U.S. soybean production could reach 86.77 million tonnes in 2006-07, according to the latest USDA S&D report. U.S. soybean exports for 2006-07 are projected at 29.9 million tonnes, a record high. However, this estimate is lower than the last USDA forecast because of increased South America supply prospects and reduced global import demand. Projected ending stocks for 2006-07 are expected to be a record 16.2 million tonnes.

Global oilseed production for 2006-07 is projected at 397.2 million tonnes, USDA said. Global soybean production is projected at a record 228.4 million tonnes. Global oilseed stocks are projected at a record 63.8 million tonnes. Brazil’s soybean crop could reach 56 million tonnes in 2006-07, USDA said. Argentina is expected to produce a 44 million tonne crop in 2006-07 based on slightly higher harvested area and improved yield prospects, according to USDA. Yields in Argentina are projected at 2.79 tonnes per hectare, just below the record set in 2003.

The Census Bureau reported that the use of refined soybean oil in methyl esters (biodiesel) production rebounded in December to 69,900 tonnes from November’s 62,600 tonnes that was revised lower by 5,440 tonnes. This is the first monthly increase since Augusts’ peak of 95,700 tonnes. However, biodiesel margins remain poor despite an increase in petroleum prices as soyoil prices also increase.

The Associated Press reports that the Bush administration wants to impose a new user fee on commercial barges to help pay for the soaring cost of maintaining the nation’s river channels. Barge operators say they already pay steep taxes to keep the Mississippi River and other waterways navigable.

Barge operators now pay a tax of 20 cents per gallon on diesel fuel, with the money going into a waterway trust fund. Half the cost of replacing and repairing the nation’s massive system of locks and dams comes from that trust fund, while the other half comes from the Corps’ general revenue. The proposal, included in President Bush’s $2.9 trillion budget proposal, does not specify how fees would be assessed.

USDA is looking into whether it will allow farmers an early release from the land-idling conservation reserve program (CRP) to increase production area, Agriculture Secretary Mike Johanns said last week. Dow Jones Newswires reports that Johanns told members of the Senate Agriculture Committee, “We should have a decision by early summer.” He added that USDA would gain a better idea of 2007 corn planted area in the next 60-90 days.If some acreage is allowed out of the CRP, it wouldn’t go into production until 2008, Johanns said.

Brazil’s Institute of Geography and Statistics (IBGE) last week forecast soybean production in 2006-07 at 56.4 million tonnes, up 1.5 million tonnes from its early January forecast. The Brazilian Ministry of Agriculture’s crop supply department (CONAB) forecast soybean production at 56.3 million tonnes, up 1.4 million from its previous forecast, also issued in early January. Despite the 2 agencies having similar forecasts for this season, they differ on last season’s production by 1.2 million tonnes with CONAB having the greater of the 2 estimates for last season of 53.4 million tonnes. IBGE estimates last season’s soybean production at 52.2 million tonnes.

In related news, the Brazilian Vegetable Oils Industry Association (Abiove) last week estimated the 2007-08 soy crush to be 28.8 million tonnes. Abiove also raised its expectations for the 2006-07 soybean crop to 57.1 million tonnes.

Abiove expects 2006-07 soymeal production to be 22.2 million tonnes with local consumption for 2007-08 pegged at 10 million. Soyoil production estimates were increased slightly to 5.45 million tonnes, possibly reflecting both demand for biodiesel and higher household incomes.

Abiove forecast Brazil’s soybean exports to reach 25.5 million ton in 2007-08. Brazil exported 24.7 million tonnes in market year 2006-07 and 29.7 million tonnes in market year 2005-06. Soymeal exports are likely to be 12.3 million tonnes and soyoil exports could reach 1.9 million tonnes.

Argentina’s 2006 soybean crush totaled 32.7 million tonnes, up 14.1% from the 28.7 million tonnes crushed in 2005, according to a report from the Agriculture Secretariat.Argentina produced 6.2 million tonnes of soyoil in 2006, up 14.2% from the 5.4 million tonnes produced a year earlier. Soymeal output in 2006 totaled 25.5 million tonnes, up 13.2% from the 22.5 million tonnes produced in 2005.

Analysts expect crush to keep rising over the next couple of years as soybean production rises and crushers boost processing capacity to accompany the bigger harvests. Argentina likely will produce 43 million tonnes of soybeans from the 2006-07 crop, according to the Secretariat.

The Argentine government has forced out Agricultural Secretary Miguel Campos in favor of a ranch leader amid tense talks with farm groups upset with government price controls and export taxes. Campos tendered his resignation February 6 and was replaced by his former undersecretary, Javier de Urquiza, a rancher from President Nestor Kirchner’s home province of Santa Cruz.Farmers protested across the country last week against a 4% increase in the soy export tax and have threatened to strike if their complaints are not addressed. Farmers went on strike twice in 2006 to protest government meddling in agriculture markets.

The soy complex closed up on February 8 reflecting surge in corn prices, stronger-than-expected export sales and expectations that USDA would lower its U.S. soybean carryout.March bean futures closed up $1.01 finishing at $273.28; May was $1.10 higher, closing at $279.34; and July gained $1.19 ending at $284.30. March meal was up $1.76 closing at $237.33; May was $1.54 higher, finishing at $242.40; and July increased $1.65 to finish at $247.03. March oil closed unchanged to finish at $670.86; May was up $0.66, closing at $682.32; and July gained $0.66, ending at $691.36.

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