April 28, 2008

 

ASA weekly: US soy exports flourish on Argentina slowdown
 

 

Argentina's slower soy shipping pace has shifted additional export business to the US and Brazil.

 

Even though the strike has been temporarily suspended since early April, the negotiations between farmers and the Argentina government are not making much progress.

 

Based on a recent data, Argentina's soy exports look to be about 1.5 million tonnes during April, which could be lower once the final numbers are released.

 

However, the monthly total would be above last year's, when the seasonal decline in US exports was less pronounced than normal due to record US supplies, but down from the previous 4 years.

 

The accumulation of US export commitments to China normally begin slowing down by March, but have risen by 1.14 million tonnes over the past 4 weeks after totaling just 165,000 tonnes during the 3 weeks prior.

 

The expected boost to this year's US export programme likely will eliminate any cushion in 2007-08 soy supplies that was gained when USDA's March 1 stocks report indicated that last year's crop was understated.

 

Meanwhile, Brazil's soy exports of 3.2 million tonnes in March were record large for the month and look to be about 4.0 million in April.

 

This occurs despite reports of workers at a major shipping port (Paranagua) threatening to slow down and some customs officials going on strike.

 

Deal struck on US farm bill

 

The US House and Senate conferees have struck a deal on the new farm bill, which will be worth about US$570 billion over 10 years.

 

The deal includes farm-related tax credits, a disaster aid programme, and new funding for food stamps.

 

The programmes will in part be paid for by a US$400 million cut to direct payments, a subsidy farmers get based on their acreage and the type of crop they grow, and a US$250 million cut to a US$4 billion disaster-aid fund.

 

But most of the offsets for the extra spending will come from extending customs user fees, a revenue-raiser favored by the Bush administration.

 

Lawmakers will continue their discussions about preventing very wealthy farmers from collecting government subsidies. The conferees say they will have a conference report ready for House and Senate floor action by April 29.

 

President Bush on April 25 signed the latest short-term extension of current farm law, which Congress cleared April 24.

 

Argentina hits farm leaders with supply law; strike nears

 

Argentine President Cristina Fernandez yesterday called for calm as talks with farm leaders grew increasingly tense, raising expectations in financial markets that farmers might go back on strike.

 

Reuters reports that farmers have complained of a lack of progress in the negotiations, but Fernandez said discussions should continue.

 

Meanwhile, Argentina's government also carried through with its threat to apply the harsh Supply Law to farmers, summoning leaders of the country's farm groups to testify in a complaint filed by Interior Commerce Secretary Guillermo Moreno.

 

The Supply Law would allow fines, imprisonment and confiscation of property if providers fail to supply the domestic market with essential goods.

 

Dow Jones Newswires reports that the move marks a sharp downturn in already tense negotiations to avoid a repeat of last month's crippling farm strike.

 

US soy complex lower as stronger dollar leads to speculative selling

 

The US soy complex closed lower on April 24 reflecting strength in the US dollar triggered a round of speculative selling across commodities.

 

The setback in soy futures was evenly split between the products as the oil share was unchanged.

 

Soy complex futures remain at risk to periods of weakness associated with the influence of outside markets and speculative traders, but often rebound rather quickly.

 

The trend is seen to continue as long as the fundamentals remain supportive, and they should until the uncertainty about the Argentine situation is resolved and the market has a better handle on what the final corn/soy acreage mix will be in the US.

 

May soy futures closed down US$8.54, finishing at US$495.58; July lost US$9.00, closing at US$500.08; and August was down US$9.37, ending at US$492.73.

 

May soymeal decreased US$5.95 closing at US$381.62; July was US$6.83 lower, finishing at US$385.58; and August soymeal closed down US$7.39, ending at US$376.77.

 

May soy oil decreased US$23.37 to finish at US$1326.51; July was down US$24.03, closing at US$1341.94; and August was US$24.25 lower, closing at US$1348.11.

 

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	15,617	174	334	185	1,638	2,252	3,851
Production	83,368	86,770	70,358	40,500	48,800	47,000	57,000	59,000	61,000
Imports	92	246	163	1,013	2,359	2,600	40	108	130
Crush	47,324	49,160	49,941	32,748	37,600	38,100	28,756	30,770	31,800
Exports	25,579	30,428	27,896	7,130	12,208	10,000	24,770	23,805	27,900
Other	5,288	4,040	4,495	1,475	1,500	1,525	2,900	2,934	2,950
Usage	78,191	83,628	82,332	41,353	51,308	49,625	56,426	57,509	62,650
Carryout	12,229	15,617	3,806	334	185	160	2,252	3,851	2,331
Soymeal	thousand tonnes
Carryin	156	285	318	1,686	2,003	2,076	636	863	1,013
Production	37,416	39,033	39,720	25,582	29,153	29,550	22,300	23,850	24,615
Domestic use	30,114	31,171	32,024	574	620	645	10,000	11,500	12,000
Net Exports	7,173	7,829	7,743	24,691	28,460	29,164	12,073	12,200	12,713
Usage	37,287	39,000	39,767	25,265	29,080	29,809	22,073	23,700	24,713
Carryout	285	318	271	2,003	2,076	1,817	863	1,013	915
Soybean oil	thousand tonnes
Carryin	771	1,366	1,317	385	487	350	248	300	301
Production	9,248	9,292	9,614	6,169	7,200	7,320	5,521	5,910	6,105
Domestic use	8,146	8,502	8,573	402	597	1,135	3,172	3,450	3,640
Net exports	507	839	1,071	5,665	6,740	6,160	2,297	2,459	2,450
Usage	8,653	9,341	9,644	6,067	7,337	7,295	5,469	5,909	6,090
Carryout	1,366	1,317	1,287	487	350	375	300	301	316

 

USDA Export Sales (tmt) - Week of 17 April 2008
Country	Commodity	New Sales	Accum. Exports		Country	Commodity	New Sales	Accum. Exports
Canada	Soybeans	13.60	115.90		Honk Kong	Soymeal	0.40	9.10
China	Soybeans	52.50	10978.00		Ireland	Soymeal	0.60	46.60
Egypt	Soybeans	1.20	693.30		Jamaica	Soymeal	5.20	59.90
Indonesia	Soybeans	135.10	802.20		Japan	Soymeal	1.30	177.40
Japan	Soybeans	35.90	1897.50		Mexico	Soymeal	39.90	683.90
Malaysia	Soybeans	6.00	51.70		Venezuela	Soymeal	3.50	179.90
Mexico	Soybeans	170.40	2337.30		Canada	Soyoil	0.70	20.30
Taiwan	Soybeans	15.10	1327.90		Cuba	Soyoil	5.00	6.50
Turkey	Soybeans	21.10	373.50		Mexico	Soyoil	1.20	81.30
Vietnam	Soybeans	3.70	53.80
Canada	Soymeal	3.60	718.90
Cuba	Soymeal	2.00	133.70		Export Sales Totals (tmt)
Dom. Rep.	Soymeal	13.50	242.90		Commodity	Outstanding Sales	Accum. Exports	New Sales
France	Soymeal	61.40	4.00		Soybeans	4,606.90	23,550.40	476.90
Guatemala	Soymeal	2.90	172.20		Soymeal	1,496.70	4,250.60	176.10
Honduras	Soymeal	8.10	95.60		Soyoil	194.20	708.50	7.40