USDA Outlook Projections Released

Presenters at last week’s USDA's Outlook Forum released their latest projections for 2005 prospects on the U.S. soybean crop. According to USDA, 2005 soybean planted area is likely to be 29.5 million hectares with harvested area of 29 million hectares and a national average yield of 2.512 tonnes per hectare. Combined with carryin of 12 million tonnes, 81,600 tonnes of imports and a crop of 78.1 million tonnes, total supply is seen at 90.2 million tonnes.

Crush is forecast for 2005 at 41.9 million tonnes with seed/residual use of 4.03 million tonnes. Soybean exports could reach 28.8 million tonnes. With a total use of 79 million tonnes, this would put carryover at 11.2 million tonnes.

Manitoba Processors Turn To U.S. Soybeans

A poor Manitoba soybean crop due to growing conditions last summer and fall has presented challenges to some Canadian soybean processors. Martin Harder, president and owner of Delmar Commodities Inc., said Manitoba's poor-quality crops from the 2004 soybean harvest have resulted in the need to import U.S. soybeans. "I would say that our crush right now is probably about 75% U.S. sourced soybeans and 25% local soybeans," Harder said. He said some processing plants plant have been accepting lower-quality soybeans from local Canadian producers and blending them with higher-quality soybeans from the U.S. Harder said the need to bring in U.S. soybeans probably would continue in the coming marketing year.

"Right now, we have a big concern regarding the availability of seed in the province heading into this spring," he said. The area expected to be seeded to soybeans in Manitoba in 2005 likely will be lower than the 2004 level, based on estimates provided by Agriculture and Agri-Food Canada. In its February 7 supply/demand update, the government agency estimated 2005 soybean area in Manitoba at 123,600 acres, down from the 2004 level of 210,000.

India’s Edible Oil Imports Up

Indian imports of edible oils have jumped 9% during the first quarter of the 2004-05 year (November-October), according to the Solvent Extractors' Association of India (SEA). In the period November 2004-January 2005, imports totaled 946,000 tonnes, compared to 869,000 tonnes during the same period of the 2003-04. Of the first quarter oil imports, crude oils accounted for 88% at 835,000 tonnes, while refined oil was pegged at 110,000 tonnes, or 12%. However, the imports of edible oil during January totaled 316,000 tonnes, down 10% on the 354,000 tonnes imported during January 2004, the SEA said.

Imports of palm oil products dipped by 26.8% to 560,000 tonnes during the first three months of 2004-05, compared to 765,000 tonnes during the same period of last year. In contrast, purchases of soft oils, especially soyoil, rose to 385,000 tonnes during the November-January period.

Russian Soymeal Imports Increase

Russian soymeal imports totaled 152,899 tonnes in the last quarter of 2004, half the amount imported during the whole of the 2003-04 (October-September) season, due to vigorous developments in the domestic poultry industry, according to Russian analysts. In December, Russian soymeal imports reached a monthly high of 61,921 tonnes, compared to 45,800 tonnes in November and 45,200 tonnes in October. In 2003-04, Russia purchased 304,200 tonnes of soymeal, down from 308,600 tonnes in 2002-03.

Russian poultry production growth in 2004 recovered to 15% year-on-year after slowing in 2003 to 9.5% due to a sharp increase in domestic feed grain prices. The expansion of the sector is expected to continue in 2005, keeping the demand for soymeal strong. Russia currently forecasts soymeal imports for the 2004-05 season at 450,000-500,000 tonnes.

Dry Weather Could Lead To 25% Loss of Rio Grande do Sul Crop; Rust Continues To Spread

Continued dry weather in the southern state of Rio Grande do Sul could prompt losses of over 25% to the region's soy crop, according to preliminary estimates by Gianfranco Bratta, an agronomist with Rio Grande do Sul crop agency Emater. "The soy is at a critical phases right now and needs rain. Without more rain, losses could surpass 25%," said Bratta.

Emater has lowered its productivity estimate for Rio Grande do Sul to 1,505 kg/hectare from previous estimates of 2,007 kg/hectare. Likewise, the size of the state's corn crop is likely to decline by 45%-50% due to the drought.

Meanwhile, Asian soybean rust has spread to Brazil's northeastern state of Bahia, bringing the number of states affected by the scourge to 12 plus the Federal District of Brasilia. The disease was found in a commercial field at Luis Eduardo Magalhaes in the Cerrado area of western Bahia. "Up until recently it was dry in Bahia and rust was slow to appear," Claudia Godoy, researcher at the government research agency Embrapa said.

Speaking about the southern state of Parana, Godoy said that Brazil would not be as badly affected as last year when it lost some 4.5 million tonnes or nine percent of the soybean crop due to the disease.

Soy Complex Prices Lower Despite Dry Weather In South America

The soy complex closed down on February 24 reflecting lower deferred futures. Previous day losses were recovered in overnight trade as Argentine rains were disappointing and confidence for rain in southern Brazil slipped. However, it may take significant losses to tighten the world balance sheets enough to raise concerns and prompt a significant increase in coverage from end users. The Census Crush Report showed January crush at 148.5 million bushels, which was in line with trade expectations. Oil stocks were 1.557 billion pounds, while meal stocks at mills were 338,504 tons. March bean futures closed down $2.85 finishing at $209.07; May was $3.12 lower, closing at $210.91 and July lost $3.58 ending at $211.83. March meal was down $2.54, closing at $187.61; May was $2.31 lower, finishing at $189.38 and July decreased $2.65 to finish at $191.47. March oil closed $8.82 lower to finish at $470.24; May decreased $8.16, closing at $474.87; and July lost $7.94, ending at $477.96.

****USDA failed to release updated Export data on Friday, February 25. The export data will be updated for next week’s issue.****