November 17, 2005

 

ASA Weekly: Second largest US soybean crop expected in 2005-06; Asian rust a significant threat in Argentina this year

 

Second largest US soybean crop expected in 2005-06

 

Soybean production for 2005-06 is forecast at 82.7 million tonnes, only 3 percent below 2004-05, according to the latest estimate from USDA. If realised, this would be the second largest US soybean crop on record, only behind last year's crop. 

 

USDA also estimates that US farmers will plant 28.9 million hectares of soybeans, down 4 percent from 2004.

 

Meanwhile, US oilseed ending stocks for 2005-06 are projected by USDA to be 11.1 million tonnes, and US oilseed production for 2005-06 is projected at 94.9 million tonnes. US soybean exports for 2005-06 could reach 29.3 million tonnes based on lower than expected sales and shipments, particularly to EU-25 and China, USDA said.

 

Based on Nov 1 conditions, yields are expected to average a record high 2.87 tonnes per hectare, 0.03 tonnes/hectare above last year, USDA said.

 

The Nov 1 yield data from USDA indicates pod counts for the combined 11 objective yield States (Arkansas, Illinois, Indiana, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, Ohio, and South Dakota) are up 2 percent from 2004. Pod counts from the USDA yield survey are the highest on record in Iowa and Ohio, while pod counts were near record highs in Indiana, Minnesota, and Nebraska.

 

Meanwhile, the soybean harvest continued to progress ahead of normal during October, according to USDA. By Oct 30, growers had harvested 92 percent of their acreage, compared with the 5-year average of 86 percent. Progress was at or ahead of normal in all states, USDA said. Harvest was nearly complete in the northern half of the Great Plains and adjacent areas of the Corn Belt.

 

Global oilseed production for 2005-06 is projected at 385.3 million tonnes, according to USDA. Brazil's soybean production is projected at 58.5 million tonnes, down from earlier estimates because of lower than expected planted area as producers face declining prices, stronger local currency, limited access to credit, and higher transportation costs, especially from the centre-west region.

  

Asian rust a significant threat in Argentina this year

 

Argentine soybean farmers could have more trouble with Asian rust this season than they have in previous years, according to Argentina's animal-and food-health agency Sensea. The agency said that rust is spreading in the key soybean-producing provinces of Entre Rios and Santa Fe. Rust has been detected in around 38 places in eight provinces, according to Sensea.

 

Asian rust appeared in at least 10 Argentine provinces last season. However, the disease caused almost no damage because it appeared late in the growing cycle, after crops had already passed through the most important growing stages, according to Sensea.

 

"We're in a more risky situation than we were a year ago," Daniel Ploper, a plant pathologist and director of an experimental research station in Tucuman Province told Dow Jones Newswires. "It seems like each year this disease becomes more of a regular problem."

 

Plant specialists also believe that climatic conditions could be more favourable for the disease this season. "There is a difference from last year," Ploper told Dow Jones. "This winter has been more humid. There was rain in May, June and July. If we are dry in January and February, we shouldn't have problems. But the forecasts are calling for normal, not dry weather during those months. One really never knows about the climate or what will happen."

  

Low prices discourage Brazilian producers; IBGE estimates 58.7 million tonne crop

 

Brazil's domestic soybean prices are at their lowest levels of the year, following the trend of falling international prices.

 

Many factors have contributed to the low prices in Brazil including: high Brazilian currency in relation to the US dollar; good weather there and in other South America producer states; a larger than expected drop in US soy exports; and the fact that Brazilian farmers continue to hold onto stocks from the 2004-05 harvest hoping for prices to rise.

 

Farmers began this planting season with the real much stronger than last year's planting season. According to local Brazilian analysts, Brazil's farmers may very well face the opposite of what they went through last year, when they planted on a strong dollar and sold on a weak dollar. That scenario, coupled with a severe drought in the South, has put soy farmers in a financial bind.

 

In related news, the Brazilian Census Bureau (IBGE) forecast last week that soy production would reach 58.74 million tonnes in the 2005-06 harvests (October-September), up 15 percent on the year before, despite a 6.4 percent reduction in overall planting area.

 

IBGE's soy crop estimate is slightly more optimistic than the crop estimates released by Brazil's Agriculture Ministry the previous week, which had production varying between 56.7 million and 58.6 million tonnes.

 

Farmers across Brazil are reducing their soy planted area due to low international prices, liquidity problems, and an unfavourable currency exchange between the US dollar and Brazilian real, IBGE said.

  

China soy imports up 38.1 percent over 2004 level

 

China's soybean imports in the first 10 months of the year rose 38.1 percent over the previous year to 21.42 million tonnes, the General Administration of Customs said last week.

 

China imported 1.9 million tonnes of soybeans in October, up 21.5 percent on year, the administration said.

 

U.S. & South America Soybean/Products Balance
	United States			Argentina			Brazil
	Actual	Estimate	Proj.	Actual	Estimate	Proj.	Actual	Estimate	Proj.
	2003/04	2004/05	2005/06	2004/05	2005/06	2006/07	2004/05	2005/06	2006/07
Soybeans	thousand tonnes
Carryin	4,853	3,059	8,029	1,630	2,046	3,670	3,129	2,086	934
Production	66,778	85,484	77,740	33,000	39,000	39,000	50,500	51,000	60,000
Imports	151	136	108	540	530	485	350	470	200
Crush	41,631	46,267	45,858	25,072	26,800	28,500	29,172	29,000	31,583
Exports	23,946	29,801	30,345	6,500	9,311	9,800	19,571	20,300	23,200
Other	3,146	4,582	4,095	1,552	1,795	2,010	3,150	3,322	3,575
Usage	68,723	80,650	80,298	33,124	37,906	40,310	51,893	52,622	58,358
Carryout	3,059	8,029	5,579	2,046	3,670	2,845	2,086	934	2,776
Soymeal	thousand tonnes
Carryin	200	191	236	347	354	529	763	532	300
Production	32,953	36,863	36,355	19,807	21,172	22,515	22,920	22,852	24,792
Domestic use	28,590	30,300	30,708	700	850	950	8,784	8,950	9,450
Net Exports	4,372	6,518	5,656	19,100	20,147	21,704	14,367	14,134	15,192
Usage	32,962	36,818	36,364	19,800	20,997	22,654	23,151	23,084	24,642
Carryout	191	236	227	354	529	390	532	300	450
Soybean oil	thousand tonnes
Carryin	676	488	781	99	74	100	150	93	120
Production	7,748	8,764	8,607	4,513	4,824	5,130	5,258	5,220	5,685
Domestic use	7,651	7,847	8,006	140	145	155	2,710	2,785	2,920
Net exports	285	624	651	4,398	4,653	5,000	2,605	2,408	2,735
Usage	7,936	8,471	8,657	4,538	4,798	5,155	5,315	5,193	5,655
Carryout	488	781	731	74	100	75	93	120	150

 

USDA Export Sales (tmt) - Week of 3 November 2005
Country	Commodity	New Sales	Accum. Exports		Country	Commodity	New Sales	Accum. Exports
Canada	Soybeans	4.90	49.70		Jamaica	Soymeal	0.10	6.00
China	Soybeans	362.40	2527.30		Japan	Soymeal	0.20	27.30
Costa Rica	Soybeans	9.30	44.70		Mexico	Soymeal	15.10	135.30
Japan	Soybeans	44.30	346.80		Panama	Soymeal	0.60	18.00
Malaysia	Soybeans	0.70	25.20		Philippines	Soymeal	24.30	29.60
Mexico	Soybeans	56.60	736.20		Taiwan	Soymeal	3.50	1.80
Morocco	Soybeans	20.00	20.50		Trinidad	Soymeal	1.40	1.30
Netherlands	Soybeans	62.50	311.90		Turkey	Soymeal	0.60	13.20
Korea, Rep.	Soybeans	0.10	0.00		Cuba	Soyoil	38.50	0.00
Mexico	Soybeans	126.80	607.10		Guatemala	Soyoil	2.20	0.00
Morocco	Soybeans	38.50	20.50		Indonesia	Soyoil	0.20	0.00
Netherlands	Soybeans	26.80	137.50		Malaysia	Soyoil	0.10	0.10
Spain	Soybeans	58.80	58.80		Mexico	Soyoil	0.10	22.10
Taiwan	Soybeans	123.40	288.70		Trinidad	Soyoil	0.10	0.20
Algeria	Soymeal	5.00	0.00
Belize	Soymeal	0.50	0.00
Canada	Soymeal	15.70	102.60		Export Sales Totals (tmt)
Colombia	Soymeal	4.00	8.70		Commodity	Outstanding Sales	Accum. Exports	New Sales
Dom. Rep.	Soymeal	17.00	9.30		Soybeans	5,241.80	5,060.30	580.10
Guatemala	Soymeal	14.10	12.90		Soymeal	1,313.50	495.90	79.70
Indonesia	Soymeal	1.00	5.20		Soyoil	105.60	28.80	41.30
Note: New marketing year for soybeans began September 1, 2005