December 12, 2005

 

ASA Weekly: USDA oilseed production estimates hold steady; Brazil's soy market to slow till mid-January

 

 

USDA oilseed production estimates hold steady

 

Total US oilseed production for 2005-06 is projected at 95.1 million tonnes, up slightly this month due to increased cottonseed production, according to USDA's latest supply and demand estimates.

 

US soybean production for 2005-06 is projected to be 82.8 million tonnes with a yield of 2.87 tonnes/hectare, both unchanged from previous estimates. Planted soybean area is projected to reach 29.2 million hectares in 2005-06, USDA said.

 

Meanwhile, soybean exports could reach 27.8 million tonnes as competition from South American soybean exports continues to limit US trade prospects, especially to the EU and China. US export commitments (shipments plus outstanding sales) through early December are at the lowest level since 1998 and 2005-06 ending stocks are increased to 11 million tonnes, according to USDA. 

 

Global oilseed production for 2005-06 is projected at 387 million tonnes, USDA said. Foreign oilseed production accounts for most of the change, with increases for rapeseed, sunflower seed and soybeans more than offsetting reductions for cottonseed.

 

Soybean production for 2005-06 in Argentina could reach 40.5 million tonnes and Brazil is expected to produce 58.5 million tonnes, said USDA.

 

 

Brazil's soy market to slow till mid-January

 

As the holidays approach, Brazil's soy market will likely slow significantly at least until the mid-January, according to many analysts.

 

The weaker US dollar means less revenue for Brazil's soy exporters who already have tight margins due to farm debts, high taxation, and logistical costs in shipping soybeans out of Mato Grosso, the country's top producer. The state is located more than 2,170 miles from the nearest port.

 

Meanwhile, the size of this year's soy crop is in line with market expectations. The National Commodities Corporation of Brazil's Agriculture Ministry said in the previous week that the 2005-06 soybean crop is expected to produce 57.3-58.5 million tonnes, a slight increase from the government's first estimate of the 2005-06 crop in October.

 

Dry weather from November 2004 to February 2005 damaged yields in large producer states like Rio Grande do Sul, Parana and Mato Grosso do Sul for the 2004-05 harvest.

 

Rio Grande do Sul alone lost 74 percent of its soybean crop. As a result, soy producers in Parana and Rio Grande do Sul have migrated to corn instead. Soy's loss has clearly been corn's gain, with an increase in corn planted area of roughly 5.9 percent, or 9.4-9.6 million hectares, compared to the 9 million hectares planted for 2004-05.

 

 

US farmers see gains from GM crops

 

Genetically modified (GM) crops boosted US farm income by US$2.3 billion in 2004 by increasing production and reducing pesticide use, according to a study published by the National Center for Food and Agricultural Policy. This was the ninth consecutive year that GM crops have been grown commercially in the US. The report says 47.8 million hectares of cropland was planted to biotechnology-derived crops in 2004, up 11 percent on 2003.

 

A total of eleven GM varieties were planted. These are made up six crops--soybeans, canola, corn, cotton, papaya, and squash--and three applications (herbicide-resistance, insect-resistance, and virus-resistance).

 

GM crop production increased by 3 million tonnes, or 24 percent, compared with 2003; production costs were reduced by US$1.7 billion  (down 13 percent) and pesticide use was lowered by 28,000 tonnes (down 34 percent) in 2004, according to the study. As a result, net economic returns increased by 21 percent to US$2.3 billion.

 

While yield improvement and pesticide use reduction was greatest for corn, planting of GM soybeans led to the largest reduction in costs and highest increase in economic benefits. GM corn production went up 2.7 million tonnes in 2004, while the production costs for GM soybeans fell by US$1.37 billion.

 

Overall reduction in pesticide use due to GM varieties was greatest in corn (10,578 tonnes), followed by soybeans (10,170 tonnes).

 

Herbicide-resistant crops accounted for the largest reduction compared to other applications. Herbicide-resistant soybeans accounted for 36 percent of the reduction. About 11 percent of the reduction in pesticide use was due to insect-resistant crops. Benefits are expected to increase in the coming years as more seed supplies become available.

 

U.S. & South America Soybean/Products Balance
	United States			Argentina			Brazil
	Actual	Estimate	Proj.	Actual	Estimate	Proj.	Actual	Estimate	Proj.
	2003/04	2004/05	2005/06	2003/04	2004/05	2005/06	2003/04	2004/05	2005/06
Soybeans	thousand tonnes
Carryin	4,853	3,059	6,954	1,630	2,046	2,181	3,231	2,321	903
Production	66,778	85,013	82,820	33,000	39,000	40,500	50,500	51,000	58,500
Imports	151	126	108	540	530	485	364	470	494
Crush	41,631	46,160	46,810	25,072	27,800	29,100	29,172	28,200	31,026
Exports	23,946	30,011	29,257	6,500	9,800	10,000	19,571	21,830	24,750
Other	3,146	5,073	4,296	1,552	1,795	1,810	3,031	2,858	3,021
Usage	68,723	81,244	80,363	33,124	39,395	40,910	51,774	52,888	58,797
Carryout	3,059	6,954	9,519	2,046	2,181	2,256	2,321	903	1,100
Soymeal	thousand tonnes
Carryin	200	191	155	347	354	560	763	532	200
Production	32,953	36,938	37,116	19,807	21,806	22,900	22,920	22,306	24,465
Domestic use	28,590	30,483	31,116	700	850	950	8,784	8,950	9,450
Net Exports	4,372	6,491	5,928	19,100	20,750	22,050	14,367	13,688	14,673
Usage	32,962	36,974	37,044	19,800	21,600	23,000	23,151	22,638	24,123
Carryout	191	155	227	354	560	460	532	200	542
Soybean oil	thousand tonnes
Carryin	676	488	767	99	74	100	150	93	95
Production	7,748	8,781	8,816	4,513	5,115	5,354	5,258	5,220	5,625
Domestic use	7,651	7,900	8,142	140	145	155	2,710	2,948	3,020
Net exports	285	602	583	4,398	4,944	5,224	2,605	2,270	2,600
Usage	7,936	8,502	8,725	4,538	5,089	5,379	5,315	5,218	5,620
Carryout	488	767	858	74	100	75	93	95	100

 

USDA Export Sales (tmt) - Week of 1 December 2005
Country	Commodity	New Sales	Accum. Exports		Country	Commodity	New Sales	Accum. Exports
Canada	Soybeans	10.80	81.50		Mexico	Soymeal	32.10	238.70
China	Soybeans	523.10	4027.60		New Zealand	Soymeal	5.50	17.50
Colombia	Soybeans	6.70	21.00		Nicaragua	Soymeal	0.90	10.60
Cuba	Soybeans	15.00	35.30		OPAC Is.	Soymeal	0.10	2.70
Egypt	Soybeans	69.40	244.60		Panama	Soymeal	5.90	23.80
France	Soybeans	30.00	28.90		Philippines	Soymeal	98.60	101.20
Germany	Soybeans	60.90	0.90		Salvador	Soymeal	12.70	20.80
Indonesia	Soybeans	60.00	366.00		Taiwan	Soymeal	1.00	8.60
Mexico	Soybeans	52.10	970.30		Tunisia	Soymeal	7.00	14.50
Netherlands	Soybeans	0.50	262.60		Turkey	Soymeal	23.50	37.80
Spain	Soybeans	40.00	58.80		Canada	Soyoil	0.60	6.30
Taiwan	Soybeans	61.90	558.10		Cuba	Soyoil	9.50	19.20
Turkey	Soybeans	16.20	232.10		Dom. Rep.	Soyoil	0.10	2.60
Colombia	Soymeal	13.20	38.20		Hong Kong	Soyoil	0.10	0.40
Dom. Rep.	Soymeal	1.00	42.20		Jamaica	Soyoil	2.00	0.40
Egypt	Soymeal	1.00	33.50		Mexico	Soyoil	0.10	37.60
Guatemala	Soymeal	10.10	32.50		Qatar	Soyoil	0.10	0.20
Honduras	Soymeal	1.50	30.00
Hong Kong	Soymeal	0.50	0.50		Export Sales Totals (tmt)
Hungary	Soymeal	0.30	1.50		Commodity	Outstanding Sales	Accum. Exports	New Sales
Indonesia	Soymeal	0.10	8.20		Soybeans	4,079.40	8,323.70	912.40
Jamaica	Soymeal	9.50	16.50		Soymeal	1,424.60	1,071.40	262.40
Japan	Soymeal	9.50	73.60		Soyoil	93.10	71.60	14.50
Note: New marketing year for soybeans began September 1, 2005