Asian soybean rust was discovered last week as far north as central Iowa and southern Illinois and Missouri, but the crop’s maturity is past the point of being vulnerable to yield loss from the fungus. Several cases of soybean rust have been found in the Southern Plains and the Southeast this summer, but this week marked the first confirmation of rust in the Corn Belt this year.

News of the discovery had little market impact, but is a reminder that the disease is capable of reaching the heart of the U.S. soybean production area. However, significant yield impacts are not being reported even in the southern growing areas where soybean rust has been found at a time that the crop is susceptible to yield losses. Soybean producers appear to be doing a good job of managing rust with the help of monitoring systems that keep them informed of where rust has been found and when an extra fungicide application may be necessary. Unlike Brazil, but similar to Argentina, Asian soybean rust has not had a material impact on U.S. soybean yields since it was first discovered in the U.S. in the fall of 2004.

The Census fats and oils report revised higher August soybean oil stocks by 13,600 tonnes to 1.38 million tonnes and revised higher July soybean oil stocks by 9,070 tonnes to 1.46 million tonnes. While soybean oil domestic disappearance was lower than expected, soybean oil used in biodiesel production increased from 158,000 tonnes in July to 171,000 tonnes in August. This implies disappointing non-biodiesel domestic disappearance of soybean oil during August that was 11 percent below last year and 12 percent below the 5-year average. Disappointing non-biodiesel domestic disappearance in recent months could reflect the depletion of stocks stored in locations that Census did not pick up when stocks were accumulating to record levels. It looks like soybean oil usage in biodiesel production during 2006-07 will be 1.33 million tonnes or possibly more.

USDA’s latest crop condition ratings for soybeans improved to the highest level since late July as soybean harvest reached 29 percent complete on October 2, ahead of last year’s 18 percent and the 5-year average of 24 percent. Improvement in those condition ratings at harvest usually is associated with increases in USDA’s yield forecasts. The improvement so far this month in USDA’s soybean condition ratings suggests a 1.5-bushels-per-acre increase in USDA’s yield in the October crop report from the September yield of 41.4 bushels.

The lengthy regulatory process to import soyoil into India will no longer be required after the Indian government permitted processed food containing genetically modified (GM) organisms, and exempted it from regulatory approval. The Ministry for Environment and Forests has issued a notification that gives exemption to foodstuffs whose end products are not living modified organisms, i.e. living organisms that can be used to propagate or reproduce, as in seeds.

The notification has tremendous implications for the food processing industry which uses ingredients and additives made of GM soybeans. Until now, producers and importers had to go through the Genetic Engineering Approval Committee (GEAC), the apex body for clearing all GM organisms.

The notification marks a major shift in the way GM organisms are regulated in India after being first introduced in the form of Bt cotton in 2002. All this time, an importer of crude soyoil was required to submit a series of analytical reports from government approved laboratories. Now the importer will not have to go to the labs at all.

Argentine soybean and soymeal export commitments have soared over the past weeks as high prices and speculation that the government is considering raising the export tax on soy products pushed companies to lock in shipments. Exporters must make a sworn declaration to the government of an export sale before shipping the goods. A reference price for tax purposes and the applicable tax rate are locked in once the company declares a shipment.Meanwhile, the pace of export declarations has increased dramatically over the past week as speculation over the export taxes has heated up.

While there has been no official word from the government regarding an increase in the export tax, local press reports were fueling speculation, according to Alberto Rodriguez, the director of economic research at the Argentine Oil Industry Chamber.

Despite rising bean and meal export commitments, 2008 Argentine soyoil export declarations were down on the year, at 555,600 tonnes compared with 714,562 tonnes on the same date last year, according to Argentina’s federal government.

The Crop Supply Department of Brazil’s Ministry of Agriculture (CONAB) issued its first report of the 2008 harvest. CONAB placed soybean planting intentions between 21.2 and 21.9 million hectares, which is a 2 to 6 percent increase from its estimate of last season’s area of 20.7 million. To compare, USDA has estimated upcoming season’s area at 21.5 million hectares, up 4 percent from last season.

CONAB put a production range for the upcoming soybean harvest at 59.4 to 61.2 million tonnes, which would be 960,000 to 2.4 million tonnes larger than its estimate of last season’s production of 58.4 million tonnes. CONAB is assuming a 2.81-tonne-per-hectare yield for the upcoming season, which is 200 kilos or about 3 bushels above its yield forecast assumed for last season in its October report.

The soy complex mostly higher on October 4, as it recovered from sharp losses earlier in the week despite declines in the corn and wheat markets.November bean futures closed up $1.19, finishing at $350.62; January gained $1.01, closing at $357.24; and March was up $1.10, ending at $361.65. October meal decreased $0.44 closing at $292.88; December was $1.10 lower, finishing at $298.50; and January meal closed down $0.55 ending at $301.48. October oil closed $9.70 higher to finish at $849.87; December was up $10.58, closing at $863.76; and January gained $9.92, closing at $874.34.

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