Planted Area Down Slightly

Soybean producers intend to plant 29.9 million hectares in 2005, down 2 percent from last year’s record high acreage, USDA said last week. Of the 31 soybean producing States, growers in 16 States intend to plant fewer acres this year, while producers in 11 States intend to plant more acres than in 2004, USDA said. The largest acreage declines are in the Dakotas, where low soybean prices have some farmers shifting to other crops. Large declines in soybean acreage are also expected in the Delta and Southeast States, according to USDA.

Soybeans stored in all positions on March 1, 2005 totaled 37.6 million tonnes. Soybean stocks stored on farms are estimated at 21.6 million tonnes, up 123 percent from a year ago. Off-farm stocks, at 15.9 million tonnes, are up 7 percent from last March. Indicated disappearance for the December 2004 - February 2005 quarter totaled 25.1 million tonnes, up 18 percent from the same period a year earlier, USDA said.

Asian Rust Not As Much A Concern As Previously Thought; Crop Insurance Doesn’t Guarantee Rust Coverage

Due to the discovery of Asian soybean rust in the United States, USDA asked farmers in soybean producing States about their awareness of the disease and how it has affected their planting decisions. Only 11% of farmers told USDA that rust was a factor in their planting decision, with most of the concern in the South. That is 2,430-2,830 hectares above most expectations and neatly offsets the stocks loss for the 2005-06 season. And, many observers will “add” acres to this result with the view that higher soy-to-corn price ratio since the early part of the survey period will buy more soybean acres.

In related news, USDA warned farmers who have federal crop insurance policies that they won’t be able to collect for damage from Asian soybean rust if they don’t take the necessary precautions to fight the fungus. USDA Risk Management Agency Administrator Ross J. Davidson said in a statement, “While the disease is an insured peril under the Federal crop insurance program, damage due to the insufficient or improper application of available disease control measures is not.”

RMA also told farmers that neither ignorance nor lack of funds to buy fungicides will be valid excuses for failure to “use good farming practices” when it comes to dealing with Asian soybean rust.

Brazilian Researcher Shares Knowledge Asia Rust

If you can see soybean rust, you might be too late, according to Ricardo Balardin, a soybean disease expert at Brazil’s University of Sainta Maria. Speaking recently at several meetings across the western Corn Belt, Balardin stressed that prevention is the best method for tackling soybean rust and that how fungicides are sprayed is just as important as making the spray. “For two years, we made an almost $3 billion mistake in South America because sprays were being applied, but not reaching the lower canopy,” he says.

Bush Administration Outlines Benefits of CAFTA

With congressional hearings on the proposed Central American Free Trade Agreement scheduled to get underway April 6, the Bush administration’s top agricultural trade officials last week outlined their arguments in favor of quick approval of the FTA. A key point that U.S. farmers and ranchers need to keep in mind, the officials indicated, is that the current agricultural trade relationship between the United States and the six other countries included in the agreement is substantially skewed in favor of the six.

CAFTA nations ( Costa Rica, El Salvador, Dominican Republic, Guatemala, Honduras and Nicaragua) currently are able to export 99 percent of their agricultural products to the United States duty-free, said Agriculture Secretary Mike Johanns during a news briefing for reporters. However, U.S. farmers and ranchers don’t have the same access to CAFTA markets. For example, he said, CAFTA-nation soybean duties are as high as 20 percent depending upon the country. Under terms of CAFTA, tariffs would be phased out, with some of the phase-outs occurring immediately upon signing the agreement, Johanns said.

Recent Rains Come To Late For Southern Brazil’s Crop

Rain for the drought-stricken soybean producing states of southern Brazil came too late to revive the crop, private meteorologist Somar said last week. Analysts also said the rains may disrupt harvesting, especially in the centre-west of the country. “In the coming days another cold front will reach south Brazil. It will be stronger and will bring rain to more areas in Rio Grande do Sul, Santa Catarina and Parana,” Somar said, adding that rains are expected to continue in the south into next week.

Drought started in Brazil’s southern states in December and remained through the first half of March, the period of crop development when plants flower, form pods and beans. Rio Grande do Sul, which is worst hit by drought, is expected to lose 70% of its soybean crop

Chinese Exchange Adjusts GMO Contract And Increases Delivery Warehouse Space

The Dalian Commodity Exchange plans to increase the number of delivery warehouses and modify the terms for its genetically modified soybean futures contracts to boost the contract’s popularity, exchange officials said last week. GMO soybean futures, dubbed soybean No. 2, have barely been traded since their launch, contrary to high hopes earlier. Analysts said trading in soybean No. 2 has been impeded by poor contract design, trading restrictions such as complicated regulations over GMO soybeans and limited availability of delivery warehouses.

Exchange officials said they have applied to set up more delivery warehouses in other cities along the Bohai coast, as well as in eastern and southern China. In addition, they will modify the contract’s terms in accordance with typical soybean import contracts and satisfy crushers’ requirements of soybean quality.

Soy Complex Lower On Long Liquidation Selling

The soy complex closed lower on March 31 as heavy long liquidation selling helped to pressure the market. The USDA acreage and stocks reports were considered bullish enough to keep funds active and as resistance levels were violated, more money flowed into the grain markets. May bean futures closed down $4.96 finishing at $230.56; July was $3.67 lower, closing at $233.69 and August lost $4.87 ending at $231.30. May meal was down $5.51, closing at $206.13; July was $3.97 lower, finishing at $208.11 and August decreased $3.75 to finish at $208.33. May oil closed $12.79 lower to finish at $504.85; July decreased $12.79, closing at $507.72; and August lost $11.90, ending at $504.85.