China Expects Soybean Imports To Increase 45%

China is expected to import a record 24.5 million tonnes of soybeans in the 2004-05, 45% higher from the 16.9 million tonnes imported in 2003-04, according to the China National Grain and Oils Information Center (CNOGIC). China is expected to import around 12 million tonnes of soybeans from the U.S., said Cao Zhi, a senior analyst at CNOGIC.

Domestic edible oil demand, expected around 18 million tonnes in the 2004-05 marketing year, is estimated to outstrip local supply by around 4 million to 5 million tonnes, which will be largely filled by crushing imported soybeans, CNOGIC said.

Domestic soymeal demand, including feed and other usage, is expected to total 21.68 million tonnes in 2004-05, compared with an estimated total production of 24.36 million tonnes during the same period, according to CNOGIC.

Paranagua Ban On GM Beans Increasingly Problematic For Traders

Traders are beginning to avoid Brazil’s Paranagua port because of its ban on genetically modified soybeans. “Paranagua is very problematic. Two out of every ten loads are being rejected, because they are contaminated,” said Parana-based trader Celso Gomes in a report published by Dow Jones.

Other locations such as the port of Sao Francisco do Sul are options, but it is already operating at close to capacity and exporters are then still forced to export from Paranagua. “It’s hard for exporters to avoid Paranagua,” said Brazilian analyst Anderson Galvao. “The port of Sao Francisco do Sul, just doesn’t have the capacity,” according to Gomes.

Likewise, exporters are even more concerned about what will happen in 2006, when even more producers are expected to begin planting GMOs, since the government legalized their production earlier this year. The port continues to ban GMO soy, despite a ruling by Brazil’s Supreme Court issued in April declaring the ban unconstitutional.

Low Margins And Lack Of Farmer Selling Lead To Low April Crush In Brazil

Brazil’s soybean crush reached 2.61 million tonnes in April, down from 2.80 million tonnes from the April 2004 level, Brazil’s Vegetable Oils Industry Association (Abiove), said last week. Low crush margins and the reluctance of farmers to sell beans at low post-harvest prices limited processing in what is usually a primary month for crushing in Brazil. On the business side, a number of major soy firms, including Archer-Daniels-Midland, Cargill Inc. and Louis Dreyfus, recently closed crushing plants in Brazil due low crush margins.

The April crush produced 2.01 million tonnes of soymeal and 499,000 tonnes of soyoil. Abiove estimates that the 2005-06 crush will reach 29.2 million tonnes, up from 28.9 million tonnes in 2004-05. Total soybean production for 2004-05 is expected to be 50.8 million tonnes, up slightly from the 50.1 million tonnes produced last year, according to Abiove. Exports coud reach 19.1 million tonnes in 2005-06 from 18.95 million tonnes last year, they said.

Manitoba Farmers Do Not Receive Soybean Planting Extension

The Manitoba Crop Insurance Corporation (MCIC) decided recently not to extend deadlines for soybean seeding. The likely result will be less area planted then in years past. The Manitoba Pulse Growers Association (MPGA) in a statement said they are disappointed with the MCIC decision, and that excessive rains over the last few weeks should lead to an extension similar to the one given last year. However, MCIC states that they are comfortable with the deadline based on past experience.

Manitoba producers previously expected to plant 85,000 hectares of soybeans in 2005. However, MPGA now believes that this level will be lower, but they will not release a new estimate until after the deadline for planting passes.

Asian Rust Not Spreading As Expected

Asian soybean rust is spreading at a much lower rate than initially expected. USDA’s Asian rust website said last week that aside from four counties in Florida where the fungus was found on common ditch weeds, “Seminole County in Georgia remains the only county (in the U.S.) with rust on soybean – and it was found on volunteer soybean plants in two locations.”

However, USDA said new computer models indicate that plant pathologists in the Southeast should continue to monitor their area for the fungus, which can quickly defoliate soybean plants and produce yield losses of 80%-90%. “Potentially by mid-June, some new infection may be expected to be observed on non-soybean plants in Florida, Georgia, Alabama and South Carolina,” said USDA.

Soy Complex Higher On Rust Concerns

July bean futures closed up $2.11 finishing at $247.37; August was $2.39 higher, closing at $248.48 and September gained $2.02 ending at $249.03. July meal was up $1.98, closing at $234.68; August was $2.20 higher, finishing at $235.23 and September increased $2.43 to finish at $235.34. July oil closed $3.31 higher to finish at $509.92; August increased $3.53, closing at $512.35; and September gained $3.53, ending at $514.77.