On March 30 USDA released its important first survey look at U.S. producer planting intentions for 2007. Survey results reflect producer views as of early March, so that subsequent price movement and weather may shift actual seedings. USDA also released its U.S. grain stocks estimates as of March 1 as a useful guide to determining ongoing grain usage rates. USDA did not revise its supply, demand and carryover estimates today, with that update coming in its April WASDE report.

USDA’s estimates confirm the expected dramatic shift in U.S. planted acreage toward corn and away from soybeans and cotton. Expected corn plantings at 36.6 million hectares are near the upper end of the trade pre-release estimate, while soybean acres at 27.2 million hectares are well below the mean trade estimate.

According to USDA, soybean stocks for 2007 could be record large (48.6 million tonnes compared with 45.4 million tonnes in 2006). And, despite reduced 2007 acres, USDA expects U.S soybean farmers to produce a crop adequate to maintain above-average stocks levels.

USDA’s stocks figure implies an unusually large December/February residual use relative to Census exports. Residual use during the first half of the marketing year suggests that USDA may have overstated the 2006 soybean crop by about 544,000 tonnes. USDA’s planting intentions data for soybeans tightens the new crop soybean balance sheet considerably with the 2007-08 carryout now seen just above 8.16 million tonnes. This is a carryout the could be added to in the coming weeks, depending on how good the South American crops end up being.

Brazilian authorities have closed down a major Cargill soy export port on the Amazonian, saying the agribusiness firm failed to provide an environmental impact statement required by law. Cargill, said it will appeal as it had provided an environmental impact statement to the state authorities of the state of Parana, where the plant is located.

The plant was opened in Santarem, Parana three years ago since when it has been opposed by residents, environmentalists and federal prosecutors because of threats to the Amazon River. Paulo Adario, Greenpeace Amazon campaign coordinator in Brazil, said: “A big step forward has been taken in enforcing the responsible use of natural resources and bringing greater governance in the Amazon.”

Cargill spokeswoman Lori Johnson said: “We find ourselves caught in a jurisdictional dispute between the state and federal government about which regulations have precedence. When we built the facility, the permits were issued by the state.”

However, Cargill said its next soy shipment scheduled to leave the SantaremPort was for April 4, but declined to say if that shipment would be redirected.No nearby shipments were scheduled. Cargill said the company was providing no other details about the shipments until it gets a response on the court appeal

USDA’s Animal and Plant Health Inspection Service (APHIS) issued a statement last week clarifying the existing approach for handling situations in which regulated genetically engineered (GE) plant material becomes mixed at low levels with commercial seeds and grain. APHIS said the policy “is not new, but rather a description of how APHIS currently evaluates and responds to these incidents.”

In light of continuing international discussions regarding low-level presence (LLP), APHIS formally stated its approach. APHIS said that developers of GE crops must comply with all APHIS regulations and permit conditions to prevent the release of regulated GE material. However, when LLP incidents occur, the agency’s policy is to respond with actions appropriate to the level of risk, determined by a scientific assessment and warranted by the facts in each case.

APHIS will initiate an inquiry whenever regulated material is mixed with commercial seeds or grain to evaluate any risk, to determine the circumstances surrounding the release and to determine whether remedial and/or enforcement actions may be appropriate. If APHIS determines that an incident involving regulated GE plant material could pose a risk to plant health or the environment, APHIS will take appropriate remedial steps using its authority under the Plant Protection Act. In cases in which APHIS determines that remedial action is not necessary to mitigate LLP of regulated GE plant material to protect plant health and the environment, APHIS is not precluded from taking enforcement action against a company or individual for violations of APHIS regulations.

A 2002 U.S. Office of Science and Technology Policy Federal Register notice outlined proposed actions to be taken by the three agencies that provide regulatory oversight of the development of GE organisms — APHIS, the Food and Drug Administration (FDA) and the Environmental Protection Agency (EPA) — aimed at strengthening the controls to prevent low levels of regulated materials from GE plants from occurring in commercial seeds and grain until appropriate safety standards have been met.

In 2006, FDA published a Federal Register notice and guidance document for early food safety assessments and EPA published a Federal Register notice clarifying its guidance for field testing of plant-incorporated protectants (pesticides intended to be produced and used in a living plant). This clarification is consistent with those documents.

The soy complex was up on March 29 (a day ahead of last week’s USDA reports) with soybean oil futures hitting new contract highs amid strength in the petroleum markets. The recent gains that soybeans have made on corn now appear to be justified given the big switch from soybeans to corn that USDA has reported. Soybeans probably can further gain on corn as support for corn prices will be undermined by larger-than-expected acreage and March 1 stocks. The oil product share may come under pressure as soybean and soybean meal prices catch up with recent gains in soybean oil prices. May bean futures closed up $2.76 finishing at $285.95; July was $2,48 higher, closing at $291.47; and August gained $2.20 ending at $293.58. May meal was up $0.33 closing at $240.96; July was $0.11 higher, finishing at $246.25; and August increased $0.77 to finish at $249.67. May oil closed $12.35 higher to finish at $726.86; July was up $11.68, closing at $736.56; and August gained $11.46, ending at $740.75.

Back to index