July 17, 2006

 

ASA weekly: USDA soy production update; soy biodiesel

 

 

US soy production pegged at 82 million tonnes

 

US soy production is projected by USDA to be 81.9 million tonnes. US oilseed production is projected at 91.8 million tonnes as reduced soybean, sunflowerseed, cottonseed, and peanut production are only partly offset by a small increase in canola production, according to the USDA.

 

Lower production and reduced carryin leave 2006-07 soybean ending stocks at 15.2 million tonnes. Meanwhile, USDA expects US oilseed ending stocks for 2006-07 to be 16.6 million tonnes.

 

US soybean crush for 2005-06 is projected at 46.8 million tonnes. USDA increased its crush estimate because of stronger-than-expected soymeal export shipments and sales through June. US soybean exports for 2005-60 should reach 24.6 million tonnes. US ending stocks for 2005-06 are projected at 14.8 million tonnes, USDA said.

 

Global oilseed production for 2006-07 is forecast to reach 386.7 million tonnes with foreign production accounting for 294.9 million tonnes. USDA says Brazil's soybean crop is estimated at 55 million tonnes based on lower yields recently reported by the Government of Brazil.

 

Biodiesel from soy more usable and better for air quality

 

Biodiesel produced from soybeans produces more usable energy and reduces greenhouse gases more than corn-based ethanol, making it more deserving of subsidies, according to a study being published this month in The Proceedings of the National Academy of Sciences.

 

The study, done by researchers at the University of Minnesota and at St. Olaf College in Northfield, Minnesota, points to the environmental benefits of the biodiesel over ethanol made from corn, stating that ethanol provides 25 percent more energy a gallon than is required for its production, while soy biodiesel generates 93 percent more energy.

 

The study concludes that the future of replacing oil and gas lies with cellulosic ethanol produced from low-cost materials like switch grass or wheat straw, if it is grown on agriculturally marginal land or from waste plant material.

 

Indeed, the study found that neither ethanol nor biodiesel could replace much petroleum without having an impact on food supply. If all American corn and soy production were dedicated to biofuels, that fuel would replace only 12 percent of gas demand and 6 percent of diesel demand, the study notes.

 

In related news, the International Energy Agency (IEA) said July 12 that global biofuel production will climb to 1.2 million barrels per day (bpd) in 2011, almost double 2005 production of 650,000 bpd and four times larger than output in 2000. "This could still be an understatement of biofuels growth," the IEA emphasized.

 

The IEA said a study of proposed or existing projects already suggests a potential increase of 1 million bpd in ethanol and biodiesel supplies between 2006 and 2011. "While there are numerous uncertainties regarding medium-term supply projections for biofuels, there is no doubt that capacity will continue to increase rapidly over the next few years given the current political and economic environment," the IEA said.

 

The IEA predicts that European biodiesel production, based on announced construction and capacity expansion plans, will more than double by 2008 from the 64,000 bpd produced in 2005. European ethanol output is also expected to rise to 71,000 bpd in 2008 from just 14,000 bpd in 2005.

 

Due to uncertainties regarding the relationship between biofuels and food prices as well as oil prices, IEA said, "the current economic attractiveness of biofuels could change very rapidly." The agency also holds a fairly conservative biofuel expansion view after 2008, citing that Brazil, which primarily derives ethanol from sugarcane, has production advantages to allow its industry to grow further as the nation's production will likely stay more constant.

 

U.S. & South America Soybean/Products Balance
¡¡	United States			Argentina			Brazil
	Actual	Estimate	Proj.	Actual	Estimate	Proj.	Actual	Estimate	Proj.
	2004/05	2005/06	2006/07	2004/05	2005/06	2006/07	2004/05	2005/06	2006/07
Soybeans	thousand tonnes
Carryin	3,059	6,960	15,502	1,657	810	673	3,400	1,535	1,147
Production	85,013	83,999	83,824	39,000	40,500	41,300	53,000	55,700	56,000
Imports	152	108	109	779	800	860	408	428	450
Crush	46,160	46,675	47,627	29,010	29,551	30,700	29,730	28,200	28,500
Exports	30,011	24,494	29,665	10,000	10,250	9,800	22,798	25,700	25,500
Other	5,093	4,396	4,326	1,616	1,636	1,652	2,745	2,616	2,324
Usage	81,264	75,565	81,618	40,626	41,437	42,152	55,273	56,516	56,324
Carryout	6,960	15,502	17,817	810	673	681	1,535	1,147	1,273
Soymeal	thousand tonnes
Carryin	191	155	227	1,350	877	594	753	896	546
Production	36,938	36,708	37,816	22,907	23,340	24,330	22,917	22,071	22,565
Domestic use	30,448	30,300	30,935	537	573	602	8,735	9,350	9,550
Net Exports	6,526	6,336	6,881	22,843	23,050	23,796	14,039	13,071	12,970
Usage	36,974	36,636	37,816	23,380	23,623	24,398	22,774	22,421	22,520
Carryout	155	227	227	877	594	526	896	546	591
Soybean oil	thousand tonnes
Carryin	488	771	1,265	660	542	431	293	128	126
Production	8,781	9,101	8,970	5,404	5,496	5,850	5,588	5,400	5,415
Domestic use	7,910	8,142	8,618	408	433	488	3,059	3,136	3,210
Net exports	588	465	519	5,114	5,174	5,400	2,694	2,266	2,200
Usage	8,498	8,607	9,137	5,522	5,607	5,888	5,753	5,402	5,410
Carryout	771	1,265	1,098	542	431	393	128	126	131

 

USDA Export Sales (tmt) - Week of 06 July 2006
Country	Commodity	New Sales	Accum. Exports		Country	Commodity	New Sales	Accum. Exports
Canada	Soybeans	2.50	192.60		Hong Kong	Soymeal	0.20	14.50
China	Soybeans	115.00	9346.20		Jamaica	Soymeal	5.10	85.80
Colombia	Soybeans	8.90	169.30		Japan	Soymeal	9.40	292.00
Costa Rica	Soybeans	0.50	202.50		Mexico	Soymeal	6.60	1107.90
Egypt	Soybeans	9.90	531.90		Salvador	Soymeal	9.90	100.20
Indonesia	Soybeans	24.40	1097.20		Canada	Soyoil	0.20	25.00
Japan	Soybeans	17.10	2517.60		Cuba	Soyoil	0.20	53.30
Mexico	Soybeans	49.30	3072.20
Taiwan	Soybeans	92.40	1549.10
Algeria	Soymeal	0.70	20.90		Export Sales Totals (tmt)
Canada	Soymeal	16.90	885.50		Commodity	Outstanding Sales	Accum. Exports	New Sales
Colombia	Soymeal	12.50	278.30		Soybeans	2,118.60	22,975.60	316.40
Dom. Rep.	Soymeal	1.60	295.40		Soymeal	997.90	4,814.10	54.90
Guyana	Soymeal	2.00	4.40		Soyoil	36.40	265.10	0.40

 

Thursday Spot and Futures Prices, 06 July 2006
Item	Location	July	Aug	Sep
Soybeans ($/mt)	Central Ill./Chicago	219.50	220.53	223.25
	FOB Gulf (Basis)	236.41	237.44	236.48
	CIF Gulf Coast (Basis Chicago)	236.41	237.44	236.48
Board Crush Margin	$/mt	28.34	28.56	27.90
		July	Aug	Sep
Soybean Meal 48%, HiPro ($/mt)	Central Ill./Chicago	188.49	189.71	191.14
	FOB Gulf (Basis)	209.44	209.55	210.98
	West Coast (Basis)	238.10	237.10	238.54
Soybean Meal 44% ($/mt)	Central Ill./Chicago	188.49	189.71	191.14
	FOB Gulf (Basis)	198.41	198.52	199.96
	West Coast (Basis)	227.07	226.08	227.51
Soybean Oil, Crude ($/mt)	Central Ill./Chicago	597.89	599.87	605.38
	FOB Gulf (Basis)	575.84	577.83	583.34
		Beans	Meal	Oil
1 year ago prices	Chicago, $/mt	265.65	253.53	566.58