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NOPA December soybean crush was higher than expected, but even more surprising was the huge increase in soybean oil stocks to an 8-month high overall, the highest for the month of December in 7 years and massively above average market expectations.

NOPA-member soybean crush for December was reported at 174.8 million bushels, a new record for the month of December and was solidly above average market expectations of 171.6 million, up strongly from 164.9 million in November and above last year’s December crush of 171.8 million bushels by 1.8%. December NOPA crush was just short of the all-time record of 175.4 million bushels set two months prior in October. In the first three months of 2019/20, U.S.-total crush averaged 6.3% larger than NOPA-member crush and would imply total December crush of around 185.8 million bushels vs last year’s 183.8 million. If accurate, Sept-Dec crush would total 710 million bushels vs 715 million last year (down 0.7%) and would require Jan-Aug crush to run 1.3% above last year in order to reach the USDA’s 2.105 billion bushel annual estimate.

NOPA-member soybean oil production in December was 2.012 billion pounds, up modestly from 1.902 billion in November as the average soybean oil yield declined to 11.51 pounds/bushel from 11.53 in November and continues to run solidly below last year which saw soybean oil yield 11.69 pounds/bushel in December. Soybean oil yields from this year’s crop are clearly worse than last year’s crop, with NOPA averaging 11.54 pounds/bushel over the Oct-Dec period vs last year’s same-period 11.68. In fact, the December oil  yield was the lowest for the month since 2014. USDA has yet to reflect a lower expected soybean oil yield in 2019/20 as their 11.60 pound/bushel assumption is essentially unchanged from last year’s 11.61. Last year NOPA soybean oil production in December was 2.008 billion pounds.

The biggest surprise from today’s data was the reporting of end December soybean oil stocks held by NOPA members surging to 1.757 billion pounds from 1.448 billion in November and was massively above average market expectations of 1.507 billion. While a higher-than-expected stocks figure is not surprising in context of the larger crush figure, the degree of the stocks jump was more than surprising as the 21.3% increase from November reflected the largest single-month stocks rise in nearly 15 years and the 2nd largest monthly percentage increase in available NOPA data going back 19 years. Moreover, December stocks of 1.757 billion pounds are the largest for the month in 7 years and 5.1% above last year’s December stocks of 1.498 billion pounds. In a very simplied calculation of monthly “offtake” (November stocks + December production – December stocks), December’s 1.703 billion pounds by NOPA members was down solidly from 1.877 billion pounds in November, last year’s December 1.994 billion pounds and the lowest overall in 10 months.

NOPA members reported producing 4.112 million tons of soybean meal in December vs 3.894 million in November and 4.018 million tons last year, while exporting 903k tons of soybean meal in December vs 869k in November and 826k tons last year. In the first three months of 2019/20, NOPA-member soybean meal yields have averaged 47.06 pounds/bushels vs 46.78 in the same period last year.

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