October 25, 2006

 

ASA weekly: Barge movements lag; food and grain company offers low linolenic contract; Illinois's largest biodiseal plant in pipeline

 

 

The movement of grain by barge is lagging the pace given the level of corn harvest.

 

But the soy movement is doing its best to sustain barge volumes. For the week ending Oct 14, soy barge movements were projected to total more than 375,000 tonnes, about 5 times greater than volumes last year for the same week while progressing along the historical path of the past 5 years. Soy movements tend to peak in mid-November.

 

CHS offers low linolenic contract

 

CHS Inc, a grains and foods company, is offering a special contract programme to producers and elevators for low linolenic trait soy, according to a report from "The Public Ledger". This is a revised offer which will include varieties from both Monsanto and Pioneer Hi-Bred International.

 

The company will pay a 40-cent per bushel premium for the identity-preserved beans upon delivery to the CHS crushing plant in Fairmont, Minn.

 

Low linolenic beans contain less than 3 percent linolenic acid, compared with the 8 percent in traditional beans, thus reducing the need for partial hydrogenation during the refining process. This results in lower trans-fat levels.

 

Meanwhile, Arkansas Soy Energy Group LLC has started initial work on the state's third commercial-scale biodiesel plant. The 7-million gallon a year plant will be located near DeWitt, in southeast Arkansas. The project will include a grain-handling facility, soy crush plant and soymeal mill.

 

Bunge North America announced the creation of Biofuels Company of America LLC, a joint venture with Memphis-based Biodiesel Investment Group to build Illinois' largest biodiesel plant. A 45-million gallon per year biodiesel plant will be built adjacent to Bunge's soy processing facility in Danville, Illinois. Plant could be operational in the first quarter of 2008.

 

Farm bill, TPA key to WTO talks

 

Decisions in the US on the next farm bill and on Trade Promotion Authority (TPA) are two key matters that will affect the potential for the Doha Round of WTO talks, according to WTO director general Pascal Lamy.

 

Given that few negotiating positions have changed since the talks were suspended in July, Lamy noted, "The possibility that negotiations will fail is now being taken seriously by many countries."

 

He further expressed disappointment at the rise in bilateral trade deals in the wake of the suspension of Doha Round negotiations. Bilateral deals have become "the fashion" lately, Lamy stated. "They do not cover all trade and achieve nothing as regards to discipline on farm subsidies, fisheries aid and anti-dumping issues¨Cwhich are of huge importance to developing countries."

 

He said while calls for a resumption of talks by some countries were welcome, "these political signals do not represent a change in negotiating positions, especially when they are addressed to others."

 

As for agriculture and development be removed from the Round, Lamy warned that would force the countries in the WTO to halt any current work and gather again to set a new negotiating mandate.

 

NOPA: Higher September crush despite lower capacity

 

The National Oilseed Processors Association (NOPA) reports that member firms crushed 3.74 million tonnes of soy during September, compared to 3.66 million tonnes in August and 3.46 million tonnes during September last year.

 

The capacity of 4.35 million tonnes was down 145,000 tonnes from the previous month and 14,500 tonnes less than a year ago. There were 3,233,489 tonnes of soymeal produced by NOPA member firms, compared to 3,170,777 tonnes last month and 3,000,819 tonnes last year.

 

Soymeal exports came at 418,085 tonnes, 62,241 tonnes lower than a month ago but 135,216 tonnes higher than September last year.

 

Member firms produced 732,000 tonnes of soyoil, compared to 709,000 tonnes for August 2006 and 666,000 tonnes during September 2005. Soyoil stocks totalled 1.19 million tonnes, compared to 1.21 million tonnes the prior month and 623,000 tonnes last year.

 

Also, soy complex closed mostly higher on October 19 reflecting significant fund buying and the liquidation of corn/soy and wheat/soy spreads. While harvest is making progress in the western corn-belt, progress has been delayed in the eastern belt by wet conditions.

 

Meanwhile, the USDA has confirmed incidences of Asian soy rust in fields in Indiana, Tennessee and Illinois. Given that these finds are coming this late in the season and after most soy fields are mature, there may not be any yield-reducing impact.

 

However, this will heighten scouting activities in 2007 in these areas. November bean futures closed up US$1.29, finishing at US$223.40; January was US$1.65 higher, closing at US$228.73; and March gained US$1.01 ending at US$231.02. December meal was down US$0.99, closing at US$196.98; January was US$0.99 lower, finishing at US$198.08; and March was down US$1.32 to finish at US$200.40. December oil closed US$13.23 higher to finish at US$585.10; January was up US$13.23, closing at US$592.82; and March increased US$11.02, ending at US$598.77.

 

U.S. & 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	86,779	39,000	40,500	41,300	53,000	55,000	56,000
Imports	152	109	109	708	900	950	353	86	100
Crush	46,160	47,320	48,308	29,560	32,600	33,700	29,730	28,000	27,300
Exports	30,011	25,800	31,162	10,548	7,400	7,000	22,798	25,550	26,700
Other	5,093	5,103	4,520	1,520	1,535	1,536	2,785	2,336	2,024
Usage	81,264	78,223	83,990	41,628	41,535	42,236	55,313	55,886	56,024
Carryout	6,960	12,214	15,112	514	379	393	1,440	640	716
Soymeal	thousand tonnes
Carryin	191	156	272	1,350	1,187	2,165	870	640	856
Production	36,936	37,342	38,360	23,347	26,101	26,548	22,928	21,874	21,435
Domestic use	30,446	30,255	30,935	537	573	602	9,162	9,556	9,511
Net Exports	6,525	6,971	7,425	22,973	24,550	25,800	13,996	12,102	12,220
Usage	36,971	37,226	38,360	23,510	25,123	26,402	23,158	21,658	21,731
Carryout	156	272	272	1,187	2,165	2,311	640	856	560
Soybean oil	thousand tonnes
Carryin	488	771	1,374	660	542	712	293	248	450
Production	8,781	9,228	9,099	5,404	6,228	6,397	5,708	5,352	5,233
Domestic use	7,910	8,119	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	8,625	9,251	5,522	6,058	6,513	5,753	5,150	5,385
Carryout	771	1,374	1,222	542	712	596	248	450	298

 

USDA Export Sales (tmt) - Week of 12 October 2006
Country	Commodity	New Sales	Accum. Exports		Country	Commodity	New Sales	Accum. Exports
China	Soybeans	388.30	940.00		Guatemala	Soymeal	19.00	16.50
Colombia	Soybeans	11.20	38.20		Guyana	Soymeal	2.00	2.00
Egypt	Soybeans	19.00	38.60		Honduras	Soymeal	5.00	0.00
France	Soybeans	60.00	0.00		Japan	Soymeal	1.00	6.10
Indonesia	Soybeans	40.50	132.80		Korea, Rep.	Soymeal	1.50	0.00
Israel	Soybeans	8.00	57.10		Malaysia	Soymeal	1.00	0.60
Japan	Soybeans	49.40	271.70		Morocco	Soymeal	14.00	30.30
Mexico	Soybeans	104.20	568.80		Philippines	Soymeal	9.40	5.80
Morocco	Soybeans	23.00	12.70		Saudi Arabia	Soymeal	17.30	17.30
Netherlands	Soybeans	3.30	201.70		Canada	Soyoil	1.20	1.80
Syria	Soybeans	14.50	73.50		Colombia	Soyoil	1.50	1.50
Taiwan	Soybeans	2.50	218.20		Saudi Arabia	Soyoil	3.20	0.00
Turkey	Soybeans	5.70	166.20
UK	Soybeans	36.00	0.00
Canada	Soymeal	24.10	54.80		Export Sales Totals (tmt)
Colombia	Soymeal	20.20	7.20		Commodity	Outstanding Sales	Accum. Exports	New Sales
Cuba	Soymeal	14.80	0.00		Soybeans	8,995.80	2,987.80	868.40
Dom. Rep.	Soymeal	10.50	0.00		Soymeal	1,704.40	175.90	151.40
Egypt	Soymeal	8.40	8.40		Soyoil	86.00	19.10	6.20