House Holds Soybean Rust Hearing

The House Agriculture Subcommittees on Conservation, Credit, Rural Development and Research, and General Farm Commodities and Risk Management held a hearing last week to examine the potential impacts of Asian soybean rust on U.S. agriculture. Lawmakers heard from the American Soybean Association, USDA and EPA, and officials from the agriculture chemical industry.

ASA officials testified that despite assurances from the chemical industry that there would be enough supply of needed fungicides, they see potential for the following to develop: (1) Detection and USDA confirmation will come too late for effective treatment to prevent significant yield losses, (2) fungicide supplies will be inadequate or improperly distributed; and (3) shortages of application equipment or custom applicators will occur.

USDA officials expect extension personnel to find rust in soybeans first in the southern Gulf Coast region, possibly by June, and then more northern regions over time. Joe Glauber of the USDA Office of the Chief Economist said that the first cases of soybean rust this year have been in Pasco, Marnando and Marion Counties, in Florida. So far, rust has been confirmed in kudzu, but not on soybean plants. “National activity has increased in terms of surveillance of rust on other crops as well as the planned/planted sentinel plots,” Glauber noted. “Most states in the southern U.S. have planted at least a portion of their sentinel plots and some plots have been planted as far north as Illinois. Recent spore transport simulations indicate a northerly flow from Florida with concentrations higher in northern Florida and parts of Georgia.”

“Disease forecast models show little or no spore deposition and available host is limited to restricted plantings and non-soybean hosts in southern areas,” Glauber said. “Model predictions do not indicate that scouting is required in commercial soybean fields at the present time.”

As for the EPA, agency official Jim Jones testified that pest control supplies are expected to be adequate. Jones said: “In total, there have been over 130 exemptions granted related to soybean rust control. This represents nine active ingredients in 19 different end-use pesticide products available to growers in 32 states. In order to ensure a diverse supply of end-use products this growing season, there are nine pesticide manufacturers producing 19 end-use products.”

The issue of soybean rust is high on many political agendas, and other congressional reviews of policies will follow. The House Ag Subcommittee on General Farm Commodities and Risk Management has already scheduled a May 4 hearing on the crop insurance program and the impact of Asian soybean rust.

Meanwhile, USDA reported that Asian soybean rust was found in Georiga’s southwestern most county of Seminole, near the town of Donalsonville. The infestation was found in volunteer soybeans, marking the first rust discovery outside of Florida. This season’s first confirmed findings of rust this year was on kudzu in three Florida counties ( Pasco, Hernando and Marion).

Census: March Crush 4.07 Million Tonnes

The U.S. Census reported that processors crushed 4.07 million tonnes in March, compared with 3.75 million tonnes last month and 3.53 million tonnes in March of 2004. Oil stocks were pegged at 812,000 tonnes and meal stocks at 251,744 tonnes.

China Expects “Stable” Planted Area; Rise In Demand For Beans And Products

China’s 2005 soybean acreage is expected to be “basically stable” from 2004, the Ministry of Agriculture said last week in its March soybean market monitoring report. The ministry said for the 2004-05 marketing year, which will end in August, it expects an increase in soybean supply and a steady rise in soybean demand. However, the ministry said ending stocks and the stock-consumption ratio will be at “reasonable levels,” and the soybean market will be in balance if soybean imports later this year are at “appropriate volumes.”

For soyoil and soymeal, the ministry said both supply and demand are expected to grow moderately, and ending stocks and stock-consumption ratios will remain at the relatively high levels seen in recent years since there is excess supply. The ministry did not disclose any data or methodology on which its projections are based.

Buenos Aires Cereals Exchange Predicts 38.4 Million Tonne Crop

Argentine farmers will produce 38.4 million tons of soybeans in 2004-05, according to the Buenos Aires Cereals Exchange. The “very good yields seen in first-crop beans and those we’re seeing in second-crop soy in the main soybean production zone” were the driving factors in the estimate the Exchange said. Planted area totals 14.67 million hectares, though only 14.24 million hectares will actually be collected, according to the Exchange. Last year, farmers planted 14.5 million hectares and harvested 32.2 million tonnes.

Turkey Boosts Soybean And Oilseed Meal Duties

Last week, Turkey announced new customs duties on a variety of feed ingredients including soybeans and soybean meal. Soybean duties will increase from zero to four percent during the period August 1 to December 31 2005. Soybean and other oilseed meal duties will increase from zero to four percent for EU countries, and from two to six percent for other countries during the period July 1 to December 31 2005. The rates likely were increased to improve crushing margins and reduce stocks of sunflower seeds held by Trakya Birlik, a quasi-state sunflower cooperative, according to USDA.

Soy Complex Lower On Technical Selling

The soy complex closed lower on April 28 reflecting technical selling and in spite of news that Asian rust was found in Georgia. Soybean futures reflect an unusually large risk premium relative to the old- and new-crop fundamentals due to limited farmer selling in the U.S. and South America, the influence of speculative money and the threat of soybean rust. May bean futures closed down $3.40 finishing at $227.07; July was $3.12 lower, closing at $229.74 and August lost $2.66 ending at $229.55. May meal was down $1.43, closing at $214.62; July was $1.87 lower, finishing at $213.63 and August decreased $2.09 to finish at $213.63. May oil closed $6.17 lower to finish at $490.08; July decreased $7.05, closing at $492.73; and August lost $6.39, ending at $492.73.