December 15, 2008

 

USDA kept its soy production estimate at 5.58 million tonnes as the soy crushings fall to 46.7 million tonnes was offset by an 816,000 tonnes increase in exports.

 

Trade projections for USDA's ending stocks ranged from 5.17 million tonnes to 5.85 million tonnes, averaging 5.5 million tonnes.

 

USDA offset the crush reduction mostly with lower domestic usage for soymeal and lower exports for soyoil. USDA revised its soymeal domestic use estimate down by 408,000 tonnes and slashed exports by 181,000 tonnes. In regards to lower soyoil production, exports were lowered by 113,000 tonnes and non- biodiesel domestic use was lowered by 45,400 tonnes.

 

In addition, USDA revised upwards its world carryout due to crush reductions in the United States, Brazil and Argentina. USDA maintained its Argentine soy production forecast at 50.5 million tonnes, but trimmed its estimate for Brazil's crop to 59 million tonnes from 60 million.

 

Weak RMB not affecting US-China agricultural trade

 

USDA Secretary of Agriculture Ed Schafer said recent downturn in China's Renminbi versus the US dollar has not pulled down US-China agricultural trade.

 

He said this amid strong speculation that China may depreciate Renminbi to save tumbling exports. The Renminbi, whose exchange rate is controlled by China's central bank, had stayed flat for four months and then fell to a five-month low in December.

 

China took the place of Japan to be the third largest export market and biggest import market for US agricultural trade in 2007. Farm trade between the two countries totalled nearly US$20 billion last year.

 

Meanwhile, China is continuing to import soy in large quantities. Official data from the China Customs Administration shows that China bought 3.32 million tonnes of the commodity in November, a rise of 56 percent from October.