Transportation Update

Agriculture shipments have restarted along the lower Mississippi River, though obstacles such as lack of labor, diesel fuel, electric power and transportation remain. The Port of New Orleans terminal operators have been in touch with their workers and expect to mobilize their labor pools by the middle of this week. Port President and CEO Gary LaGrange has set a goal for the Port to work its first commercial cargo ship by September 14.

Adding to farmers’ need for access to the Port of New Orleans is the fact that ending stocks of both corn and soybeans on September 30, 2005 are forecast to be at relatively high levels. Last June, when USDA last reported the position of U.S. stocks, soybeans stored in all positions on June 1, 2005 totaled 19.1 million tonnes, up 70% from June 1, 2004. These figures indicate that both farmers and commercial elevator operators will likely want to move soybeans out of storage facilities soon in preparation to accept this year’s harvest.

Meanwhile, deep draft vessels are again navigating on the Lower Mississippi River after being restricted for nearly one week after Hurricane Katrina passed over the area. The Army Corps of Engineers and Coast Guard will allow vessels with a draft (the amount of the vessel below the waterline) of 39 feet or less to navigate from the mouth of the Mississippi River to Baton Rouge, La. (normal draft limit is 45 feet). Also, the Coast Guard will permit two-way traffic.

Restoring navigation on the river is important is essential to restart grain and soybean exports through the Center Gulf. The peak export period for the Center Gulf is about to get underway as crop harvests start in the Corn Belt. However, not all grain export elevators are operational either because of damage or because of a lack of power and employees. Most mid-stream facilities are operating, or will be soon.

The Center Gulf handles nearly 60% of all U.S. grain and soybean exports annually, about three quarters of all corn exports, and about 70% of all soybeans. Since 1995, Center Gulf grain and soybean exports averaged more than 5.17 million tonnes during September, or about 8% of annual exports through the Center Gulf. Exports through the Center Gulf during the September/November quarter represent about 28% of annual Center Gulf exports. There was no export inspections recorded for the Center Gulf for the week that ended September 1 after totaling 887,000 tonnes the previous week while averaging 816,000 tonnes the previous four weeks.

Senate Ag Committee Chairman Says Farmers To Receive Disaster Assistance

Congress will provide financial aid to farmers hit by Hurricane Katrina and other weather losses, such as drought in the Midwest, says Senate Agriculture Committee Chairman Saxby Chambliss (R-Ga.). Reuters reports that Chambliss also said he expects a delay in work on $3.1 billion in agriculture budget cuts because of the focus on mammoth hurricane damage. Chambliss said he met USDA Secretary Mike Johanns last week to discuss losses from Katrina and other causes. In the Midwest, he noted, drought “has been ongoing throughout most of the year.” He added that, “We haven’t had time to calculate what the losses are,” but with the harvest at hand, accurate figures would be available in coming weeks.

Japan Has Ample Soybean Inventories While U.S. Export Bases Are Repaired

Despite the damage caused to U.S. soybean export bases to Japan by Hurricane Katrina, the Japanese Agriculture Ministry is confident they have abundant inventories and reserves. The ministry estimates monthly shipments to Japan from New Orleans and its vicinity at 260,000 tonnes for soybeans and account 60% of soybean consumption. However, soybean inventories and reserves in Japan are equivalent to three months’ imports from New Orleans, the officials said. “No problem with supply is expected for the immediate future,” said Mineichi Iwanaga, minister of agriculture, forestry and fisheries.

Brazil Expects 51.1 Million Tonne Soybean Crop In 2004-05

Brazil’s Agriculture Ministry expects the 2004-05 soybean crop to be 51.1 million tonnes, larger than the 2003-04 record crop of 49.8 million tonnes The Ministry originally forecast a crop of more than 60 million tonnes, but the crop has been hit by the worst drought in 50 years in the south of Brazil. However, the Ministry now believes the drought damage may be less than originally thought. As a result, the forecast is higher than the 50.1 million tonnes predicted by the Brazilian Vegetable Oil Industries Association and the 50.4 million tonnes forecast by Brazilian consultants Safras e Mercado.

In spite of the drought damage, the Agriculture Ministry predicts total grain, oilseeds and cereals production will reach 113.5 million tonnes.

Brazil Approves Use Of Home-Produced GMO Seeds For 2005-06

Brazil’s government will allow farmers to use home-produced genetically-modified soybean seeds in the coming 2005-06 season (October-September), the Agriculture Ministry said last week. However, the use of GMO seeds produced on farms will be illegal during the 2006-07 season, it added. “The measure, announced by Minister Roberto Rodrigues, was taken to alleviate the problems of Rio Grande do Sul farmers,” said the statement.

Farmers in Rio Grande do Sul lost approximately 70% of their crop in 2004-05 to the worst drought in 50 years. As a result, there are insufficient seeds for the coming season. The coming year will be the first in which Brazilian farmers can use commercially produced GMO soybean seeds.

The production of soybeans seeds for home use is a traditional practice in Brazil. However, companies such as Monsanto have successfully sued a number of home-producing farmers for breaking patents over the past year. In the statement, the Agriculture Ministry acknowledged that producing seeds on the farm breaks a number of laws.

Soy Complex Lower On Increased Transportation Costs