June 18, 2007
 

ASA weekly: USDA report recap; Brazil to halt planting in three states to stop spread of Asian soy rust; Bipartisan group of senators introduce biodiesel mandate legislation; Peterson remains on schedule to complete farm bill in June

 

 

USDA report recap
 

USDA's June Crop Production and updated monthly WASDE reports were released last week. Only minor changes were made to US supply use balances with a tone of fundamental tightness carried forward from last month's production and supply/use reports. 

 

US soybean supply/use elements were unchanged for both the 2006/07 and 2007/08 crop years as were those for soybean meal. For soybean oil, estimated use for biodiesel was reduced for both 2006/07 (68,000 tonnes) and 2007/08 (136,000 tonnes) though larger estimated other domestic use absorbed the cut. The sharp drop in 2007/08 US soybean stocks to 8.71 million tonnes from a beginning stock level of 16.6 million tonnes was a focus for USDA.

 

Global oilseed production for 2007/08 is projected by USDA to be 399 million tonnes, down 5.4 million tonnes from 2006/07.  If realised, this would be the first year-to-year decline in global oilseed production since 1995/96.  Foreign oilseed production is projected at 315 million tonnes, up 7 million tonnes from 2006/07. 

 

Global soybean production is projected to be 225 million tonnes, due to lower production prospects in the United States as producers reduced planted area sharply from 2006/07.  Higher soybean production is projected by USDA for both Brazil and Argentina as increased area in both countries more than offsets reduced yields. 

 

Higher area is projected for Argentina despite increased corn planting as producers increase second crop soybean production and continue to expand plantings on to pasture land.  The Brazil crop is projected at 61 million tonnes and the Argentine crop is projected at 47 million tonnes.  If realised, production in both countries once again will be record high, USDA said.

 

Global production of high-oil-content seed is up 5 percent from 2006/07 reflecting sharp increases in rapeseed production. However, USDA expects soybean, rapeseed, and peanut production to be lower for China for 2007/08.

 

Global protein meal consumption is projected to increase 3.9 percent in 2007/08, the smallest annual increase in four years, USDA said.  Most of the gains are projected for soybean meal despite reduced production prospects for soybeans.  Protein meal consumption is projected to increase 5 percent in China, which accounts for 28 percent of global protein consumption gains. 

 

World soybean trade is projected to reach a record 75.5 million tonnes, up 5.5 million tonnes from 2006/07. China is projected to account for over 80 percent of the increase, reaching a record 34.5 million tonnes of imports, according to USDA.  Although protein consumption gains are projected lower than in recent years for China, imports will be needed to offset reduced oilseed production.

 

Global vegetable oil consumption is projected to increase 4.1 percent in 2007/08 led by increases for China, India, and EU-27. Increased consumption in EU-27 mostly reflects increased production of biodiesel. Global vegetable oil stocks are projected to decline 6 percent from 2006/07 levels.

 

Brazil to halt planting in three states to stop spread of Asian rust
 

Brazil is again set to ban planting of winter soybeans in three centre-west states from Jun 15 for three months to prevent the spread of Asian soy rust disease. The ban on planting comes based on advice from the government's agricultural research agency Embrapa and is applicable in Mato Grosso, Mato Grosso do Sul and Goias.

 

Farmers who ignore the winter planting ban may have their crops destroyed or be fined. Despite last year's winter planting ban, Embrapa estimated that the disease resulted in the loss of 2.67 million tonnes of soybeans this year, similar to losses in the previous harvest.

 

According to Embrapa, Brazilian farmers spent US$2.2 billion, mostly on fungicides, to try and control the disease, but experts said that sprays were often used at the wrong time. Since the disease reached Brazil in 2001/02, the country has lost an estimated US$7.7 billion in soybean output and expenditure on crop protection.

 

Bipartisan group of senators introduce biodiesel mandate legislation
 

Senators Chuck Grassley, Richard Lugar, Dick Durbin, Tom Carper and Barack Obama have introduced legislation that would mandate the use of 1.25 billion gallons of biodiesel per year by 2012.

 

"Biodiesel is just one more way we're lessening our dependence on foreign oil. Everyday we're seeing more renewable energy sources like ethanol and biodiesel being used.

 

"Ensuring continued use of these renewable energy products will only help our efforts to wean us off foreign oil, increase investment in rural America, and benefit the environment," Grassley said. He also said the capital infusion will help jump-start struggling rural economies, create jobs and offer local farmers and residents promising investment opportunities.

 

The amendment sets the mandate to increase over time from 450 million gallons in 2008 to 1.25 billion gallons in 2012. 80 percent of the mandate will be reserved for biodiesel and the other 20 percent may be filled by other "bio-based diesel replacement" products.

 

Peterson remains on schedule to complete farm bill in June
 

House Agriculture Committee Chairman Collin Peterson appears to be maintaining a schedule that will permit a final panel markup of the 2007 farm bill before Congress takes its next recess the week of July 2-6.

 

The final and likely most contentious title of the farm bill -- the commodity title -- is scheduled for a subcommittee markup Jun 19. If panel members cannot complete their work that day, it still would leave the rest of the week for subsequent business meetings. Peterson has scheduled three business meetings on Jun 26, 27, and 28 to complete the full committee's work on the farm bill.

 

In the Senate, however, Agriculture Committee Chairman Tom Harkin still has not released his mark (draft) of the legislation, nor has he scheduled any committee meetings to mark up the bill. Those meetings presumably will occur in July. Harkin earlier indicated he would like to complete his panel's farm bill work by the end of July so the full Senate could take up the legislation in September.

 

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 07 June 2007
Country	Commodity	New	Accum.		Country	Commodity	New	Accum.
		Sales	Exports				Sales	Exports
Belgium	Soybeans	4.5	223.9		Japan	Soymeal	5.9	255.7
Canada	Soybeans	3.6	115.1		Mexico	Soymeal	25.9	951.4
Colombia	Soybeans	19.6	239.2		Nicaragua	Soymeal	0.7	44.3
Egypt	Soybeans	9	701.2		Panama	Soymeal	4.1	105.1
Guatemala	Soybeans	15.7	10.9		Salvador	Soymeal	6.9	82.7
Indonesia	Soybeans	3.1	1222.9		Syria	Soymeal	22.3	16.2
Japan	Soybeans	45.7	2462.5		Turkey	Soymeal	1.5	111.8
Korea, Rep.	Soybeans	26.9	550.4		Dom. Rep.	Soyoil	4	2
Malaysia	Soybeans	5.7	262.1		Mexico	Soyoil	7.3	62.1
Mexico	Soybeans	71.2	2995		Export Sales Totals (tmt)
Taiwan	Soybeans	52.8	1539		Commodity	Outstanding	Accum.	New
Turkey	Soybeans	0.6	518.2			Sales	Exports	Sales
Canada	Soymeal	15.4	909.1		Soybeans	2,262.00	26,951.70	221.2
Dom. Rep.	Soymeal	3.3	304.5		Soymeal	1,506.00	4,722.10	68.7
Jamaica	Soymeal	0.3	71		Soyoil	53	379.7	21.3