November 20, 2007

 

ASA weekly: US soybean exports lag behind EU and China, but expected to hit 27.2 million tonnes in 2007-08

 

 

US soybean export this year lagged behind EU and China

 

However, cumulative figures showed export estimate of 27.2 million tonnes for 2007-08 is attainable.

 

The year-over-year decline in US soybean exports was not due to erosion in world import demand but to the increased competition from South American countries. US exports for September and October were 20 percent below on-year.

 

Meanwhile, Brazilian shipments were 6 percent below last year while Argentine exports tripled. Majority of Argentina's soybean exports go to China, a key market for US shipments.

 

US soybean exports to China is projected to pick up as Argentina's export pace diminishes. However, Argentine exports are projected to remain strong on November.

 

While soybean import demand from the EU-27 and the rest of the world is flat, those areas are importing considerably more soybean meal this year.

 

Soybean crush for October below trade expectations

 

The National Oilseed Processors Association's (NOPA) reported a decline of soybean crush which was only at 4.22 million tonnes, 27,200 tonnes below trade expectations.

 

However, records indicate that October's soybean oil yield was still the second highest for the month, only surpassed by the record high oil yield in 2005.

 

NOPA's soybean oil stocks for the end of October were 53,500 tonnes above the previous month and 19,100 tonnes above last year. Soybean oil stocks are back above 1.36 million tonnes, an indicator that soybean oil use in biodiesel production dropped further on October.

 

USDA November yield projection with no significant change

 

USDA reported no increase on its soybean yield forecast for the third consecutive month. Instead, it trimmed the expected yield by 0.0067 tonnes per hectare to 2.77 tonnes per hectare.

 

USDA's 2007 soybean yield forecast changed very little from the 2.79 tonnes per hectare yield forecast released last March. The yield estimate was maintained in USDA's May, June and July supply and demand reports.

USDA's 2007 yield forecasts, which extends as far back as a year ago when the 5-year baseline forecasts were put together, was recommendable according to industry observers.

 

The 0.0134 tonnes per hectare change in USDA's yield from August to November is the smallest since a 0.0067 tonnes per hectare change in 1997. In that year, USDA cut its yield by 0.0201 tonnes per hectare in September and increased it by 0.0134 tonnes per hectare in October.

 

The change from August to November averaged by 0.1277 tonnes per hectare over the last 20 years and 0.2353 tonnes per hectare over the last 5 years.

 

Unlike USDA's corn yield change in November that usually signals a similar change in January, there is no relationship between November and January soybean yield changes.

 

Yield changes from November to January typically are 0.0336 tonnes per hectare or less.

 

Senate farm bill in standstill

 

Due to a two-week thanksgiving recess, the farm bill debate is at standstill. Senate Majority Leader Harry Reid and Minority Leader Mitch McConnell still have not agreed on the number and scope of any amendment offered as part of debate.

     

Democrats reportedly favored to limit each side to single or low-digit amendments. They also favored those amendments to be germane to the underlying farm bill. Republicans however called for an "open process."

 

Time constraint and senate rules are working against moving the farm bill before the end of 2007. Competing with the farm bill for senators' attention will be a number of appropriations measures and other must-have bills.

 

With this, the farm bill debate is said be continued into 2008. If Congress cannot agree on new legislation early in 2008, a short-term extension of current legislation is expected.

 

Soy holds steady amidst lower corn futures
 

Soybean futures managed to hold steady despite a stronger US dollar, lower corn futures and lower outside markets.

 

Soybean and product futures changed little overnight. Soy gained on corn this week, putting soybeans in a better position to regain U.S. acres next year.

 

However, farmers are months away from finalizing their 2008 planting decisions. January bean futures closed down US$0.28, finishing at US$396.37; March gained US$0.09, closing at US$402.06; and May was up US$0.28, ending at US$403.53. December meal increased US$1.21 closing at US$323.53; January was US$1.21 higher, finishing at US$325.62; and March meal closed up US$1.65 ending at US$330.25.84. December oil closed US$8.60 lower to finish at US$984.57; January was down US$9.92, closing at US$993.61; and March lost US$10.36, closing at US$1004.20.

 

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	2,814	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	2,100	40	60	100
Crush	47,324	49,160	49,669	32,748	35,600	38,750	28,756	30,000	29,400
Exports	25,579	30,428	26,535	7,130	9,700	10,300	24,770	25,800	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	80,651	41,353	46,820	50,670	56,426	58,734	62,750
Carryout	12,229	15,589	5,706	334	2,814	1,244	2,252	2,578	1,928
Soymeal	thousand tonnes
Carryin	156	285	319	1,686	1,996	1,696	640	794	754
Production	37,416	39,028	39,357	25,582	27,718	30,425	22,300	23,160	22,755
Domestic use	30,114	31,106	32,024	574	618	645	10,073	10,700	11,220
Net Exports	7,173	7,888	7,380	24,698	27,400	29,764	12,073	12,500	11,620
Usage	37,287	38,994	39,404	25,272	28,018	30,409	22,146	23,200	22,840
Carryout	285	319	272	1,996	1,696	1,712	794	754	669
Soybean oil	thousand tonnes
Carryin	771	1,366	1,321	385	484	519	248	300	286
Production	9,248	9,291	9,396	6,169	6,810	7,400	5,521	5,760	5,641
Domestic use	8,146	8,492	9,117	405	465	750	3,172	3,390	3,500
Net exports	507	844	685	5,665	6,310	6,670	2,297	2,384	2,192
Usage	8,653	9,336	9,802	6,070	6,775	7,420	5,469	5,774	5,692
Carryout	1,366	1,321	915	484	519	499	300	286	235

 

USDA Export Sales (tmt) - Week of 08 November 2007
Country	Commodity	New Sales	Accum. Exports		Country	Commodity	New Sales	Accum. Exports
Canada	Soybeans	20.40	86.80		Panama	Soymeal	1.50	14.80
China	Soybeans	916.50	2253.30		Philippines	Soymeal	53.50	153.60
Egypt	Soybeans	7.00	197.00		Saudi Arabia	Soymeal	8.40	10.60
Germany	Soybeans	54.50	254.20		Canada	Soymeal	3.50	33.30
Indonesia	Soybeans	10.80	297.10		Colombia	Soymeal	0.50	0.00
Israel	Soybeans	8.50	48.80		Egypt	Soymeal	5.00	0.00
Japan	Soybeans	186.10	600.70		Mexico	Soyoil	1.50	23.40
Mexico	Soybeans	20.70	778.00		Morocco	Soyoil	18.00	0.00
Netherlands	Soybeans	59.40	259.20		Trinidad	Soyoil	1.20	0.50
Taiwan	Soybeans	38.80	357.90
Canada	Soymeal	31.20	142.10
Guatemala	Soymeal	1.50	37.20		Export Sales Totals (tmt)
Indonesia	Soymeal	4.50	15.50		Commodity	Outstanding Sales	Accum. Exports	New Sales
Japan	Soymeal	10.10	35.00		Soybeans	8,440.10	6,007.80	1,296.40
Mexico	Soymeal	99.70	141.80		Soymeal	2,071.70	768.10	153.10
Morocco	Soymeal	15.00	30.80		Soyoil	124.40	50.60	29.70