March 10, 2008

 

ASA weekly: US soy complex lower on collapse of Malaysian palm oil and Chinese soyoil futures

 

The collapse occurred amidst talks that China was selling huge quantities of soy oil from state reserves.

 

There have also been reports that purchases of South American soy oil are sold back into overseas market.

 

The weak soy oil futures are moving opposite to the surging petroleum futures, yet soy oil futures had far outrun levels that could be justified by the energy markets, analysts said. 

 

March soy futures closed down US$17.45, finishing at US$530.21; May lost US$18.28, closing at US$535.99; and July was down US$17.82, ending at US$540.49.

 

March soymeal decreased US$9.70 closing at US$404.54; May was US$12.90 lower, finishing at US$408.18; and July soymeal closed down US$11.13 ending at US$412.04.

 

March soy oil decreased US$62.83 to finish at US$1404.33; May was down US$44.09, closing at US$1440.27; and July was US$44.09 higher, closing at US$1456.14.

 

EU underscores importance of GM-free soy

 

EU once again reiterated the importance of GM-free soy as Renaud Layadi, international network manager at the Brittany Regional Council, spoke in France last week.

 

Layadi spoke to the GMFree Regions European Network. He told delegates of the network that the continuation of GM-free feed and food products was vital to food producers, and that a major role was played by soy products.

 

Soy is the most significant import to the EU, with 30 percent of the globally traded soy, equivalent to 100 million tonnes, coming into the EU each year.

 

Most of the soy imports come from the US, Brazil and Argentina, accounting for 85 percent of the volume.

 

Of the 100 million tonnes only 4 million tonnes is for food use, the rest goes to feed use in one form or another.

 

Soy and soy products are needed by all farming systems and choice and availability of non-GM soybeans will be major challenges for the future, Layadi said.

 

China more vocal on the country's need for soy imports
 

The Chinese government has recently said it would encourage the import of soy oil to meet domestic demand.

 

Wei Jianguo, China's vice commerce minister, said the country would import goods with proper policies, without elaborating on them.

 

China's Ministry of Finance has decided to keep the import tax on soy and soy products entering the country at 1 percent until the end of September 2008.

 

Meanwhile, the import tax on rapeseed and rapeseed oil into China remains at 9 percent, putting rapeseed sales at a disadvantage to soy.

 

Soy oil futures have continued to charge higher lately amid talks of large ongoing Chinese soy and soy oil purchases.

 

China's soy oil and rapeseed oil cash prices also have risen sharply in recent weeks.

 

However, China's combined imports of soy, rapeseed and palm oil through the first four months of the marketing year have not exceeded last year's level by a substantial amount and actually were below year-ago levels in December and January.

 

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 28 February 2008
Country	Commodity	New Sales	Accum. Exports		Country	Commodity	New Sales	Accum. Exports
Canada	Soybeans	2.20	103.20		Jamaica	Soymeal	1.80	40.20
China	Soybeans	15.40	9140.70		Mexico	Soymeal	12.80	506.30
Costa Rica	Soybeans	9.90	132.50		New Zealand	Soymeal	6.00	5.00
Egypt	Soybeans	7.60	497.80		Philippines	Soymeal	0.60	306.50
Germany	Soybeans	59.40	811.50		Salvador	Soymeal	3.30	67.70
Italy	Soybeans	1.60	132.20		Trinidad	Soymeal	11.10	10.20
Japan	Soybeans	107.60	1464.30		Venezuela	Soymeal	11.50	144.10
Korea, Rep.	Soybeans	44.90	336.00		Barbados	Soyoil	0.80	0.30
Mexico	Soybeans	61.60	1797.20		Colombia	Soyoil	5.10	25.70
Netherlands	Soybeans	79.00	979.50		Korea, Rep.	Soyoil	11.00	30.80
Singapore	Soybeans	3.60	1.00		Mexico	Soyoil	2.60	68.80
Spain	Soybeans	68.80	521.60		Nicaragua	Soyoil	0.40	7.20
Taiwan	Soybeans	31.50	1008.20		Salvador	Soyoil	0.20	6.30
Canada	Soymeal	12.80	552.00
Colombia	Soymeal	3.80	176.10		Export Sales Totals (tmt)
Costa Rica	Soymeal	4.90	18.60		Commodity	Outstanding Sales	Accum. Exports	New Sales
Dom. Rep.	Soymeal	13.80	195.90		Soybeans	6,137.70	19,708.50	202.70
Egypt	Soymeal	5.30	46.10		Soymeal	1,619.60	3,251.50	75.50
Indonesia	Soymeal	1.20	59.60		Soyoil	218.40	509.00	6.80