As was expected, USDA made very few changes in its U.S. balance sheet forecasts for soybeans last week. USDA still pegs U.S. planted area at 30.6 million hectares of soybeans in 2006-07, with production expected to reach 86.8 million tonnes. Yield also remained unchanged by USDA at 2.87 tonnes per hectare. Of the notable changes there is a 109,000 tonne shift from seed use to residual use for 2006-07 soybeans. USDA also revised its 2006-07 U.S. soybean oil balance estimates by cutting soybean oil imports by 11,300 tonnes to 13,600 tonnes and adding it to ending stocks that now stand at 1.21 million tonnes. U.S. soybean ending stocks for 2006-07 are projected at a record 16.2 million tonnes, up 33 percent from 2005-06. Crush and exports are unchanged from the previous USDA estimates. Soybean meal supply and demand are unchanged this month.

Global oilseed production for 2006-07 is projected at 399.1 million tonnes, according to USDA. Foreign production accounts for all of the change. Increases for soybeans, rapeseed, peanuts, and copra are partly offset by a small reduction for sunflowerseed. Global soybean production in 2006-07 is projected by USDA to be a record 229.4 million tonnes. Brazil production is now expected to produce a record 57 million tonne soybean crop. Growing conditions have been exceptionally good this season, especially in the southern states, which were affected by drought during each of the past three seasons, USDA said.

Soybean industry groups from Iowa, Nebraska, South Dakota, North Dakota, Minnesota, Illinois and Indiana have launched Soy Transportation Coalition to fight for lower railroad shipping rates. The federal governments Government Accountability Office (GAO) reported last summer that the benefits of deregulating the railroad industry, brought about by the Staggers Act of 1980, were not distributed equally among commodity groups. While railroads reduced rates for coal shipments by 35 percent, rates charged for grain went up 9 percent, GAO reported. The cost of shipping soybeans from the Midwest to coastal ports is about $1 to $2 per bushel.

Railroads point out that shipping rates have dropped dramatically under the Staggers Act, especially when adjusted for inflation. "Overall, rates have gone down for just about every commodity group," said Tom White of the Association of American Railroads. The rates (per ton-mile) for grain are second-lowest of any commodity, trailing only coal, White said.

The new Soy Transportation Coalition is funded from state check-off organizations and currently shares an office with the Iowa Soybean Association in Des Moines. Eventually, the Soy Transportation Coalition hopes to join with other interested agriculture groups and other rail shippers to broaden the industry's ability to make changes.

"We will attempt to find areas of common interest with the major railroads," according to Kirk Leeds, chief executive officer of the Iowa Soybean Association. For example, Leeds said, grain shippers could support the railroad industry in attempts to get government funding for infrastructure improvements.

Bloomberg News reports that a group of shipping lines says it plans to increase rates for moving grain, soybeans and other agricultural products to Asia from the United States in order to recover higher costs. Rates for moving a 40-foot container will increase by $100 and fees for a 20-foot standard box by $80, said the 10-member group, forming the so-called Westbound Transpacific Stabilization Agreement. The increase will take effect April 1, the group said, without disclosing the actual fees.

Hyundai Merchant Marine Co., Japan's Nippon Yusen K.K. and other shipping lines have reported profit declines last year because of increased costs from higher oil prices, inland transportation fees and lower rates on more supply of vessels. "The increases are needed to address ongoing higher cargo handling, equipment and other operating costs in the trans-Pacific market," the group said in the statement.

Soymeal demand from the aquaculture sector will continue to grow, fuelled in a large part by the growth of fish farming in China, said Terry Ecker, marketing chairman of the United Soybean Board. According to Ecker said: "The soybean check-off recognized the bright future of aquaculture and has gotten in on the ground floor with our investment in new technologies to increase soy inclusion in fish diets."

The search for ways to develop greater soymeal inclusion in fish feed was spurred last year by surging prices of fishmeal, the favored high protein ingredient for fish feed. Soy-based diets for some varieties of marine fish have been developed and are being applied in several projects in the Philippines, Vietnam and China. Researchers are currently trying to develop methods of increasing soy inclusion in diets of marine fish such as salmon, pompano, amberjack, Mediterranean sea bass, sea bream and cobia as well marine shrimps.

The U.S. Census Bureau reported that biodiesel production in January 2007 was 90,167 tonnes. In December 2006, 69,916 tonnes of biodiesel were produced. However, the January figure includes all fats and oils consumed for biodiesel production. The December figure included only once-refined soyoil and these figures are thus not comparable. Biodiesel production from virgin soyoil in calendar year 2006 was 712,777 tonnes.

The soy complex was down significantly on March 1 reflecting heavy speculative selling and the outlook for higher supply ahead. Strength in corn is the primary reason for the soybean market rally of the recent past and a shift in focus to the old crop soybean supply/demand numbers, the South American harvest, the overbought technical condition and large deliveries are factors that could drive the market lower. March bean futures closed down $9.92 finishing at $274.20; May was $9.37 lower, closing at $279.88; and July lost $9.65 ending at $285.22. March meal was down $5.07 closing at $242.29; May was $5.62 lower, finishing at $248.68; and July decreased $9.65 to finish at $254.08. March oil closed $15.87 lower to finish at $651.02; May was down $16.53, closing at $661.60; and July lost $14.77, ending at $671.96.

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