April 3, 2006
U.S. Soybean Planted Area Up 7% In 2006
U.S. farmers intend to plant an estimated 31.1 million hectares of soybeans in 2006, up 7 percent from the acreage planted in 2005, according to USDA’s latest Prospective Plantings report. If realized, this will be the largest planted area on record, USDA said. Growers in 20 of the 31 soybean producing States intend to plant more acres this year, while producers in 10 States intend to plant fewer acres than in 2005. Though increased soybean acreage is expected across the central and northern Great Plains, Corn Belt, and Delta, the largest intended increase is in North Dakota, USDA said.
USDA also reported that soybean stocks stored on farms are estimated at a record high 23.7 million tonnes (up 10 percent from a year ago) and off-farm stocks are 21.7 million tonnes. Indicated disappearance for the December 2005 - February 2006 quarter totaled 22.7 million tonnes, down 10 percent from the same period a year earlier, according to USDA.
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Senate Agriculture Committee Chairman Not Ruling Out Farm Bill Extension
Senate Agriculture Committee Chairman Saxby Chambliss (R-Ga.) says that while his intention is to write a few farm bill, he has not ruled out a simple extension of current legislation, largely because he is less optimistic that the WTO's Doha Round will be concluded before the 2002 farm bill expires. In a recent interview, Chambliss said a simple extension is "probably more alive today than it has been because it's becoming less and less likely that we're going to have a WTO agreement."
Asked about the difficulty the Bush administration will have in convincing Congress to extend its trade promotion authority, Chambliss said, "The future of agriculture lies in our ability to export products, so extension of TPA…is important because if we don't have it, it would change … how we approach the farm bill."
The chairman was asked about the increasing importance of conservation payments in the overall mix of farm program payments and whether the next farm bill might increase funding for conservation at the expense of traditional commodity programs. He noted that Congress increased conservation under the 2002 farm bill and could well do so again in the next farm legislation. "[T]here is certainly a concern on the part of farmers that they have the funding available in conservation programs to take care of not only nonproductive land but improve wildlife habitat and other means of letting them have additional income," Chambliss said.
He added that he believes there are a number of ways Congress can help farmers through the conservation title by providing additional income that moves them away from total reliance on the commodity title. "But the commodity title is still the guts of the program," the chairman said, "and that is where I am sure most of the concentration will be."
Turning to the subject of continuing efforts to lower the maximum payment that an individual farmer could receive, Chambliss said, "Folks who talk with me are always happy with the 2002 farm bill for the most part. They like the three-entity rule. We don't see the significance of abuse of a program … you maybe see with some other programs." He also pointed out that Congress previously cut maximum payments from $450,000 to $360,000, and that in the future his committee would "try to fit whatever we do within the amount of money we have and make sure we have the funding for whatever conclusions we come to."
In defense of current payment caps, the chairman said: "[T]he folks who have to worry about payment limits are the folks who have the biggest investment and therefore they have the biggest risk. It's always been easy for me to argue in support of the high payment limit we have because those folks gamble a lot more than somebody who doesn't have that significant investment."
New Regulation Could Hinder Soyoil Imports To India
New legislation in India that would restrict imports of genetically modified (GM) foods could significantly affect soyoil imports according to a report from the Public Ledger. Import, manufacture, sale, storage, transport or distribution of any food product containing GM material will no longer be allowed except with the approval of and subject to conditions that may be imposed by the Genetic Engineering Approval Committee (GEAC), constituted under the Environment Protection Act, 1986. Importers of GM foods will have to produce a clearance certificate. The new regulation likely will restrict soyoil arrivals into the country and push domestic oilseeds and oils prices higher.
In related news, Hardeep Singh, President of Cargill, told a conference in London last week that India should focus on growing grain crops in the future, instead of oilseeds, as oil-producing crops do not grow well in the Indian climate. India’s production of soybean oil, sunflower oil and mustard oil, are historically difficult because of a lack of consistent rainfall. As for the marketing of their oilseed crop and products, India is not competitive because the low yields, said Singh.
India currently produces around 50% of its annual oil consumption and already relies on imports to make up the shortfall.
WTO Set To Issue Ruling In EU Biotech Case
The Bureau of National Affairs reports that a WTO panel is due to issue a final ruling in early May in the dispute over the EU's alleged moratorium on the market authorization of products containing genetically engineered crops. The ruling will become official only after it has been circulated to the entire WTO membership and formally adopted by the WTO's Dispute Settlement Body (DSB). BNA notes that because the ruling must be translated into the WTO's three official languages (English, French, and Spanish), officials said the ruling may not be circulated until sometime shortly before the WTO's annual summer break in August. The parties will have 60 days from the date of adoption by the DSB to decide whether to appeal the panel's ruling.
Soy Complex Higher Ahead Of USDA Stocks And Acreage Reports
The soy complex closed higher on March 30 as funds were modest buyers of ahead of the March 30 USDA stocks and acreage reports. May bean futures closed up $1.93 finishing at $215.96; July was $2.11 higher, closing at $220.83; and August gained $2.30 ending at $222.57. May meal was up $0.77, closing at $197.75; July was $0.77 higher, finishing at $200.18; and August increased $1.21 to finish at $201.72. May oil closed $4.41 higher to finish at $510.81; July was up $3.75, closing at $519.62; and August gained $3.97, ending at $523.15.
