May 28, 2007

 

ASA weekly: China's need for US soybeans exceeds all expectations; Global oilseed consumption expected to rise 2.3 percent annually over next 10 years; Origin of rust infected soybean leaf disputed; April crush totals 144.9 million bushels

 

 

China's need for US soybeans exceeds all expectations; More purchases may be on the horizon

 

The recent import deals that China signed with the United States to import US soybeans exceeded all expectations and there appears to be no end in sight to China's appetite for American soybeans.

 

During a multi-city tour of US soybean-related locations last week, Chinese buyers signed 27 contracts worth an estimated US$2.7 billion with US soybean export companies.

The contracts signed by Chinese companies account for 70 percent of the 410 million bushels of soybeans US farmers are expected to sell to China during the 2007 market year, more than half of USDA's prediction for China's total imports of the commodity in 2006/07. Moreover, industry experts hinted that more contracts would be signed in the coming week or so.

Ma Xiuhong, China's vice minister for commerce and leader of the delegation, expressed her surprise at the figures. "I had no idea how many contracts would be signed. It's much more than I expected," she said.

Bian Zhenzhu, vice president of the China Chamber of Commerce for Import/Exports of Foodstuffs, Native Produce and Animal By-Products, said that market forces would determine the quantity of China's soybean imports, rather than specific government policy.

The purchase was more than five times the expectations before the sale. "We had an understanding of what we might be looking at in terms of contract value before the sale," said George Dixon, chairman of the Illinois Soybean Association. "But they bought about four times that. We were really excited." Dixon suggested the large purchase was in part a "hedge against bad weather this growing season."

China also has a significant need for soybeans to supply its growing aquaculture sector. China's aquaculture industry consumes 150 million bushels of soybeans annually.

"If aquaculture continues to grow in the next 10 years as it has the last 10 years, 20 percent of US soymeal could go to aquaculture worldwide," said Eric Niemann, chairman of the United Soybean Board. "We're very confident we'll be able to be a consistent supplier as we have been in the past."

EC: Global oilseed consumption expected to rise 2.3 percent annually over next 10 years

A European Commission (EC) report, based on the latest 10-year projections published by major forecasting institutions, indicates that world soybean stocks are at record levels and oilseed production and consumption are expected to rise by 2.3 percent annually.

China could double its oilseed imports to about 50 million tonnes by 2015-16 - about half of all global oilseed trade. The EU will continue as the second-largest importer, but import forecasts vary between analysts from 13-35 million tonnes, making it difficult to form a precise estimate, according to the EC report.

Meanwhile, the EC report said that over the next decade, oilmeal consumption and production are expected to rise by 2.3-2.7 percent. Oilmeal prices will fall by about 5-10 percent on levels from the past decade. The EU will likely expand imports by 2-4 million tonnes to 25-30 million tonnes, according to the report.

Origin of rust infected soybean leaf disputed; USDA investigating

The Associated Press reports that an announcement that a fungus called Asian soybean rust had been found in southern Iowa earlier this year might not be totally true.

On May 22, state officials said the single leaf infested with the destructive fungus must have been brought into Iowa from outside the state, perhaps to make people think it had grown in Iowa. The investigation has been turned over to the federal government.

USDA's Office of the Inspector General declined to name the person who submitted the sample. Iowa Secretary of Agriculture Bill Northey said the sample was submitted to Iowa State's Plant Disease Clinic and USDA confirmed it tested positive for Asian soybean rust.

Officials with the state agency travelled to the farm and examined the bin and the fields the leaf reportedly came from, as well as surrounding fields. They found no evidence of rust. "If it was represented to come from a field that it did not come from, then it's doubtful that it was a mistake," Northey said.

Officials continue to stress that the infected leaf represented no risk to the state's 2007 soybean crop, as the fungal spores that cause the disease cannot survive freezing temperatures and require green leaf tissue to sustain itself.

Census: April crush totals 144.9 million bushels 

The Census Bureau reported soybean crushings in April totalled 3.94 million tonnes. This figure was below the average survey estimate of 3.98 million tonnes, down from March's 4.24 million tonnes, but above last year's 3.69 million tonnes. The previous week, NOPA reported a crush for April of 3.77 million tonnes.

Soyoil stocks dropped to 1.49 million tonnes from March's 1.52 million tonnes. The average of survey estimates was 1.5 million tonnes. Soymeal stocks were reported at 298,000 tonnes, right in line with March's total but below the average estimate of 315,000 tonnes.

 

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 17 May 2007
Country	Commodity	New Sales	Accum. Exports		Country	Commodity	New Sales	Accum. Exports
China	Soybeans	61.7	10706.9		Philippines	Soymeal	41.4	289.2
Colombia	Soybeans	14.6	216.9		Vietnam	Soymeal	1.6	3.1
Costa Rica	Soybeans	9.3	212.9		Bahamas	Soyoil	0.1	0.4
Malaysia	Soybeans	0.5	192.3		Bahrain	Soyoil	0.1	0.2
Taiwan	Soybeans	78.7	1453.5		Canada	Soyoil	1	23.4
Vietnam	Soybeans	1	6.4		Lebanon	Soyoil	0.1	0.5
Canada	Soymeal	8.1	830.5		Mexico	Soyoil	1.3	51.7
Colombia	Soymeal	7.5	187.3		Panama	Soyoil	2.5	2
Dom. Rep.	Soymeal	9.2	294.1		Thailand	Soyoil	0.1	1
Guatemala	Soymeal	6.6	203.8
Honduras	Soymeal	0.6	83.6		Export Sales Totals (tmt)
Indonesia	Soymeal	17.5	31		Commodity	Outstanding Sales	Accum. Exports	New Sales
Jamaica	Soymeal	0.3	69		Soybeans	2,207.00	26,240.10	83.2
Korea, Rep	Soymeal	0.8	117.1		Soymeal	1,569.70	4,388.80	117.8
Lebanon	Soymeal	7.5	15.9		Soyoil	40.9	360.4	2.6