October 10, 2006
CONAB: 2006-07 Brazil Soybean Area Expected To Be Down
The Crop Supply Department of Brazil’s Ministry of Agriculture (CONAB) issued its first report of the 2007 harvest. CONAB placed soybean planting intentions between 20.5 and 21.1 million hectares, which is a 5% to 8% reduction from its estimate of last season’s area of 22.2 million. To compare, USDA has estimated the upcoming season’s area at 21 million hectares, down 4.5% from its estimate of last season’s area of 22.0 million hectares.
CONAB put a production range for the upcoming soybean harvest at 53.5 to 55 million tonnes, which would be 100,000 to 1.6 million tonnes larger than its estimate of last season’s production of 53.4 million tonnes. CONAB is assuming a 2.61-tonne-per-hectare yield. This forecast is slightly lower than USDA’s forecast of 56 million tonnes, which would be one million tonnes above its estimate for last season of 55 million. USDA is using a 2.67-tonne-per-hectare yield for the 2007 harvest.
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Latin American Nations To Meet On Doha Round:
The WTO, OECD and Inter-American Development Bank have scheduled an Oct. 10 and 11 international conference on agriculture policies and trade in Latin America. The meeting will take place in Buenos Aires. Its purpose is to bring together governments from across the region, international agriculture policy experts, trade negotiators as well as representatives of the food and farming industries in an attempt to bridge some of the divisions that led to the breakdown of the Doha Development Round of trade negotiations earlier this year.
Meanwhile, U.S. agricultural trade negotiator Dick Crowder says there is still “quiet work” going on relative to the Doha Round talks although, in an interview with the Council on Foreign Relations, Crowder would not commit to timeline for completing the Round. “We’ve had a lot of deadlines this year and we’ve had a lot of timelines that we have not met,” Crowder said. “My feeling is…we will have an agreement. It’s not a question of if, but when.”
Department Of Energy Calls For Revised Alternative Fuels Target
The Department of Energy (DOE) has said an ambitious goal set by Congress in 1992 to replace 30% of the nation’s gasoline supply with alternative fuels by 2010 is unattainable and the target date should be extended 20 years to 2030. DOE official Dana O’Hara said alternative fuels currently account for only about 3% of U.S. on-road transportation fuel supply. O’Hara said the DOE does not expect the percentage to change by 2010. The renewed emphasis on alternative fuels in recent years has been offset by increases in vehicle sales. It is obvious the country will not go from 3% to 30% within the next four years, O’Hara said.
USDA Approves Temporary Storage For Soybeans
USDA has approved temporary storage for 2006 crops of soybeans and rice, but rejected emergency storage for soybeans. USDA published a notice in the October 4 Federal Register explaining the decision. “Because the 2006 crop harvest is expected to exceed available commercial storage space in certain areas, FSA has taken actions to ensure adequate availability of storage space at harvest for producers seeking warehouse-stored marketing assistance loans for grain,” USDA said. “Because soybeans are more susceptible to weather, infestation and other deteriorating conditions than bulk grains, soybeans are not approved for
emergency storage space,” USDA said.
FSA will allow licensing of temporary storage space for 2006-crop soybeans under the following terms and conditions:
- Such space may be used from the time of initial licensing until March 31, 2007.
- Temporary storage structures must be operated in conjunction with a United States Warehouse Act (USWA)-licensed warehouse.
- In addition:
- Asphalt, concrete, or other approved base material must be used.
- Rigid self-supporting sidewalls must be used.
- Aeration must be provided.
- Acceptable covering, as determined by FSA, must be provided.
- The Commodity must be fully insured for all losses.
- Warehouse operators must meet all financial and bonding requirements of the USWA.
- Warehouse operators must maintain a separate record of all rice and soybeans stored in temporary grain storage space and must account for rice and soybeans in the Daily Position Record.
WTO Finds Against EU Biotech Moratorium
The WTO has ruled in favor of the United States, Argentina and Canada in their WTO case against the EU over its moratorium on approving agricultural biotech products and EU member-state bans of previously approved products.
The United States brought a WTO challenge in May 2003, after five years of delays by the EU in complying with WTO rules as well as its own procedures and the recommendations of its own scientists. The WTO report issued today is the longest in the history of the WTO, according to a statement issued jointly by USTR Susan Schwab and Agriculture Secretary Mike Johanns.
In addition to the EU’s across-the-board moratorium on product approvals, the WTO case challenged product bans imposed by six EU members (Austria, France, Germany, Greece, Italy, and Luxembourg) on seven of the biotech crops approved by the EU prior to the adoption of the moratorium. According to the statement, in each case, the panel upheld the United States’ claims that, in light of positive safety assessments issued by the EU’s own scientists, the member state bans were not supported by scientific evidence and were thus inconsistent with WTO rules.
Soy Complex Up On Exports And Speculative Short Covering
The soy complex closed higher on October 5 reflecting strong export sales and speculative short covering. November bean futures closed up $3.77 finishing at $207.78; January was $3.86 higher, closing at $213.11; and March gained $3.22 ending at $216.69. October meal was up $2.54, closing at $184.41; December was $2.76 higher, finishing at $186.95; and January was up $3.09 to finish at $188.05. October oil closed $6.61 higher to finish at $525.14; December was up $5.73, closing at $530.43; and January increased $5.95, ending at $539.69.
