March 3, 2008

 

ASA weekly: High soy prices hold down US biodiesel production

 
Soyoil-based biodiesel continues to drop in the total US biodiesel output on record prices of soy.
 

The share of soyoil in biodiesel was 64.5 percent in December 2007 against an average of 80 percent for the whole of 2007.

 

This is a further drop from a 90-percent share back in 2006, Alan Weber, adviser to the National Biodiesel Board, said last week.

 

Dow Jones Newswires notes that the US biodiesel production has been affected by record high soyoil prices since October last year, though the overall production in 2007 is estimated to have doubled on year to 500 million gallons.

  

US soy complex up on weak dollar, rally in oil and metal markets

  

The US soy complex closed higher on February 28 indicating a drop in the US dollar to new lows and a rally in crude oil and precious metals to new highs.

 

While soy and soyoil markets face the threat of tightening supplies, speculative interest in commodities amid inflationary concerns is contributing to the rally.

 

March soy futures closed up US$14.51, finishing at US$550.60; May gained US$13.69, closing at US$555.74; and July was up US$12.86, ending at US$559.88.

 

March soymeal increased US$8.38 closing at US$411.71; May was US$7.61 higher, finishing at US$419.65; and July meal closed up US$6.94 ending at US$422.40.

 

March soyoil increased US$43.65 to finish at US$1464.96; May was up US$40.34, closing at US$1483.70; and July was US$40.79 higher, closing at US$1498.47.

 

China desperate for soy

 

China soyoil prices hit record highs this week as crushers were running at low capacity amid weak soymeal demand, traders said.

 

Farmers in Heilongjiang were holding back selling oilseed from the 2007 crop. An official in Jiusan Oils and Fats Co Ltd, one of the country's top state-owned crushers, based in Heilongjiang province, said they cannot get hold of any soy as farmers have been reluctant to sell.

 

Furthermore, China's imports of the oilseed were also lower in the month at around 2 million tonnes, against normal consumption of 2.5 to 3 million tonnes, according to local Chinese analysts.

 

According to a report from the state-owned China National Grain and Oils Information Centre, China's soy imports may double this month to around 2.5 million tonnes compared with those of the same period last year.

 

The general Chinese economy is also playing a factor. Last month saw China's inflation accelerate to its fastest pace in more than 11 years after the worst snowstorms in decade's disrupted food supplies.

 

The country's statistics bureau said that consumer prices rose 7.1 percent from a year earlier, after gaining 6.5 percent in December.

 

China's poor rapeseed crop also worsened the already tight oilseed market. China's National Grains and Oils Information Centre said on February 15 that almost half of the autumn/winter rapeseed crop has been affected by damage caused by rain and snow.

  

US census bureau pegs January soy crush at 4.36 million tonnes

 

The US Census Bureau pegged the January soy crush at 4.36 million tonnes, slightly lower than trade expectations of around 4.38 million tonnes, with the December crush revised by 40,800 tonnes to 4.46 million tonnes.

 

With soymeal stocks at the end of January dropping to 268,000 tonnes, domestic soymeal disappearance was larger than expected in December and January.

 

Soyoil stocks were also smaller than expected at 1.4 million tonnes for the end of January, but December stocks were revised up 8,620 tonnes to 1.44 million tonnes.

 

The soyoil yield increased seasonally to 192 kg per tonne, which was the second highest on record for January after 2006's 193.257 kg per tonne.

 

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	2,264	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 21 February 2008
Country	Commodity	New Sales	Accum. Exports		Country	Commodity	New Sales	Accum. Exports
Barbados	Soybeans	1.90	12.20		Honduras	Soymeal	0.50	62.20
Canada	Soybeans	3.30	101.30		Indonesia	Soymeal	0.40	55.70
China	Soybeans	225.30	8722.30		Ireland	Soymeal	3.00	7.30
Colombia	Soybeans	5.40	139.60		Japan	Soymeal	1.00	128.70
Costa Rica	Soybeans	16.00	122.60		Mexico	Soymeal	11.20	455.00
Egypt	Soybeans	123.50	422.20		Panama	Soymeal	29.40	86.30
Germany	Soybeans	55.60	752.10		Philippines	Soymeal	0.50	303.80
Indonesia	Soybeans	46.10	500.30		Romania	Soymeal	0.50	0.00
Iran	Soybeans	15.40	15.40		Saudi Arabia	Soymeal	27.10	130.50
Israel	Soybeans	1.50	226.00		Turkey	Soymeal	1.20	60.40
Japan	Soybeans	8.50	1342.90		Venezuela	Soymeal	14.00	144.10
Mexico	Soybeans	25.50	1699.30		Vietnam	Soymeal	21.70	31.80
Netherlands	Soybeans	64.50	900.50		Canada	Soyoil	0.80	13.70
Panama	Soybeans	1.00	1.00		Hong King	Soyoil	0.20	20.20
Philippines	Soybeans	0.70	26.90
Taiwan	Soybeans	83.80	965.30		Export Sales Totals (tmt)
Turkey	Soybeans	17.10	303.20		Commodity	Outstanding Sales	Accum. Exports	New Sales
Vietnam	Soybeans	0.50	29.10		Soybeans	6,893.40	18,750.10	583.60
Canada	Soymeal	4.50	531.90		Soymeal	1,690.30	3,105.30	102.90
Colombia	Soymeal	1.50	176.10		Soyoil	266.60	454.00	25.80