Mexico Sets 2% Foreign Matter Limit For Soybean Imports

Mexico's Agriculture Ministry has implemented new regulations on soy imports to protect against Asian soybean rust fungus. According to the new regulation imports must be certified by the U.S. Federal Grain Inspection Service that the soy imports contain no more than 2% "live foreign matter" if the shipments come from U.S. states confirmed to have found the fungus. Asian soybean rust fungus recently was discovered for the first time in the United States and now has been confirmed in nine states.

The ministry said in a statement that national sanitation authorities have decided to apply strict new measures "in the face of the presence of the fungus in various countries in the Americas" to avoid the entry to Mexico of the damaging crop pest. The new regulations, which also require domestic processors to kill any possible surviving material that may carry the fungus, took effect December 1 in all shipments of soybean imported from the United States. The regulations also state that all shipments must be fumigated at origin, or at the point of entry with pesticide T302(d1) and be held in quarantine for at least 24 hours before final delivery.

Froylan Gracia, agriculture counselor at Mexico's embassy in Washington, D.C. said U.S. exports were not likely to be diminished by Mexico's actions. Gracia also said that the regulations could be changed again soon due to ongoing dialogue between the United States and Mexico.

Meanwhile, USDA said it is fighting to prevent disruptions in U.S. soybean exports after discovery of Asian rust. Outgoing USDA Secretary Ann Veneman said in the wake of Mexico's recent decision to tighten its import regulations on U.S. soybean shipments, "we are doing absolutely everything we can to make sure that soybean rust does not become a trade issue." Veneman also said USDA officials are reaching out to all trading partners.

Thailand Approves Unlimited Duty-Free Soybean Imports

The Thai cabinet approved the duty-free import of an unlimited amount of soybeans in 2005, government spokesman Jakrapob Penkhair said last week. "The cabinet agreed the zero tariff on the condition that importers must buy domestic soybeans at the fixed prices in order to protect farmers," he said. Thailand, a major chicken exporter before bird flu struck, imports more than one million tonnes of soybean per year, mostly for feed.

The government has fixed the price of domestic soymeal at a minimum of 10 baht per kg. In November, the cabinet approved a cut in soymeal import duty to 4% from last year's 5% in a bid to help reduce costs in the Thai poultry industry after it was hit hard by bird flu.

In 2002, Thailand scrapped its import quota on soybeans and has allowed an unlimited volume of imports at zero tariff since then, following complaints from local consumer trade associations that the limited soybean import quota wasn't meeting domestic needs. Thailand had limited its soybean imports to 1.5 million tonnes a year in 2001. The soybean imports fall under Thailand's commitment to the World Trade Organization to open its market to agricultural imports from WTO members. In 2005, imports from non-WTO members and imports by unauthorized importers will face a duty of 80%, an official at the Thai Commerce Ministry said.

Upper Mississippi Barge Movement Ends; Soybean Exports Up Nearly 6%

Navigation on the northern-most reaches of the Upper Mississippi River basically has come to a close for the season. While there was no ice impeding navigation, the Army Corps of Engineers will be conducting maintenance projects during the winter at its facilities. Other Locks and Dams on the Upper Mississippi River are still receiving tows and locking them through. Although, as water temperatures cool and ice forms, tow boat operators will keep tows and barges away from ice to protect their equipment.

This fall's grain barge season for Upper Mississippi River has been less than stellar with lockages down 31% from average and 19% below the year-ago level. However, in the open areas of the lower Mississippi River, grain barge movements were stronger as early harvest soybeans entered the export channels.

U.S. exports of soybeans have totaled 6.33 million tonnes and are up 5.6% or 335,000 tonnes more than one year ago. However, total grain and soybean exports through the Center Gulf since September 1 have totaled 17.6 million tonnes, a drop of 2.4% or 435,000 tonnes as compared to last year. These lower exports have pressured barge movements. Total export sales have been sluggish and face considerable competition, especially as ocean freight rates have caused buyers to look to other markets.

China's Imports Of Soybeans Seen As About 20 Million Tonnes For 2004-05

China is expected to import about 20 million tonnes of soybeans in 2004-05, according to USDA. The strong import forecast if based on continuing strong demand for soy products, especially soybean meal, in addition to a relatively low ending stock for 2003-04.

USDA reported that China's total contracts for U.S. soybeans reached 6.6 million tonnes as of November 18 for 2004-05 soybeans. This was 44% higher than the same period in previous year. Arrivals in the coming two months are expected exceed 2 million tonnes monthly, USDA said.

Soy Complex Lower Ahead Of USDA Report

The soy complex closed lower on December 9. Slow weekly sales, perceptions that the South American crop is off to a good start and expectations that USDA would report higher ending stocks in its December 10 report pressured the market.  As of December 2, total soybean commitments came to 16.6 million tonnes, which is lagging behind last year's commitments at this time of 19.3 million tonnes, according to the USDA. China's purchases for the 14^th week of the marketing year also came to a negative 10,600 tonnes, which was also not received as a positive sign for the market. Soymeal and soyoil futures both ended lower in concert with the soybean market. January bean futures closed down $1.05 finishing at $193.42; March was $1.14 lower, closing at $193.42 and May lost $1.40 ending at $194.81. December meal was down $1.65, closing at $172.84; January was $1.54 lower, finishing at $172.73 and March decreased $0.99 to finish at $173.39. December oil closed $3.53 lower to finish at $433.64; January decreased $2.43, closing at $435.85; and March lost $1.98, ending at $440.04.