January 23, 2006
USDA And The Department Of Energy To Map Soy DNA Genome For Biodiesel
Two federal government departments have joined forces to decode the DNA of the soybean in an effort to boost its use. The sequencing of the soybean genome is the first project resulting from a new agreement between the Departments of Energy and Agriculture to share resources and coordinate the study of plant and microbial genomics.
The Department of Energy said that its Joint Genome Institute in Walnut Creek, California will be the lead facility in the project. To date, the Institute has sequenced and released a total of 150 microbial organisms. The soybean genome is about 1.1 billion base pairs in size, less than half the size of the corn genome. The DOE Joint Genome Institute, supported by the DOE Office of Science, unites the expertise of five national laboratories, Lawrence Berkeley, Lawrence Livermore, Los Alamos, Oak Ridge, and Pacific Northwest, along with the Stanford Human Genome Centre to advance genomics in support of the DOE mission for clean energy generation and environmental characterization and cleanup.
PAGE TOP ADM Agrees To Process Monsanto Low Linolenic Soybeans
Monsanto and Archer Daniels Midland Company (ADM) have announced that ADM will process Monsanto’s Vistive low-linolenic soybeans in 2006 at its facility in Frankfort, Indiana, and will market the low-linolenic soybean oil for use by the food industry. According to Monsanto, Vistive low-linolenic soybeans will reduce the need for partial hydrogenation of soybean oil, helping food companies reduce the presence of trans fatty acids (trans fats) in their products.
For the 2006 growing season, ADM will be contracting with growers in Indiana for up to 40,000 acres of Vistive soybean production. ADM will pay a premium to producers who grow Vistive soybeans under contract. It will then crush and sell the processed soyoil to food companies.
Vistive soybeans, developed through conventional breeding, contain less than 3% linolenic acid compared with the 8% found in traditional soybeans. The result is said to be more stable soybean oil, with less need for hydrogenation. Because soybeans with a lower linolenic acid level reduce the need for partial hydrogenation, their application in processed soybean oils will reduce the presence of trans fats in processed soybean oil.
Transportation Update
U.S. freight rates across the various modes were mixed during December according to the Bureau of Labor Statistics. Truck rates retreated for the third consecutive month, down less than one percent from November. However, truck rates ended the year 4 percent higher than 2004. For 2005, the truck index was up 6 percent year over year. Rail rates were mostly unchanged in December, up ever so slightly from November but 13 percent higher from the previous year. Rail rates during 2005 averaged 10 percent higher than 2004. Barge rates during December were 1 percent higher than November and 39 percent higher year over year. The 2005 barge rate index was 18 percent higher than 2004.
The ocean freight spread between the Gulf and PNW to Japan was the lowest it has been since June 2004 at $12.25 per tonne for the week ending January 13. The spread narrowed as the Gulf to Japan rate has dropped 6% since the New Year started, while the PNW to Japan is down nearly 2 percent since the start of 2006. Ocean freight rates have been under pressure for a bulging fleet of vessels with a 2006 order book that will rival 2005’s 361 deliveries. Demand for tonnage has slowed as holidays around the globe are holding back business while contract pricing for iron ore and coal have yet to be settled.
January -November 2005 Ag Trade Surplus $3.5 Billion
For the first 11 months of 2005, U.S. agriculture posted a $3.5 billion trade surplus, down from the same period a year ago, USDA’s Economic Research Service said last week.
U.S. agricultural exports fell by about 2 percent from October to November, while imports rose by about 5 percent. Year-to-date exports, at $57.4 billion, are $1.7 billion higher than the same period in 2004. Imports are $4.8 billion higher at $53.9 billion. While still maintaining a trade surplus, that surplus has shrunk from $6.6 billion for the first 11 months of calendar year 2004 to $3.5 billion for the same period in 2005.
Parana Crops Likely Damaged From Hot, Dry Weather
Brazil began harvesting its soybeans last week, in what is expected to become part of a 57.9 million tonne crop. However, some farmers in Parana are reporting that dry weather could reduce the state’s production by 10 percent. Parana is expected to harvest 11.7 million tonnes of soy in the 2005-06 crop. “It’s been more than 10 days since the south and southwestern part of Parana has seen any significant rainfall,” said Dirlei Monfio, an agronomist at the state’s Secretary of Agriculture. “And crops are definitely starting to feel the pain.” Monfio released a report last week that said 5 percent of the state’s soy crop was in “poor condition.”
There is some disagreement over the potential Parana crop loss. Monfio said he did not agree with agronomists from Parana’s largest cooperative, Coamo Agroindustrial, who said that 10% of their crop would be ruined because of dry, hot weather since January 1. “I think we are going to see a reduction in this crop size out of Parana,” Decezar Vernizi, crop manager at Coamos office in Campo Mourao, told Dow Jones Newswire. Coamo cooperatives span three states – from southern Mato Grosso do Sul, through Parana and into Santa Catarina.
Soy Complex Mixed As South American Crop Becomes Available
The soy complex closed mixed on January 19 as soybean meal futures posted modest gains as the market consolidated from the steep losses of the past two weeks. Soybean export sales hit a marketing-year high of 1.3 million tonnes. China accounted for 499,000 tonnes and unknown destinations were 440,000 tonnes. Export commitments to China have risen to 6.8 million tonnes, but are well below last year’s 9.2 million tonnes. This may be the last surge of U.S. export sales this marketing year as future Chinese purchases may originate mainly out of South America as new-crop supplies there become available. Record U.S. supplies, poor demand and favorable South American crop prospects paint an extremely bearish outlook for soybean prices. March bean futures closed down $0.28 finishing at $207.60; May was unchanged, closing at $211.18; and July lost $0.18 ending at $214.58. March meal was up $0.99, closing at $196.65; May was $0.88 higher, finishing at $198.97; and July increased $0.66 to finish at $198.97. March oil closed $1.76 higher to finish at $464.73; May increased $2.43, closing at $473.33; and July gained $2.87, ending at $481.48.
