August 6, 2007

 

ASA weekly: Farm bill passes house; Bush veto possible; Census: June crush meets expectations; New GM soybean approved for use in US and Canada; Bridge collapse will not affect barge traffic

 

 

Farm bill passes house; Bush veto possible
 

White House sources say President George W. Bush would likely follow through with his threat to veto the pending farm bill should it continue to include budget offsets via what the Bush administration terms "a tax increase on foreign investment in the United States."  The House farm bill passed by a relative tight margin of 231-191 - not enough to override any presidential veto.

 

House minority leader John Boehner said Republicans would ultimately defeat House Speaker Nancy Pelosi and others who pushed the tax increase because enough Republicans would vote to sustain any Bush veto. House Ag Committee Chairman Collin Peterson said he is taking Bush's veto threat "with a grain of salt" because the administration also threatened to veto the 2002 farm bill.

 

As for the farm bill as a whole, Pelosi said, "More needs to be done, but we have gone in the right direction for change and for reform." She cited the bill's emphasis on credits and loan guarantees for new forms of bio-fuel produced from grasses and biomass.

 

"Future farm bills will never look the same. More needs to be done, but we have gone in the right direction for change and for reform," Pelosi said. She cited the bill's emphasis on credits and loan guarantees for new forms of bio-fuel produced from grasses and biomass.

 

Meanwhile, Senate Agricultural Committee Chairman Tom Harkin gave the House farm bill both lukewarm support and criticism. "There are a lot of good features in the House bill, and of course, there are others I believe the Senate will improve upon," Harkin said. "Most notably, the House bill did serous damage to conservation," he added.

 

To help fund the House farm bill, Peterson slashed US$4.8 billion from one of Harkin's favorite programmes, the Conservation Security Program (CSP), something Harkin said he would correct in the Senate farm bill version. The House farm bill would promote signup in the CSP through 2012. Harkin wants to expand the programme in the senate bill to 80 million acres.

 

Census: June crush meets expectations
 

The Census Bureau last week estimated the June soybean crush at 4.05 million tonnes, which was in line with expectations based on the NOPA crush of 3.88 million tonnes. The daily crush rate increased for the second consecutive month, going against the tendency for the crush to seasonally decline. Unusually large soybean stocks at crushing plants along with attractive cash crushing margins appear to be preventing the normal seasonal decline in the crush.

 

Census estimated soybean oil ending stocks for June at a record 1.54 million tonnes, which was up 39,900 tonnes from May stocks that were revised 8,160 tonnes higher. The June stocks estimate was roughly 34,000 tonnes more than the market had anticipated, and suggests that monthly domestic usage of soybean oil was in line with that of the past two years, with non-biodiesel usage being down. Though overall domestic usage is up 4 percent so far in 2006/07, non-biodiesel consumption is down 2 percent for the marketing year due to a year-over-year decline during five of the past six months.

 

New GM soybean approved for use in US and Canada
 

US and Canadian regulators have approved the sale of a new genetically modified (GM) soybean that is resistant to herbicides, according to a report from The Public Ledger. USDA, Health Canada and the Canadian Food Inspection Agency have all granted approvals, completing the final step in each country's regulatory process.

 

The soybeans, which will be marketed by Monsanto under the name RReady2Yield, are modified to withstand glyphosate herbicide, which better known as Roundup. Monsanto said the soybean would boost yields by between 7 percent and 11 percent (between 3.5 and 5.5 bushels per acre) for an average farmer in Illinois. This translates into an additional US$25 to US$40/acre in farm revenue, depending on soybean market prices.

 

According to the USDA, 91 percent of the 64.1 million acres planted to soybeans this year were Roundup Ready and the company expects RReady2Yield to replace those seeds.

 

Monsanto said it would launch RReady2Yield on a limited scale in North America in 2009, followed by a broad-scale rollout the following year. Monsanto has not revealed a price for the soybean seeds, but Carl Casale, vice president of North American business at Monsanto, said at a recent earnings call, "Our golden rule is that we price for penetration and ensure value with the farmer. In general, we now price for up to one-half of the value created. We believe this¡­ allows us to be rewarded for innovation, but doesn't dampen expansion of the use of our technology."

 

The new GM soybean will be the basis for stacked seeds that feature several genetic traits. This could include soybeans that produce healthier oils, are fortified with Omega-3 fatty acids, or grow under stress. "As we proceed and interact with food companies and their suppliers, we'll get an understanding of just how to build these multi-trait products, which will be of great interest and demand," said Jerry Hjelle, vice president of regulatory issues at Monsanto.

 

Bridge collapse will not affect barge traffic
 

US oilseed, grain and freight shipments on the Mississippi River are unlikely to be disrupted by the collapse of a Minneapolis bridge because most cargo is loaded downstream, traders and a US Coast Guard spokesman said last week.

 

A nine-mile stretch of the river was closed to vessels south of Minneapolis after the I-35W bridge, an eight-lane structure, buckled during the evening rush hour on Aug 1. Bloomberg News reports that the portion of the river that is closed is 4.3 miles (6.9 kilometres) south of the end of the navigable channel in the Mississippi. The closed section is not heavily used by freight and grain barges, which mostly enter the river further south in Iowa and Illinois for the trip to major export depots in New Orleans.

 

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	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 26 July 2007

Country	Commodity	New	Accum.		Country	Commodity	New	Accum.
		Sales	Exports				Sales	Exports
Canada	Soybeans	1.6	120.9		Philippines	Soymeal	3.7	340.2
Colombia	Soybeans	2.1	290.2		Syria	Soymeal	7.1	23.3
Costa Rica	Soybeans	13.3	250.3		Venezuela	Soymeal	15.4	27
Indonesia	Soybeans	20.1	1395.9		Vietnam	Soymeal	4.8	11.2
Japan	Soybeans	16.2	2812.2		Canada	Soyoil	0.7	30
Mexico	Soybeans	15.2	345.1		China	Soyoil	7	135.2
Syria	Soybeans	7.9	245.9		Mexico	Soyoil	1.1	78.8
Taiwan	Soybeans	24.4	1750.9		Trinidad	Soyoil	0.2	5.4
Colombia	Soymeal	2.2	252.1		Export Sales Totals (tmt)
Dom. Rep.	Soymeal	6.7	338.5		Commodity	Outstanding	Accum.	New
FW IND	Soymeal	1.8	15			Sales	Exports	Sales
Indonesia	Soymeal	7.7	53.3		Soybeans	2,149.00	28,654.90	185.1
Jamaica	Soymeal	2.6	84.6		Soymeal	1,196.90	5,551.00	76.9
Nicaragua	Soymeal	3.7	56.6		Soyoil	95.6	470.4	24