Researchers Zeroing In On Asian Soybean Rust

The Des Moines Register reports that researchers have developed ways to predict the timing and location of the next outbreak of Asian soybean rust. Research scientists at Iowa State University in Ames and St. Louis University in St. Louis jointly developed one soybean rust forecasting system. Next year, the team will try to predict the paths of the disease in the United States. At this point, no one knows how widespread soybean rust will be, but agronomists are warning farmers to be ready.

Crop specialists say that combating the disease will require close surveillance of soybean fields and prompt treatment of infested fields with fungicide. The key to winning the battle will be preparation. Based on weather-prediction tools, the new forecasting technology is intended to alert farmers to the possibility that the disease may be moving their way.

Army Corps Moving Ahead on River Projects

The Army’s chief of engineers has approved and forwarded to the Secretary of the Army a report that offers a framework for ecosystem restoration and navigation improvements on the Upper Mississippi River and Illinois Waterway. The recommended plan includes a program to achieve the dual purposes of ecosystem restoration and navigation improvements. Its first costs are the $5.7 billion framework for ecosystem restoration and $2.6 billion for the navigation efficiency improvements. These include: 1) an initial 15-year increment of ecosystem restoration at an estimated cost of $1.58 billion; 2) immediate implementation of non-structural and small-scale structural navigation measures, together with monitoring and reporting of traffic and economic conditions at an estimated cost of $235 million; and 3) pre-construction engineering and design of seven new locks, with initiation of construction subject to congressional review, at an estimated cost $1.79 billion.

Chinese GM Soybean Futures Debut

China’s first contract for genetically modified (GM) soybeans staged a weak debut on Wednesday, but it offers crushers in the world’s top soy importer a much needed hedging instrument in the long term. “They say it will become the trading contract for imports,” said You Long, deputy general manager of Chinese trading giant COFCO. “But in the short term, we see it more as a domestic contract, allowing people to arbitrage between grades of beans.”

The GM contract is known as the “No. 2 contract”, to distinguish it from trade in non-GM beans. Most of the soy imported by China in the first 11 months of this year was GM. But the existing Dalian No. 1 soybean contract specifically excludes GM soy, thereby limiting importers’ ability to hedge through that contract. Only 3 Chinese companies are allowed to trade Chicago futures, leaving other local crushers exposed to global price fluctuations. According to Dalian Exchange spokesperson, Wag Weiyun, the No. 2 contract could become the major soybean contract on the exchange.

Value Of Brazil’s Exports Likely Lower In 2005

Lower international soy prices will reduce the value of Brazil’s agricultural exports in 2005, according to Brazil’s Agriculture and Ranching Confederation (CNA). Brazilian farm exports are forecast to earn $3 billion less in 2005 that this year. Farm related exports should bring in $38 billion in trade revenues in 2004, $10 billion of which should be from soybeans and soy products. Next year soy related revenues should fall to $9 billion, the CNA said in its year-end report.

Meanwhile, The Brazilian Crop Research Agency (Embrapa) reported last week that the number of positive cases of Asian soybean rust jumped to 81 from 51 in the last six days. Embrapa said that the fungus was found on test farms in the Federal district, as well as in the producing regions of Rio Grande do Sul, Minais Gerais, Mato Grosso do Sul, Parana, Mato Grosso, Sao Paulo, and Maranhao.

The number of commercial areas that have registered outbreaks of the disease rose to 27, the agency said. “It is important that producers intensify the monitoring of their areas and remain attentive to new information over rust outbreaks,” Embrapa researcher Ademir Henning said. Last year rust was responsible for production losses of over 4.5 million tonnes.

Brazil’s Senate Approves Planting And Sale Of GM Soybeans

Brazil’s Senate approved a government decision to allow the planting and sale of genetically modified soybeans of the 2004-05 season (October-September). The ratification of a government decree released in November allows farmers to continue planting GMOs, which were ruled legal for the first time in 2003. The text must now be signed by President Luiz Inacio Lula da Silva. Under the rules, farmers must sign a code of conduct before planting and is only allowed to use GMO seeds produced on their own farm. GMOs account for up to a third of the country’s crop.

The Senate approved changes in the decree made by the lower house, including a demand that soybean seed firms must produce an invoice of sale to charge royalties from producers. In effect, this makes it impossible for U.S. seed maker Monsanto to charge royalties on its Roundup Ready soybeans as their commercial sale remains illegal. The government hopes the decree is a temporary measure that will be superceded by the a biosecurity bill that will regulate GMOs and other crop technologies. However, the biosecurity bill has been stuck in the lower house for some months.

Soy Complex Higher On Exports

The soy complex closed higher on December 23 reflecting stronger than expected export news along with slow volume. However, weather looks to be a bearish force this coming week, as crop conditions seem to be improving in Brazil. Weekly export sales came in at 1.157 million tonnes as compared with trade expectations at 750,000-950,000 tonnes and 241,100 tonnes necessary each week to reach the USDA projection. Cumulative sales have reached 67.7% of the USDA forecast for the season as compared with 68.4% on average for this time of the year.

January bean futures closed up $1.52 finishing at $202.24; March was $1.19 higher, closing at $201.43 and May gained $1.18 ending at $203.26. January meal was up $2.65, closing at $177.91; March was $2.31 higher, finishing at $178.24 and May increased $1.98 to finish at $180.23. January oil closed $2.65 higher to finish at $463.41; March increased $2.43, closing at $465.39; and May gained $2.20, ending at $467.38.