The record cold spell that hit the Southeast United States early in April may be seen a s a benefit to the soybean crop. Scientists believe the cold weather may reduce the threat that Asian soybean rust fungus will spread this year and some pant pathologists are confident the cold weather killed the fungus in parts of the Southeast. “We had a record-breaking frost Easter morning, with temperatures in the panhandle below freezing for several hours,” University of Florida plant pathologist James Marois told USDA recently.

USDA said although the exact impact of the frost on rapidly growing kudzu - the primary over-wintering host for Asian rust - is still not fully known. However, USDA did say the early April freeze: “…Could reduce the build up and potential spread of soybean rust for several weeks. Prior to this frost event, warmer temperatures had increased the growth of kudzu throughout the Southeast.” Some states are reporting extensive damage to kudzu leaves, with South Carolina estimating more than 50% of kudzu leaves in the state were killed by the freeze.

A Cargill biorefinery in Blair, Neb., has begun producing what could be the next big thing in farming: a new generation of renewable chemicals, according to an article in the Wall St. Journal. High oil prices have bolstered the economic rationale for making plastics, foam and lubricants from plants such as soybeans and corn. The commodities are showing up in carpets, disposable cups, salad bags, AstroTurf, candles, lipstick, socks, surfboards, cooling fluid in utility transformers, and even the body panels of Deere & Co. harvesting combines.

There has also been growing demand from retail giants like Wal-Mart Stores Inc., newly sensitive to environmental pressure, for packaging made from renewable plastic. The item notes that the diversion of yet more farm products toward the energy and industrial sectors could stretch demand and send commodity prices sky high. Other problems remain: For many manufacturers, adjusting equipment to use renewable chemicals made by Cargill and others is cost-prohibitive.

Argentina’s soybean farmers may lose more than 2 million tonnes of output after rains damaged crops, according to Jorge Weskamp, president of the Rosario Board of Trade. Rains in central Argentina have already damaged about 1 million tonnes to 2 million tonnes of soybeans, and may harm more if showers persist, the official told Bloomberg News. Argentina may fall short of expectations for a record soybean crop this year as rains flood arable land in the Santa Fe province, said Weskamp.

The Santa Fe province, which accounts for 30% of the country’s soybean output is Argentina’s second-biggest soy producing province after Cordoba. Santa Fe has already received 750 millimeters of rain so far in 2007, compared with an average 950 millimeters for the whole year, said Hugo Fontanetto, an analyst at the National Agriculture Technology Institute. As much as 600 millimeters of rain fell during a three-day period, he said.

House Ag Committee Chairman Collin Peterson (D-Minn.) said April 19 he is working with House leaders on budget issues relative to the next farm bill. Peterson said in a teleconference that he was working with House leaders to find potential spending offsets for agriculture funding in the budget resolution. Peterson said that a farm bill developed under the current budget baseline for agriculture spending is “saleable” in his district, but that his recent visit to fruit and vegetable production areas in California revealed that a farm bill based on the current baseline would “not be very popular” with growers in that sector.

Commenting specifically on issues related to the soybean sector, Peterson said he thinks the American Soybean Association “has a point in this rebalancing” (higher loan and target prices for soybeans) and that his committee staff is reviewing the proposal.

Regarding a suggestion by Senate Ag Committee Chairman Tom Harkin (D-Iowa) to phase out direct payments and funnel those dollars to other areas for ag spending, Peterson said that no existing program should face cuts to pay for others initiatives in the farm bill.

As for timing of the farm bill, Peterson said that he will hold off on offering his “chairman’s mark” for the farm bill until after the budget resolution is finished. Peterson said that he could not rule out the addition of a competition title via work on the farm bill at either the subcommittee or full committee level. Peterson noted that some of the proposals on competition would “do more harm than good.”

The global palm oil industry will be headed for disappointment if it is expecting 2007 to be a year of substantial biodiesel exports to Europe, an Italian biodiesel producer told Dow Jones Newswires. Michele Falciola, president of Mythen SpA, said palm oil is likely to continue playing only a small part in the European biodiesel market for now, as the region is already struggling with overcapacity and still views the quality of fuels made from foreign oils with much skepticism.

All the optimistic talk that is been circulating in the palm oil market about millions of tonnes being used for biodiesel, that has in turn lifted prices to eight-year highs, may, therefore, be misguided, he said.“The overcapacity of biodiesel in Europe is becoming pathological,” Falciola said. “Malaysian and Indonesian manufacturers that have expressed their desire to export most of their (palm oil-based) biodiesel to Europe, therefore, appear almost naive.”

The soy complex was mostly higher on April 19 with soybeans closing a few cents higher, soybean meal closing largely unchanged and soybean oil posting the biggest gains in the complex as the oil share rebounded in conjunction with higher palm oil futures.May bean futures closed up $1.01 finishing at $263.91; July was $1.01 higher, closing at $270.06; and August gained $1.01 ending at $272.73. May meal was unchanged closing at $217.04; July was unchanged, finishing at $223.99; and August lost $0.55 to close at $227.18. May oil closed $10.80 higher to finish at $695.77; July was up $10.80, closing at $708.56; and August gained $9.70, ending at $712.75.

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