June 27, 2005

 

ASA: May's soybean crush larger than expected; slow growth of Asian rust

 

 

May's soybean crush larger than expected

 

The monthly Census Crush Report showed soybeans crushed in May stood at 3.89 million tonnes, slightly higher than trade expectations and compared with 3.20 million tonnes in May last year.

 

The previous week, the National Oilseed Processors Association (NOPA) reported May crush at 3.72 million tonnes. Oil stocks were pegged at 850,000 tonnes. The larger-than-expected crush appears to be driven by robust soybean meal exports.

 

Analysts expect soymeal domestic use, which is estimated at 5.3 percent above the five-year average from October through April, to be up 5.6 percent for the 2004-05 marketing year as a whole.

 

The bigger soybean crush further undermines soyoil fundamentals, due to larger soyoil supplies that are projected to result in 2004-05 soyoil ending stocks of 771,000 tonnes.

 

Reasons behind Asian rust's slow growth

 

Asian soybean rust cases have been isolated in Florida and Georgia thus far this year, surprising many experts.

 

In an interview with Dow Jones Newswire, Ohio State University plant pathologist Anne Dorrance deduced the reasons could be that many inoculum rust spores did not survive the winter, and that the Florida environment had not been favourable for rust development.

 

Other reasons could be that the weather currents had not allowed for spore movement, while drought in the central corn belt might also be hindering the spread of soybean rust, as well as the development of soybeans themselves.

 

Experts point out that the same conditions that are most conducive to high soybean yields, such as plentiful moisture and warm temperatures, are the same environment needed to promote the rapid spread of Asian soybean rust.

 

Manitoba to import more US soybeans

 

The lower than expected soybean harvest in Manitoba has led to increased imports of US soybeans into the province.

 

Martin Harder, operator of the Jordan Mills soybean processor in Manitoba said that currently, 75 percent of the soybeans being crushed at the facility were imported from US.

 

Oilseed-based bio-fuels increasingly accepted

 

The surging world price of crude oil is making bio-fuels increasingly competitive, International Energy Agency (IEA) said in the week of Jun 20.

 

Soaring oil prices have encouraged major consumers worldwide to sharply increase their use of ¡®green' bio-fuels made from agricultural products such as oilseeds. But in most parts of the world, without hefty tax rebates from governments, the additional costs for producing bio-fuels would make the fuel uncompetitive.

 

It is estimated that bio-fuels need to be priced between US$60 and US$100 a barrel to be competitive without subsidies, IEA said.

 

GM foods on markets safe, WHO said

 

GMO currently on the market does not appear to pose any health threat to humans or to the environment, a WHO report said.

 

However, the report also points out that this does not mean that all GMO is automatically safe for consumption. As a matter of fact, those currently on the market had to go through rigorous safety and risk assessments before being offered for sale.

 

Brazil's farming expansion to slow

 

Expansion in Brazil's farm sector is expected to slow in 2005-06, as weaker commodity prices and high production costs take a toll on farmers' financial returns, USDA reports.

 

Brazil's 2005-06 total grain, oilseed and cotton area is expected to reach 44.7 million hectares, up only 2 percent from last year's record level. Of this total, about 23 million hectares will be planted with soybeans, a figure that remains almost unchanged from last year. The changes reflect the contrasting fortunes of different crops in 2004-05, when many soybean producers made losses, while profit margins for corn were positive.

 

USDA warns that producers may face another year of negative returns as a result of weak commodity prices, rising production costs and a strengthening domestic currency.

 

It is uncertain whether sufficient production financing form either public or private sector sources will be made available to sustain the current record area of grains, oilseeds and cotton, or support its continued growth from current levels, the report revealed.

 

Meanwhile, Brazilian farmers are in default on up to one-third of their debts with the government. High fertilizer and herbicide prices mean that producers will have to cut spending on crops next year, Dow Jones Newswires reported.

 

The worst drought in 50 years in southern Brazil from October 2004 through March this year has also left many producers in a precarious financial situation. As a result, any drought next summer could have a much greater effect on the soybean crop than in previous years.


 

U.S. & South America Soybean/Products Balance

United States 

Argentina

Brazil

Actual

Estimate

Proj.

Actual

Estimate

Proj.

Actual

Estimate

Proj.

2002/03

2003/04

2004/05

2003/04

2004/05

2005/06

2003/04

2004/05

2005/06

Soybeans

thousand tonnes

 Carryin

5,663

4,853

3,059

896

1,630

2,820

681

3,129

4,186

 Production

75,010

66,778

85,484

35,500

33,000

39,000

52,000

52,600

53,000

 Imports

127

151

136

400

540

350

1,124

350

213

 Crush

43,966

41,631

44,906

24,723

24,298

26,842

27,796

29,172

30,215

 Exports

28,441

23,946

29,937

8,910

6,500

8,700

19,987

19,571

20,888

 Other

3,540

3,146

4,171

1,533

1,552

1,652

2,893

3,150

3,200

 Usage

75,947

68,723

79,014

35,166

32,350

37,194

50,676

51,893

54,303

   Carryout

4,853

3,059

9,665

1,630

2,820

4,976

3,129

4,186

3,096

Soymeal

thousand tonnes

 Carryin

218

200

191

330

347

250

490

763

469

 Production

34,666

32,953

35,674

19,486

19,050

21,253

21,950

22,920

23,730

 Domestic use

29,380

29,257

30,345

250

260

270

8,750

8,784

9,400

 Net Exports

5,304

3,705

5,293

19,219

18,887

20,583

12,927

14,430

14,374

 Usage

34,684

32,962

35,638

19,469

19,147

20,853

21,677

23,214

23,774

   Carryout

200

191

227

347

250

650

763

469

425

Soybean oil

thousand tonnes

 Carryin

1,070

676

488

105

99

74

150

150

93

 Production

8,363

7,748

8,509

4,554

4,435

4,947

5,031

5,258

5,448

 Domestic use

7,752

7,651

7,847

130

130

145

2,668

2,710

2,785

 Net exports

1,005

285

587

4,430

4,330

4,676

2,363

2,605

2,666

 Usage

8,757

7,936

8,434

4,560

4,460

4,821

5,031

5,315

5,451

   Carryout

676

488

563

99

74

200

150

93

90

 

USDA Export Sales (tmt) - Week of 16 Jun 2005

Country

Commodity

New Sales

Accum. Exports

 

Country

Commodity

New Sales

Accum. Exports

Belgium

Soybeans

1.5

326.9

 

Hong Kong

Soymeal

0.3

7.7

Canada

Soybeans

0.9

340.5

 

Japan

Soymeal

29.5

244

China

Soybeans

24.7

11791.6

 

Mexico

Soymeal

47.4

752.7

Colombia

Soybeans

0.8

118.7

 

Panama

Soymeal

0.8

84.7

Cuba

Soybeans

0.1

77.9

 

Salvador

Soymeal

0.8

75.0

Denmark

Soybeans

18.7

858.8

 

Vietnam

Soymeal

0.5

3.7

Japan

Soybeans

28.2

2431.2

 

Canada

Soyoil

0.5

22

Mexico

Soybeans

93.6

2610.7

 

Mexico

Soyoil

5.5

136.6

Philippines

Soybeans

23.5

153.3

 

Oman

Soyoil

0.1

0.2

Syria

Soybeans

14.2

75.6

 

 

 

 

 

Taiwan

Soybeans

0.8

1445.4

 

 

 

 

 

Turkey

Soybeans

8.0

713.3

 

Export Sales Totals (tmt)

Canada

Soymeal

9.6

661.4

 

Commodity

Outstanding Sales

Accum. Exports

New Sales

Colombia

Soymeal

4.5

164.8

 

Soybeans

1,344.4

28,309.9

148.6

Ecuador

Soymeal

5.1

29.4

 

Soymeal

732.7

4,534.6

109.6

Guatemala

Soymeal

15.1

188.3

 

Soyoil

35.8

362.3

6.1

 

 

 

 

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