Soy product futures ended mixed, with adjustments in the meal/oil spread featured. Soyoil retreated, losing product value today on the heels of a massive gain in 2009/10 U.S. soy oil ending stocks, as USDA throttled back old crop bio diesel use 200 million lbs, said Rich Feltes, senior vice president research at MF Global in Chicago. Soymeal rallied in step with soybeans. December soyoil settled 0.55 cent or 1.3% lower at 41.83 cents per pound. December soymeal ended $8.30 or 2.9% higher at $296.20 per short ton.(Source: CME)
Brazil Soy Output Seen At 67 Million Tons In 2010-11.(Source: CME)
Brazilian agricultural consultancy AgraFNP on Thursday pegged Brazil's upcoming 2010-11 soybean output at 67 million metric tons.
AgraFNP, in a preliminary second crop estimate for the 2010-11 crop season, said that Brazil's soy should dip from a record 68.5 million tons in the 2009-10 season that ended its harvest in May.
In Brazil--the world's No. 2 producer of soybeans after the U.S.-- dry weather during the upcoming crop season is likely to be less favorable than this season, Jacqueline Bierhals, an AgraFNP analyst, told Dow Jones Newswires.
The La Nina weather phenomena could hamper productivity especially in the south of Brazil, she added.
La Nina involves a cooling of the surface waters off the coasts of South America and generally causes decreased rainfall and cooler temperatures in Brazilian farmlands.
AgraFNP said that 23.2 million hectares should be planted with soybeans in 2010-11, compared with 23.3 million hectares in 2009-10.
Brazil's average yield should be around 46.6 per 60-kilogram bag of soy per hectare in 2010-11 due to dry weather, compared with 49 bags per hectare in 2009-10, Bierhals said.
AgraFNP's estimate is higher than the U.S. Department of Agriculture's forecast on Thursday of 65 million tons, but less than rival consultancy AgRural's forecast of 70 million tons for the upcoming crop.
Brazil is in its inter-harvest period and planting should start in September or October.
Cargill Makes First Foray Into Argentina Biodiesel Market.(Source: CME)
Commodities giant Cargill Inc. has leapt into the ballooning Argentine biodiesel market and will build its first plant in the South American country this year to produce the so-called green fuel.
The company plans to spend 450 million pesos ($113 million) to build an 18 megawatt power plant and biodiesel facilities with capacity to make 240,000 tons per year, the Minnesota company said in a press release Thursday. Both are expected to be operational by September 2011.
Argentina's biodiesel production has quadrupled in the last four years and capacity totals more than two million cubic meters. Most is exported to the European Union, although domestic use is expected to soar as blending requirements rise.
Last month, the government boosted the amount of biodiesel to be blended with normal diesel to 7%, from 5%, and it wants to reach 10% by year-end. Earlier this year, Planning Minister Julio De Vido said that within four years biodiesel will account for about 20% of the regular diesel mix.
Argentina makes biodiesel out of soybeans, the county's top crop. Exporters enjoy a tax break for turning the beans into fuel--biodiesel exports are taxed at 20% while soyoil shipments carry a 31% export duty. In addition, the government is working to fix a minimum domestic sale price to ensure profitability for manufacturers and stimulate production.
The banks of the Parana river in Santa Fe province are lined by a number of large grain processing and export complexes and most of the farm exports from Argentina pass through the region on their way to overseas markets. The area has also become a hub for biodiesel output with the top grain processors investing hundreds of millions of dollars in recent years to build biofuels capacity.
Argentina's increased blending requirements and steps to implement them will be a boon to soyoil exporters, who have seen sales to top buyer China cut off due to a trade dispute.
In April, China blocked imports of Argentine soyoil citing failure to meet Chinese purity standards, but many see the move as retaliation for antidumping sanctions imposed by Argentina on a number of Chinese imports.
While Argentina has increased soyoil sales to India to partially make up for lost exports to China, exporters and farmers are paying for it dearly due to steep discounts. Argentine soyoil has been selling at a discount of about $50 per ton compared to Brazilian soyoil, according to the Buenos Aires Cereals Exchange. That works out to about 5%.
About 6 million tons of soyoil exports will be affected this season, bringing down farm profits and export tax revenue, according to the exchange.
Cargill said it expects to use about 30% of the soyoil produced at its plant to produce biodiesel for the local and export market.
Palm oil almost flat before USDA report, exports eyed
KUALA LUMPUR, Aug 12 (Reuters) - Malaysian crude palm oil futures barely moved as traders awaited a key U.S. report on world grains demand and supply that has recently driven vegetable oil markets.
"There's not much fundamental factors involved, everybody is watching out for the USDA report tonight... there'll be some disturbing factors," said a trader with Kuala Lumpur-based foreign brokerage.
Indonesia forest moratorium to stymie palm oil firms
JAKARTA, Aug 12 (Reuters) - Indonesia's plans to halt forest clearing will slow the aggressive expansion of plantation firms in the world's top palm oil producer, leading to higher costs as firms will need acquisitions or improved yields to boost growth.
The two-year moratorium on new permits to clear natural forest from 2011 will increase land prices, pushing some to consider following industry leader Wilmar in expanding overseas to Africa or to diversify into food crops.
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