The American Soybean Association has some concerns with the proposed Senate farm bill. ASA President John Hoffman said, “There are several areas of major concern to soybean producers that need to be reconsidered or eliminated.” Of major concern to ASA is the $3 billion baseline reduction of the commodities title of the bill, which has been put into other titles. Also the target price set for soybeans in the bill is far less than the ASA proposal of $6.85. “ASA does not believe that a $6.00 target price provides an adequate income safety net for soybean producers or a level of equity with other program crops,” Hoffman said. “We believe the soybean target price needs to be increased to a minimum of $6.30 per bushel, and we wish to work with committee members to increase the target price to this level either in mark-up or in conference.”

The proposed Average Crop Revenue (ACR) program’s recourse loan also has raised ASA concern. The ACR amendment, as modified, maintains the average crop revenue calculation from the base bill but eliminates interactions with crop insurance. It allows for a producer to get a one-time sign-up election option for average cost revenue idea in 2010, 2011 and 2012 (once in, a producer would have to continue with the program). The amendment would not update the base acreage. There would be fixed and average crop revenue insurance payments on up to 100 percent of the base acres as it relates to covered commodities and peanuts (final percentage depends on scoring from the Congressional Budget Office). It provides a payment limit of $60,000 on average crop revenue payments and the savings to go to various programs decided by the committee. The amendment would reduce the administrative and operating cost reimbursement rate (crop insurance companies) by 2 percentage points between 2009 and 2012 and would allow a snapback provision when the loss ratios for crops exceed 1.2. Hoffman said ASA wants the ACR’s recourse loan program eliminated because of the very negative precedent it would represent as an alternative to the marketing loan program.

ASA also has issues with proposed changes to loan deficiency payments, marketing loan gains, and what he termed a lack of funding for biodiesel in the energy title of the bill. Despite the ASA concerns, Hoffman said the group is committed to completion of a new farm bill this year and will work with the committee and its staff to see it enacted in a timely fashion.

NOPA’s September soybean crush of 3.8 million tonnes was above market expectations by about 54,000 to 81,600 tonnes. NOPA’s soybean oil stocks declined by 63,500 tonnes from August, but the trade was looking for a drop of roughly 122,000 tonnes.

An interesting feature of the NOPA report was the September oil yield of 11.46 pounds per bushel, which was up from 11.40 pounds in August. This supported analysts’ notions that the 2007-08 oil yield could be appreciably higher than last year’s based on the above-normal Midwest temperatures in August and September along with the relatively high oil content of soybeans exported so far this marketing year.

Additional soybean production from a larger soybean oil yield or larger crush will have little impact on soybean oil futures as they are dominantly linked to the energy markets and the need to keep biodiesel margins narrow. However, increased soybean oil production could ease the decline in soybean oil stocks or give the biodiesel industry a bit more feedstock to use.

EU blending targets for biofuels could require a doubling of oilseed imports by 2010 compared to 2006, something which may prove difficult given tough planned import standards, according to a new study by PurdueUniversity.“The mandate in the EU is very ambitious,” said Thomas Hertel, executive director at Purdue’s Center For Global Trade Analysis. Hertel presented the biofuels study at an OECD Food Economy conference in the Netherlands earlier this month.

Biofuels critics say growing crops for fuel may contribute to destruction of rainforests and raise food prices, and EU import standards to be announced in January could make the target difficult to reach.

Reuters reports that the research also shows that the EU’s demand for oilseeds was likely to be met increasingly by imports in coming years, with the value of EU oilseeds imports set to rise by more than $4 billion by 2010.

India, one of the world’s top importers of edible oils, will have to pay up to a third more for shipments of the commodity next season due to soaring global prices caused by the biofuels industry, a leading industry official told the Public Ledger. Ashok Sethia, president of the Solvent Extractors’ Association of India, said the country would have to pay 120 billion rupees ($3 billion) for imports of between 5.6 million and 5.8 million tonnes of edible and non-edible oils in the present season, which ends on October 31, up from 90 billion rupees in the previous season.

But that figure is set to jump higher in the forthcoming season if India imports the same volume of oils, Sethia told the Ledger. “Assuming we import the same quantity, we will have to shell out 160 billion rupees next year,” Sethia said, adding that figure is likely to jump again to 200 billion rupees the year after next. He claimed that the diversion of just 5 percent to 10 percent of vegetable oils for biodiesel use would further boost prices and squeeze supplies, putting pressure on importing countries such as India.

At present, India’s edible oils consumption is around 10 million tonnes annually with around half of the total coming from overseas, according to the Public Ledger report. India has attempted to tame soaring global prices in their domestic market by slashing import duties on soyoil and palm oil – the two most purchased edible oils. In July this year, the government cut customs duty on soyoil to 40 percent.

The soy complex closed higher on October 25 reflecting speculative buying amid a further decline in the US dollar and the energy markets rallying to new highs. November bean futures closed up $6.80, finishing at $365.50; January gained $6.89, closing at $372.03; and March was up $6.52, ending at $376.89. December meal increased $6.06 closing at $308.09; January was $7.16 higher, finishing at $311.29; and March meal closed up $6.94 ending at $315.81. December oil closed $9.70 higher to finish at $902.12; January was up $9.48, closing at $911.60; and March gained $9.48, closing at $922.40.

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