	7957.70		Nicaragua	Soymeal	4.00	20.00
Colombia	Soybeans	10.70	126.90		OPAC Is.	Soymeal	0.80	2.80
Costa Rica	Soybeans	34.60	122.60		Saudi Arabia	Soymeal	8.30	129.90
Germany	Soybeans	127.20	696.50		Taiwan	Soymeal	2.00	1.90
Indonesia	Soybeans	0.90	481.20		Thailand	Soymeal	0.50	7.70
Japan	Soybeans	36.60	1356.40		Turkey	Soymeal	0.80	33.40
Mexico	Soybeans	143.60	1577.30		Canada	Soyoil	0.60	11.80
Netherlands	Soybeans	63.80	835.10		Colombia	Soyoil	0.40	15.00
Philippines	Soybeans	8.40	26.20		Cuba	Soyoil	0.30	6.50
Spain	Soybeans	120.30	399.40		Dom. Rep.	Soyoil	2.50	5.60
Taiwan	Soybeans	30.40	835.50		Mexico	Soyoil	2.40	63.20
Canada	Soymeal	59.20	487.70		Venezuela	Soyoil	3.00	6.00
Colombia	Soymeal	22.90	134.70
France	Soymeal	25.00	0.00		Export Sales Totals (tmt)
Honduras	Soymeal	5.50	62.20			Outstanding	Accum.	New
Ireland	Soymeal	5.00	3.00		Commodity	Sales	Exports	Sales
Jamaica	Soymeal	1.80	35.20		Soybeans	7,288.90	17,140.30	328.40
Japan	Soymeal	3.20	110.80		Soymeal	1,909.30	2,734.80	106.60
Malaysia	Soymeal	0.60	25.50		Soyoil	316.80	351.10	24.10