May 21, 2007

 

ASA weekly: Senate approves Water Resources Development Act reauthorisation bill; China to import US$2.7 billion worth of US soybeans

 

 

Senate approves Water Resources Development Act reauthorisation bill
 

The Water Resources Development Act (WRDA) reauthorisation bill (HR 1495) passed the Senate on May 16, 91-4. It authorises US$13.9 billion worth of projects, versus about US$15 billion in a House version cleared on Apr 29 by a vote of 395-25.

 

Two-thirds of the WRDA legislation contains funds for projects to boost levees, reverse wetlands loss, and shore up flood protection in Louisiana and the Gulf of Mexico. Conferees will now negotiate a final version. The bill, which includes an estimated 438 earmarks, is the first Senate legislation to require the disclosure of all earmark sponsors.

 

American Soybean Association said it is pleased the Senate approved the WRDA, and is calling for a rapid conference between the House and Senate versions of the bill. "The Senate's passage of the Water Resources and Development Act is great news for soybean growers who have championed much-needed improvements on the Mississippi and Illinois waterways," said ASA President Rick Ostlie. "Modern and efficient waterways and ports are essential to our economic well-being and international competitiveness."

 

The authorisation water resources projects include building seven locks, ecosystem and wetlands restoration, beach restoration, port upgrade and flood control. The bill authorises US$3.7 billion for construction of 1,200-foot locks and major ecosystem restoration on the Upper Mississippi and Illinois Rivers system ¡¡ìC US$1.95 billion for new locks and US$1.7 billion for ecosystem restoration.

 

That amount is about one-fourth of the Senate water bill's entire price tag and is millions more than the House authorised. "By passing WRDA and its updates to the Mississippi River, we'll preserve the low transport costs for the two-thirds of the nation's grain and soybean exports that travel along the Mississippi," said Senator Chuck Grassley.

 

Senator James Inhofe, the top Republican on the Environment and Public Works Committee, said the bill is crucial because two-thirds of all consumer goods pass through harbours maintained by the Corps of Engineers. The nearly 12,000 miles of inland and intracoastal waterways include 192 commercially active lock and dam sites. More than half of those sites are at least 50 years old and need major rehabilitation, he said.

 

"This has not been easy," said bill manager and Environment and Public Works Chairwoman Barbara Boxer. "And someday when I write my book on how a bill really becomes a law, I will let everyone know what it really takes to get a bill like this done, a bill that is seven years in the making." Congress has not enacted a water resources authorisation bill since 2000 (PL 106-541). Congress "normally" passes a revision of WRDA every two years.

 

The Senate measure includes language that would require the White House to recommend which hurricane-protection projects to authorise, based on an Army Corps of Engineers report due by the end of the year.

 

It would also require committee markups of authorising legislation within 45 days of the White House report, limit Senate floor debate to 20 hours, and bar non-germane amendments. The Senate bill allows independent panels to review Corps decisions, while the House bill would limit such panels to reviewing technical information.

 

The bill would authorise funding for many inland navigation, coastal restoration and flood-control projects, and also includes funding for more than 100 environmental infrastructure projects. Language was included that would reduce the estimated US$58 billion backlog of Army Corps of Engineers water projects. The language would require annual reports from the Corps on project funding and projects not receiving construction funding in nine years to be de-authorised.

 

About 25 percent of the money being spent on WRDA will be centred on the Gulf Coast region, restoring coastal areas and moving forward on a Gulf Coast hurricane protection project, projects that the White House say would cost more than the bill outlines.

 

The legislation includes an amendment added to expedite Category 5 hurricane protection projects and to close the Mississippi River Gulf Outlet (MRGO), which critics say was responsible for the storm surge that overwhelmed New Orleans during Hurricane Katrina in August 2005.

 

Chinese sign agreements to import US$2.7 billion worth of US soybeans
 

A Chinese trade delegation last week signed contracts in Des Moines, Iowa, to buy 2.2 million tonnes of soybeans at a value of about US$700 million. Combined with the contracts signed in Chicago earlier last week for 5.7 million tonnes, the total purchases of the Chinese delegation now stands at nearly 8 million tonnes of soybeans worth US$2.7 billion. The volume is nearly three times as much as last year when US$1 billion worth of soybeans were purchased by a similar delegation from China.

 

Wang Chao, the Chinese assistant minister of commerce, said his country is now the world's largest importer of soybeans and that the US is its top supplier. Wang also predicted that as his own country increases imports, total trade between the US and China would be balanced by 2010.

 

In related news, China expects soybean imports will likely continue stable growth for the next couple of years as the economy expands steadily and more existing capacity for crushing is utilised.

 

Cui Xiaoli, a researcher of market economy under the State Council's Development Research Centre, commented recently that China would struggle to increase domestic soybean output, while population growth and increased wealth would boost demand for animal feed including soymeal and vegetable oils such as soy oil. "The imports of soybean will further increase, likely at an annual growth rate of 7 percent, as the demand for animal feed is strong," said Xiaoli.

 

Li Ke, an analyst at China National Grain and Oils Information Centre, said last month that he expects China to import 31 million tonnes of soybeans this year, up 9.2 percent from a year earlier. Imports are likely to reach 35 million tonnes in 2007/08, a further increase of 12.9 percent, he said.

 

U.S. & South America Soybean/Products Balance
	United States			Argentina			Brazil
	Actual	Estimate	Proj.	Actual	Estimate	Proj.	Actual	Estimate	Proj.
	May-04	Jun-05	Jul-06	May-04	Jun-05	Jul-06	May-04	Jun-05	Jul-06
Soybeans	thousand tonnes
Carryin	3,059	6,960	12,229	2,434	514	579	3,598	1,638	2,252
Production	85,013	83,368	86,770	39,000	40,500	45,500	53,000	57,000	58,800
Imports	152	92	109	708	900	725	352	40	100
Crush	46,160	47,320	48,036	29,560	32,600	37,150	29,728	28,756	29,400
Exports	30,011	25,778	29,393	10,548	7,200	7,550	22,799	24,770	26,700
Other	5,093	5,093	4,951	1,520	1,535	1,516	2,785	2,900	2,974
Usage	81,264	78,191	82,380	41,628	41,335	46,216	55,312	56,426	59,074
Carryout	6,960	12,229	16,728	514	579	588	1,638	2,252	2,078
Soymeal	thousand tonnes
Carryin	191	156	285	564	671	564	841	640	894
Production	36,936	37,414	37,939	23,347	25,687	29,250	22,928	22,327	22,800
Domestic use	30,446	30,097	30,527	538	544	550	9,121	10,000	10,644
Net Exports	6,525	7,188	7,425	22,702	25,250	28,700	14,008	12,073	12,215
Usage	36,971	37,285	37,952	23,240	25,794	29,250	23,129	22,073	22,859
Carryout	156	285	272	671	564	564	640	894	835
Soybean oil	thousand tonnes
Carryin	488	771	1,370	91	35	32	293	248	250
Production	8,781	9,250	9,069	5,404	6,000	6,850	5,708	5,521	5,625
Domestic use	7,910	8,144	8,505	378	428	683	3,059	3,222	3,335
Net exports	588	507	667	5,082	5,575	6,166	2,694	2,297	2,292
Usage	8,498	8,651	9,172	5,460	6,003	6,849	5,753	5,519	5,627
Carryout	771	1,370	1,267	35	32	33	248	250	248

 

USDA Export Sales (tmt) - Week of 10 May 2007
Country	Commodity	New	Accum.		Country	Commodity	New	Accum.
		Sales	Exports				Sales	Exports
Barbados	Soybeans	0.4	18.7		Japan	Soymeal	1.2	231.6
China	Soybeans	6	10706.2		Malaysia	Soymeal	3.9	8
Colombia	Soybeans	2.2	209.3		Mexico	Soymeal	52	854.9
Costa Rica	Soybeans	9.3	203.6		OPAC Is.	Soymeal	0.2	2.7
Japan	Soybeans	19.1	2226.7		Philippines	Soymeal	0.6	260
Malaysia	Soybeans	60	190.1		Saudi Arabia	Soymeal	17	58.3
Mexico	Soybeans	35.4	2704.5		Canada	Soyoil	0.7	22.4
Netherlands	Soybeans	3.4	1397.5		Mexico	Soyoil	1.2	49.7
Taiwan	Soybeans	42.3	1432.3		Nicaragua	Soyoil	0.5	8.1
Canada	Soymeal	29.2	805.9		Salvador	Soyoil	1	8.7
Colombia	Soymeal	14.4	180.5		Export Sales Totals (tmt)
Dom. Rep.	Soymeal	3.8	276.9		Commodity	Outstanding	Accum.	New
Honduras	Soymeal	0.8	83.6			Sales	Exports	Sales
Hong Kong	Soymeal	0.7	13.2		Soybeans	2,453.60	25,910.30	222.8
Indonesia	Soymeal	3.6	29.9		Soymeal	1,566.00	4,264.70	86.9
Israel	Soymeal	12.5	56.3		Soyoil	41.6	357.1	3.6