June 4, 2007

 

ASA weekly: Soybean plantings advance ahead of normal; Favourable factors to increase soybean plantings in 2008; House to resume farm bill markups this week; Scientists develop broadleaf crops that resist dicamba herbicide 

 

 

Soybean plantings advance ahead of normal
 

US soybean planting got off to a slow start this year, but caught up with the five-year average progress during the week ending May 13 and raced ahead of normal during the week ending May 20 to match the fastest planting pace of the past five years.

 

In USDA's most recent Crop Progress report that reflected activity through May 20, soybean planting in the Eastern Corn Belt was an impressive 25 percentage points ahead of the five-year average and was a more modest five percentage points ahead of average in the Western Corn Belt.

 

Areas where planting lagged were in the Western Corn Belt states of Missouri, South Dakota, Nebraska and Kansas where excessive rains have delayed planting in some areas. While localised areas may be experiencing protracted delays, the most delayed state was Kansas where 25 percent of the soybean crop had been planted, which was only 11 percentage points below the 5-year average.

 

Favourable factors could lead to increased soybean plantings in 2008
 

With soybean prices rallying considerably more than corn in recent weeks, 2008 futures prices imply a less favourable economic environment for corn production relative to soybeans than what existed ahead of 2007 plantings.

 

The net return advantage for corn over soybeans going into this planting season was unprecedented. While the net returns signalled for 2008 corn planting as of May 24 futures prices was US$25/acre higher than what existed for 2007, 2008 soybean net returns at current futures prices are US$58/acre higher than prevailed ahead of 2007 plantings.

 

This shift in the relative production economics of corn and soybeans suggests that there should be some recovery in US soybean planted area from this year's sharp drop. Prospects for larger 2008 US soybean plantings combined with record or near-record US old- and new-crop carryouts lessen the importance of an increase in Brazil's soybean area.

 

House to resume farm bill markups this week
 

With Congress coming out of recess, House Agriculture subcommittees will begin plunging into the next round of farm bill markups this week. The actual amount of money that will be available to legislators remains undetermined at this time, but House Agriculture Committee Chairman Collin Peterson said he is getting closer to tapping the US$20 billion reserve fund that was set aside for farm bill spending.

 

However, Peterson has offered no details regarding how much of the reserve fund he planned to use, where he intended to apply the new spending and, most importantly, how any increased spending would offset.

 

Peterson did say he had no plans to apply any of the reserve funds to the commodity title of the farm bill. "If we are to have reforms in the commodity title, then there will be changes in the way the money is allocated within the title," Peterson said. That sets up what could be a lively commodity title markup session at both the subcommittee and full committee levels as well as possibly on the House floor.

 

It is clear that Peterson heard complaints from his members on the reserve fund, and he acknowledged that he may have been too stingy prior to the subcommittee markups. "It was my fault," he said. "If we had this meeting last week, those amendments may have been accepted."

 

Over on the Senate side, Agriculture Committee Chairman Tom Harkin said that unlike Peterson, he intends to tap the entire US$20 billion reserve fund. "With the entire US$20 billion, we can take care of everything," Harkin said. "If we don't get that, then we'll have to throw some stuff overboard. We'll see how much people want to throw overboard."

 

As for the timing of the farm bill process, Peterson said he remains confident that subcommittees would complete their markups during the first two weeks of June. His plan is then to take a week to consider the farm bill package as a whole document before plunging into a full committee markup. The goal is to complete the committee's work before the July 4 congressional recess, thus leaving the panel on track to have the bill considered and passed by the full House before the August recess.

 

Scientists develop broadleaf crops that resist dicamba herbicide
 

University of Nebraska scientists have developed a way to give broadleaf crops such as soybeans the ability to resist the herbicide dicamba. According to the US Environmental Protection Agency, dicamba is a selective benzoic acid herbicide registered for the control of certain broadleaf weeds and woody plants. The chemical kills plants by causing rapid, uncontrolled cell growth.

 

The Bureau of National Affairs reported that the scientists said dicamba-based herbicides, sold under trade names such as Banvil and Clarity, are relatively inexpensive and environmentally benign because they disappear quickly in plants and soil. However, they said that dicamba also kills broadleaf crops. As a result, its use has been limited to corn and other grassy crops.

 

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 24 May 2007
Country	Commodity	New	Accum.		Country	Commodity	New	Accum.
		Sales	Exports				Sales	Exports
China	Soybeans	68.3	10770.9		Jamaica	Soymeal	4.5	71
Colombia	Soybeans	4.8	223		Mexico	Soymeal	39.6	912.8
Egypt	Soybeans	9	692.4		Singapore	Soymeal	0.5	59.3
Indonesia	Soybeans	69.9	1137.9		Canada	Soyoil	2.3	24.1
Japan	Soybeans	17.4	2377		Mexico	Soyoil	2.6	23.4
Mexico	Soybeans	127.8	2908.1		Lebanon	Soyoil	0.1	53.1
Netherlands	Soybeans	1.5	1399		Nicaragua	Soyoil	1.3	8.1
Philippines	Soybeans	0.7	61.9		Trinidad	Soyoil	0.2	3.5
Vietnam	Soybeans	1	7.4
Canada	Soymeal	8.9	858.5		Export Sales Totals (tmt)
Chile	Soymeal	3.1	152.8		Commodity	Outstanding	Accum.	New
Colombia	Soymeal	2.3	191.6			Sales	Exports	Sales
Dom. Rep.	Soymeal	0.7	304.5		Soybeans	2,331.60	26,460.80	345.3
Guatemala	Soymeal	0.5	203.8		Soymeal	1,532.10	4,499.90	83.5
Guyana	Soymeal	2.5	10.8		Soyoil	42.4	366.5	7.6