USDA released its April 2007 update of 2006-07 world and U.S. crop supply, demand, and price estimates last week. These updates incorporated the impact of the recent March grain stocks report. However, USDA does not report on 2007-2008 crop supply and demand prospects until its May WASDE update, so the reports did not reflect any shifts in 2007 planting intentions.

Soybean stocks for 2006-07 were raised to 16.7 million tonnes from 16.2 million tonnes in March and 12.2 million tonnes last year as crush and export demand were both reduced. Oil stocks were raised to 1.27 million tonnes from 1.21 million tonnes on slower domestic off take while the reduced bean crush lowered production. Meal domestic demand and exports were both cut from March estimates. Brazil’s soybean output was raised to 58.8 million tonnes, while Argentina was placed at 45.5 million tonnes.Brazil’s 2005 production was raised to 57 million tonnes as use data was reviewed. Global oilseed stocks were raised again.

A new study that claims soy protein can help keep the heart healthy has received support from U.S. and Japanese health officials. Research from two U.S. universities and Japan’s National Institute of Health and Nutrition confirmed findings on the health benefits of soy from the Food and Drug Administration (FDA).

According to the FDA study, soy protein was shown to lower LDL (bad) cholesterol in the blood by up to 14%. A study from HarvardUniversity’s Dr. Walter Willett, which appeared in the March edition of the American Journal of Clinical Nutrition, backed the FDA’s findings.

Findings from the Japanese researchers, as well as a second study from Dr. Alice Lichtenstein of TuftsUniversity, appear in the April edition of the same journal and also support the FDA’s claims.

Francene Steinberg, from the University of California at Davis, said: “The cholesterol-lowering effect of soy is directly related to soy protein and other soy components, and not only to its low saturated fat content.” Steinberg, who also contributed to the April edition of the American Journal of Clinical Nutrition, added: “The science has not explained the exact mechanism by which soy improves cholesterol, but there is a clear benefit of including soy protein in a healthy diet.”

China may be looking to import larger amounts of soyoil as supplies of palm oil become increasingly scarce and the UnitedState may benefit the most from the situation. Palm oil, which accounts for the majority of the China’s edible oil imports, is in greater demand for biodiesel use resulting in smaller supplies being available for food consumption. The decline in stockpiles of palm oil in Malaysia, which supplies around 67% of China’s palm oil imports, could also see a rise in their demand for soyoil as well.

Argentina remains the biggest supplier of soyoil to China. However, the U.S. is benefiting most from the rise in demand by exporting 30,337 tonnes of soyoil to China from January to February 2007. This means the United States has overtaken Brazil as the second biggest supplier of soyoil to China.

Argentina shipped 228,530 tonnes of soyoil in January, down 51% from 463,203 tonnes shipped a year earlier, according to the latest Agriculture Secretariat data. Argentina’s January soybean exports totaled just 6,067 tonnes, down sharply compared to 701,550 tonnes shipped in January 2006.

Seeking to increase the likelihood that Congress will accept unchanged many of its detailed farm proposals, the Bush administration is in the process of translating those proposals into specific legislative language, according to Agriculture Secretary Mike Johanns. Speaking last week at Informa Economics’ annual farm policy conference, Johanns said the initial batch of legislative language would be released within the next couple of weeks and likely would cover three or four farm bill titles.

Johanns said he expects the entire process to be completed in roughly 30 to 45 days, but USDA will release it section by section as work is completed. The first release of a section, perhaps the conservation title of the proposal, should be released in a couple of weeks, he said. The rural development title is also expected to be one of the earlier sections completed, Johanns predicted. By mid-May, all sections of the bill should be available.

Farm bill analysts note that this is the first time in more than 20 years that an administration has provided Congress with specific farm bill legislative language.

The soy complex was lower on April 12. Slow export sales news, fears of increased competition from the bumper crops in South America and weakness in corn helped drive May soybeans to the lowest level since February 2nd early in the session. Ideas that Argentina harvest will pick up steam into this week and the outlook for record high stocks in the United States at the end of the current crop season added to the bearish tone. Meanwhile, soybean oil continues to trade strong although U.S. soybean oil stocks are record large, which has heavily pressured soybean meal as soybean futures have declined. Census trade data released this morning pegged February soybean exports at 3.51 million tonnes, 245,000 tonnes more than export inspections for that month as it appears that the Census exports are catching up with shortfalls of 327,000 tonnes in January and 245,000 tonnes in December. May bean futures closed down $3.03 finishing at $271.26; July was $2.76 lower, closing at $277.96; and August lost $2.66 ending at $280.17. May meal was down $4.63 closing at $221.45; July was $4.41 lower, finishing at $228.07; and August lost $4.52 to close at $231.37. May oil closed $2.87 lower to finish at $719.80; July was down $2.65, closing at $731.93; and August lost $3.09, ending at $735.90.

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