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2. August 2004 June Census Crush Meets Expectations U.S. oil mills crushed 2.98 million tonnes of soybeans in June, the U.S. Census Bureau reported last week, which was in-line with trade estimates. Soymeal and hull meal stocks totaled 286,000 tonnes, below trade guesses that averaged 327,000 tonnes, the Census reported. Soy oil stocks totaled 691,000 tonnes, slightly below estimates that averaged 717,000 tonnes. Census Bureau Revises Export Data The Census Bureau corrected data for U.S. soybean exports to Mexico from September 2003 through April 2004. The new estimate reduced U.S. exports by 708,000 tonnes, to 22.8 million tonnes. This compares with export shipments from USDA’s Exports Sales report of 22.9 million tonnes and export inspections of just 22 million tonnes. While export inspections are a widely followed measure of exports, they significantly understate exports largely because overland shipments to Mexico and Canada do not have to be inspected. Analysts believe USDA will reduce its 2003-04 U.S. export forecast of 24.5 million tonnes in next month’s supply/demand report. The Census export revisions do not change what soybean stocks were on December 1, March 1 or June 1, but it does increase residual use for the first 3 quarters of the 2003-04 marketing year and reduce the amount by which it appears that USDA understated the 2003 soybean crop. Farmers Worry About Possible Rail Problems The Omaha World-Herald reports that farmers and grain dealers want to know whether major railroads have fixed kinks in their systems that led to weeks of shipping delays last year. The paper points out that access to rail shipping will be a growing question as fall approaches, because record corn and soybean harvests are expected throughout the Grain Belt. One factor affecting railcar availability is the expansion of ethanol plants in states such as Nebraska, Iowa and Minnesota. Not only are more plants being developed, they are producing two or three times as much fuel, which increasingly is shipped by train. Brazil Soybean Crop Estimate Lowered The Brazilian 2003-04 soybean crop estimate has been lowered to 49.01 million tonnes from the 49.5 million tonnes due to bad weather, the Brazilian government’s statistical institute IBGE said last week. In its latest crop report IBGE said estimated production would be 4.81% below the 51.48 million tonnes harvested in 2002-03. Almost 400,000 tonnes of soy have reportedly been lost due to heavy rains in parts of Mato Grosso, Brazil’s top soy producing state. The average yield for the harvest, which ended in April, was revised down to 2.77 tonnes per hectare from 2.90 tonnes per hectare seen previously. Soy planted area was pegged 15% higher this year at 21.3 million hectares, from 18.5 million hectares last year. The new production estimate is now lower than the 50.2 million tons forecast by the Agriculture Ministry’s National Commodity Supply Corp. (Conab) last month. Brazil’s grain, oilseed and cereal crop is now expected to total 118.8 million tons this season, down from 119.6 million hectares estimated in June and lower than the 123.6 million tons produced last year. Brazilian Beans Sell At Premiums Against World Prices Brazilian soybean exports are selling at premiums against international futures prices for the first time this year following the lifting of the ban on shipments to China and a surge in demand due to lower prices, analysts said last week. Prices in Brazil have moved back in line with those offered in the United States. Brazilian soybeans had not shown a premium since December 2003, when exporters became worried that a ban on genetically modified soybeans at Paranagua, Brazil’s main grains port, would cause delays. The principle reason for the spiraling discounts is the decision by Chinese authorities to reject Brazilian soybean shipments in May and June because they contained small quantities of fungicide-tainted seed and then banned companies from shipping Brazilian beans. Meanwhile, demand from European and other importers has become more active in buying Brazilian beans. Brazil Testing For GM Beans Reuters reports that 296 soybean samples of the 7,374 taken (4 percent) from 14 states tested positive for the presence of genetically engineered material. The Brazilian Agriculture Ministry says 117 producers testing positive had not officially declared their soybeans as genetically engineered and are being investigated. Indian Edible Oil Imports Set To Rise Indian edible oil imports are seen rising by 800,000 tonnes to one million tonnes in the next year beginning in November from an estimated 4.1 million tonnes this year due to poor Monsoon rains impacting domestic oilseed output. The poor rains are expected to lower India’s oilseed production in the current winter season by at least 20% from 13.9 million tonnes in the previous year. The summer season could also drop from last year’s 9.96 million tonnes if major oilseed growing areas did not get sufficient rains in the next two months. Soy Complex Mixed On Weather Outlook The soy complex closed mixed on July 29 reflecting concerns about drier weather, which supports new-crop contracts with bear spreading and weak cash markets weighing on the front months. Weekly export sales came in at 130,100 tonnes and old crop sales showed cancellations of 37,800 tonnes. Export sales for meal were 82,400 tonnes with old crop sales at 18,900 tonnes. Soyoil export sales last week were 4,600 tonnes. August bean futures closed down $0.92, finishing at $229.46; September was $2.76 higher, closing at $216.79 and November lost $3.31 ending at $214.86. August meal was up $1.43, closing at $220.57; September was $3.75 higher, finishing at $211.86 and October increased $2.98 ending at $200.07. August oil closed $9.26 lower to finish at $503.31; September was down $2.20, closing at $496.92; and October gained $0.88, ending at $486.56.
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