Soy industry overview

- Last updated on GMT

Related tags: European union

Although soybean production was below market expectations last
month, the spread of Asian rust disease has receded.

Crush below market expectations The NOPA (National Oilseed Processors Association) crush for June was 3.41 million tons, according to the American Soybean Association (ASA), significantly below market expectations. However, analysts expect that 2004-05 soybean oil domestic usage will increase by roughly 2 percent, which seems reasonable since last year's July/September implied usage may have been constrained by tight supplies. Rust impact limited Slow spread of Asian Rust in the south and drought in the Midwest could limit the impact of the soybean rust, according to an outlook compiled by a coalition of plant pathologists at the Plant Health Initiative of the North Central Soybean Research Program run by Iowa State University. The outlook points out that high concentration of spores are "still limited to Florida, Georgia, Alabama, southern South Carolina and Mississippi." The US industry has been badly affected by disease. Earlier this year, American Soybean Association (ASA) president Neal Bredehoeft called for the USDA to ensure there was enough fungicide available to tackle the growing menace of soybean rust. Transportation costs firm Transport costs remain firm. Rail costs overall were mostly unchanged from May, but were 11 percent higher year over year for the month of June. The cost of moving grain food products was unchanged from May, but year over year are up 8 per cent. Agricultural commodities and products will face continued cost escalation in a tight capacity environment where these types of movements compete against intermodal and coal carloadings. The cost of moving products and goods by truck during June increased 2 percent from a likely data anomaly during May. Compared to June last year, truck freight costs were up 8 percent. Truck costs continue to run higher for a shortage of drivers while demand continues to increase, and operating costs continue to escalate. EU GM policy debated The gap between the European Commission's pro-GMO policy and the attitude of many EU member states was highlighted earlier this month when environment ministers voted at the Environmental Council to maintain a ban on GMO strains in five EU countries. The European Commission had proposed that the bans currently imposed by Austria, France, Germany, Greece and Luxembourg on various strains of corn and rapeseed be lifted. The Commission said there was no scientific justification for these bans on either health or environmental grounds. However, the UK was the only member state to vote in favor of lifting all eight GMO bans, while Finland and Sweden abstained. The Commission is worried that negative votes on GM crops and seeds could further damage relations with pro-biotech third countries, particularly the U.S., Canada and Argentina.

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