March 13, 2006

 

ASA Weekly: USDA expects lower soybean imports from China and EU; no EU-wide rules for biotech crops

 

 

USDA expects lower soybean imports from China and EU

 

US soybean production in 2006/07 is expected to be 84 million tonnes with the yield expected to be 2.91 tonnes/hectare, according to USDA's latest S&D report. Planted area likely will be 29.2 million hectares. USDA projects US soybean ending stocks for 2005/06 to be 15.4 million tonnes, due to reduced soybean exports. Exports are projected at 24.5 million tonnes, reflecting lower imports for China and EU.

 

USDA also said lower domestic soymeal use likely will be offset by soymeal exports. Soyoil sales remain weak despite abundant soyoil supplies and as a result, soyoil stocks are estimated to be 1.22 million tonnes, the highest since 2000/01.

 

Global oilseed production for 2005/06 is projected at a record 393 million tonnes, up 12.7 million tonnes from 2004/05, USDA said. China soybean production is expected to be 18.3 million tonnes based on increased area and yield.

 

USDA did not alter its forecasts for Brazilian and Argentine soybean production. It left those unchanged in the March supply and demand report. The USDA forecast for Brazilian soybean production remains stable at 58.5 million tonnes and the forecast for Argentine production remains the same at 40.5 million tonnes.

 

No EU-wide rules for biotech crops

The EU last week backed away from trying to establish bloc-wide laws on segregating genetically engineered crops, even though regulators fear some EU countries are imposing unfair rules. EU regulators say the situation for each crop in each country is too complex to make one standard rule, though they could revisit the issue later.

 

Meanwhile, the European Food Standards Authority (EFSA) also came under fire from EU ministers for failing to give clear and full reasoning on why it approves certain GMOs. There was criticism that its decisions and studies were not seen to be objective, and that it would be preferable if non-governmental organisations and independent scientists could give input into decisions as well.

 

It was also deemed unfair that a company seeking approval for its product should be the same company that supplied the scientific data on its safety.

 

The Commission was quick to defend EFSA, with Environment Commissioner Stavros Dimas explaining it had only relatively recently been established, and was still finding its feet. The body was subject to an ongoing review throughout this year, he added.

 

US's House Agriculture Committee farm bill hearing focuses on exports

 

The House Agriculture Committee held its third farm bill field hearings last week in Nebraska. During the course of the hearing, ranking member Collin Peterson (D-Minn.) worried about agricultural imports.

 

"We don't want to get into the same position with food that we've gotten into with oil," said Peterson. "If the trend continues, we will be close to being a net importer of agricultural products," Peterson said.

 

In a statement issued by the committee, Rep. Tom Osborne (R-Neb.) said WTO negotiations are hanging over consideration of a new farm bill "and there is considerable concern as to how quickly a new farm bill can be written while these WTO concerns are out there."

 

However, Osborne, who will run for governor of Nebraska this November, added, "I think we need to go ahead with the farm bill and try to shape the WTO negotiations as best we can rather than be in a reactive mode."

 

Soybean industry pushes bio-diesel tax incentives in US state Iowa

Soybean industry advocates last week made a pitch for new tax incentives for the use of soy diesel. A measure that would create new tax incentives for the use of soy bio-diesel is sitting in the Iowa House Ways and Means Committee, and advocates say they are worried that soy-based fuels are taking a back seat in the Legislature's debate over alternative fuels.

 

Corn-based ethanol has captured most of the attention, with the main debate focusing on whether the state should require all fuel sold in the state to be mixed with 10 percent ethanol or if incentives should be approved to increase access to E85, an 85-percent ethanol blend. There are currently four plants in the state producing soy diesel, and House Speaker Chris Rants said lawmakers have no intention of limiting the debate to ethanol.

 

Weather factors lower Brazil's 2005/06 crop

The Brazilian Census Bureau (IBGE) said last week that Brazil likely will harvest roughly 57 million tonnes of soybeans in 2005/06, down 2.5 percent from January's estimate of 58.5 million tonnes. IBGE said that dry weather and poorly distributed rainfall in Bahia, Minas Gerais, Mato Grosso do Sul and Parana states contributed to overall crop reductions.

 

Bahia's crop estimate was reduced to 1.9 million tonnes; Minas Gerais region is now expected to produce 2.6 million tonnes; Mato Grosso do Sul production fell to 4.6 million tonnes from the 5.2 million tonnes IBGE estimated in January.

 

Production also fell in Parana due to dry weather conditions in the south-west mainly. Parana is expected to harvest 9.9 million tonnes of soybeans in this 2005/06 season, compared to IBGE's January estimate of 10 million tonnes.

 

However, the top producing state, Mato Grosso, saw a slight increase in soy production estimates in February, rising to 17.5 million tonnes from the 17.4 million IBGE estimated in January. Rio Grande do Sul, remained at the January estimate level of 8.2 million tonnes.

 

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	2,453	715
Production	66,778	85,013	82,820	33,000	39,000	40,500	50,500	51,000	58,500
Imports	151	152	109	540	530	485	364	400	425
Crush	41,631	46,160	46,811	25,072	27,800	29,100	29,172	28,175	29,675
Exports	23,946	30,011	27,759	6,500	9,800	10,000	19,571	22,180	25,750
Other	3,146	5,099	4,297	1,552	1,795	1,810	2,899	2,783	3,000
Usage	68,723	81,270	78,867	33,124	39,395	40,910	51,642	53,138	58,425
Carryout	3,059	6,954	11,016	2,046	2,181	2,256	2,453	715	1,215
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	22,200	23,395
Domestic use	28,590	30,448	31,116	700	850	950	8,784	8,850	9,250
Net Exports	4,372	6,526	5,928	19,100	20,750	22,050	14,367	13,682	14,050
Usage	32,962	36,974	37,044	19,800	21,600	23,000	23,151	22,532	23,300
Carryout	191	155	227	354	560	460	532	200	295
Soybean oil	thousand tonnes
Carryin	676	488	771	99	74	100	150	93	95
Production	7,748	8,781	9,011	4,513	5,115	5,354	5,258	5,120	5,371
Domestic use	7,651	7,910	8,142	140	145	155	2,710	2,848	2,870
Net exports	285	588	583	4,398	4,944	5,224	2,605	2,270	2,516
Usage	7,936	8,498	8,725	4,538	5,089	5,379	5,315	5,118	5,386
Carryout	488	771	1,057	74	100	75	93	95	80

 

USDA Export Sales (tmt) - Week of 02 March 2006
Country	Commodity	New Sales	Accum. Exports		Country	Commodity	New Sales	Accum. Exports
Canada	Soybeans	1.40	150.70		Dom. Rep.	Soymeal	15.00	136.50
China	Soybeans	335.30	7760.00		Jamaica	Soymeal	3.90	44.70
Colombia	Soybeans	8.10	98.10		Japan	Soymeal	15.60	169.00
Costa Rica	Soybeans	2.00	129.10		Mexico	Soymeal	35.70	620.90
Egypt	Soybeans	18.00	401.50		Morocco	Soymeal	14.60	35.00
Germany	Soybeans	63.10	260.20		New Zealand	Soymeal	5.50	24.00
Guatemala	Soybeans	1.00	92.00		Nicaragua	Soymeal	1.60	27.50
Indonesia	Soybeans	3.90	634.60		Salvador	Soymeal	1.90	63.70
Israel	Soybeans	17.50	120.10		Bahamas	Soyoil	0.10	0.10
Japan	Soybeans	130.20	1594.50		Canada	Soyoil	0.90	12.70
Korea, Rep.	Soybeans	1.30	331.90		Hong Kong	Soyoil	5.50	0.80
Mexico	Soybeans	39.20	1811.10		Mexico	Soyoil	0.10	65.20
Netherlands	Soybeans	62.80	834.50
Portugal	Soybeans	56.60	129.30		Export Sales Totals (tmt)
Philippines	Soybeans	3.30	55.90		Commodity	Outstanding Sales	Accum. Exports	New Sales
Taiwan	Soybeans	36.30	1033.30		Soybeans	3,133.70	16,972.80	504.50
Canada	Soymeal	13.60	478.40		Soymeal	1,178.10	2,804.40	75.80
Colombia	Soymeal	14.40	181.80		Soyoil	98.10	126.30	22.40