ASA Partners To Launch Rust Advisory Program; Crop Insurance Questions Linger

The American Soybean Association and Doane Agricultural Services Co. have launched the Soybean Rust Advisory Program, a free online resource with advice about the prevention and treatment of rust, according to a news release. The Web site, www.SoyRAP.com, utilizes a nationwide network of crop consultants to monitor the progression of confirmed soybean rust outbreaks in the U.S. and provide growers with fungicide application recommendations based on regional analysis, the release said. Government and industry news stories regarding soybean rust and links to state soybean rust resources will be available, and Doane’s chief economist will provide information about the rust’s impact on soybean markets.

In related news, the federal government says there will not be enough fungicides if there is a serious outbreak of the damaging soybean rust blight this growing season. The Government Accountability Office (GAO) has assessed preparations by the USDA in 31 individual states to fight soybean rust. “The states generally responded positively when discussing efforts to educate growers and others on ASR,” Robert Robinson, GAO Managing Director of Natural Resources and Environment said. “However, some of the states reported that their diagnostic laboratories may have insufficient funding and/or staff to test suspected samples for [rust]. In addition, most states indicated that they were either uncertain or did not believe they would have enough equipment available to apply fungicides to treat the disease.”

The disease was discovered in eight southern states last autumn and so far this year has been found in Florida and Georgia. Some experts are worried that the rust could spread into the big soy growing states of Iowa and Illinois. Farm groups have also expressed concerns that fungicide supplies may not be enough to cope with demand in the event of an outbreak of soy rust. But makers such as Dow Chemical and others have repeatedly said supplies will be adequate this year.

GAO says there also is uncertainty about crop insurance coverage, even though USDA’s Risk Management Agency recently developed additional guidance on the actions growers must take to ensure that any losses due to rust are covered under their insurance policies. “Growers have expressed concerns about what they need to do to demonstrate good farming practices in treating ASR and the documentation they must provide to demonstrate that they followed such practices,” said Robinson. “Although USDA’s framework is generally comprehensive, more information is needed regarding how it will be implemented.”

Some state farm groups are providing guidance to producers with regard to crop insurance questions. For example, the Nebraska Farm Bureau (NFB) developed a detailed form farmers can use to document steps taken to be aware of the spread of soybean rust disease, field scouting, and preventative measures. According to the NFB, while the disease is an insured peril under the Federal Crop Insurance program, damage due to insufficient or improper application of available disease control measures is not covered. Also, failure to purchase and apply adequate control measures because of economic reasons is not an insurable cause of loss, NFB said.

Buenos Aires Cereals Exchange Expects Record Argentine Production

Argentina could produce a record 38.85 million tonnes of soybean in 2004-05 soybeans, the Buenos Aires Cereals Exchange said last week. That would put production up almost 21% from 32.2 million tonnes a year ago, according to the Exchange. An average yield of 2.72 tonnes/hectare is expected. The yield forecast is higher than previous estimates, especially those on second-crop beans, and is the main driver behind the expected record production. Planted area totals 14.67 million hectares, though just 14.28 million hectares will be collected. Last year farmers planted 14.5 million hectares. USDA, which sees the average yield this year at 2.76 tonnes/hectare, estimates Argentina’s 2004-05 soybean output at 39 million tonnes. The Secretariat has forecast production at 38 million tons.

In related news, the Agriculture Secretariat reported that Argentine crushers processed 8.62 million tonnes of oilseeds in the first quarter of 2005, an increase of 15% on the 7.51 million tonnes processed in the same period last year. Of this total, soy accounted for 5.71 million tonnes, up 17% over the same period in 2004. Soyoil production reached 1,094,000 tonnes in the first quarter – a 16% year-on-year increase.

In terms of exports, shipments of soyoil reached 976,557 tonnes in January-March 2005 a 9% year-on-year increase. However, lower world prices caused the value of shipments to fall over the two periods to $459,522 – down 14% on last year.

Brazil’s Deforestation Criticized

Brazil’s farm sector is once again facing criticism from environmental groups, after the government announced last week that deforestation rates in the Amazon region rose sharply last year. The latest satellite data from Brazil’s Space Research Institute (INPE) showed that between August 2003 and August 2004 a total of 26,130 square kilometers of forest was destroyed in Amazonia. The figure is the second highest on record, and 6% higher than the area deforested in the previous 12 month period.

Almost half of the total area cleared of forest was in Mato Grosso, where deforestation rates rose by 20% to 12,586 square kilometers in 2003-04, up from 10,458 square kilometers the previous year. The state is governed by Blairo Maggi, whose Maggi Group farming business is the world’s largest soybean producer.

Environmental organization Greenpeace refers to Maggi as ‘the king of deforestation’, but also blames Brazilian president Luiz Inacio Lula da Silva for failing to take effective action to protect the rainforest. “Lula’s administration is facing a fundamental contradiction: fight Amazon deforestation or promote the expansion of agribusiness to pay the Brazilian external debt,” said Paulo Adario, Greenpeace’s Amazon campaign coordinator.

Soy Complex Higher On Fund Buying And Rain Forecast

The soy complex closed higher on May 26 reflecting continued fund buying amid uncertainty about the possibility of rain in the Midwest over the next 6-10 days. Apart from weather, export sales were good, but the Census crush was not as large as expected because of a smaller crush by non-NOPA plants. Soybean oil stocks did not increase as expected and soybean meal domestic usage for April was not as robust as previously thought. July bean futures closed up $3.49 finishing at $248.38; August was $3.95 higher, closing at $248.66 and September gained $3.67 ending at $247.83. July meal was up $2.87, closing at $231.81; August was $3.75 higher, finishing at $231.92 and September increased $3.86 to finish at $231.48. July oil closed $11.68 higher to finish at $524.25; August increased $10.80, closing at $525.14; and September gained $9.70, ending at $526.46.