-NOPA October soybean crush slightly higher than expected – a bit below year ago
-NOPA October soybean oil stocks sharply higher than expected
-Soybean oil production record high on record-shattering October yield
NOPA reported its members crushed 184.0 million bushels of soybeans in October, slightly above average market expectations of 181.9 million bushels, but within the overall range of ideas, while sharply rising in seasonal fashion from 153.8 million bushels in September, but still slightly below last year’s October crush of 185.2 million bushels. Being slightly below last year, NOPA October crush was the 2nd highest on record for the month and the 3rd highest ever monthly crush for NOPA members regardless of month. Based on the recent-month relationship between NOPA member crush and U.S. total crush, today’s data implies October nationwide crush was around 196.0 million bushels vs 196.6 million last year and would put total crush for the first two months of 2021/22 at 360 million bushels vs 368 million last year, leaving November-August crush needing to run roughly 3.2% above last year in order to reach the USDA’s 2.190 billion bushel annual crush estimate.
Perhaps the most interesting/intriguing number in today’s NOPA data is the massive 2.187 billion pounds of soybean oil produced by NOPA members in October, a new all-time monthly record for any month, up sharply from 1.814 billion pounds in September and above last year’s 2.162 billion pounds in October despite crush being lower. Most importantly, NOPA members averaged a record-setting 11.89 pounds/bushel soybean oil yield for the month of October vs last year’s 11.67 and the previous October record of 11.76 pounds/bushel. With October data reflecting the first new crop soybean supplies making their way into crush facilities, this provides the first look at what likely lies ahead for soybean oil content of this year’s crop, which obviously appears to be extremely good. Based on the recent-month relationship between the nationwide average monthly soybean oil yield and that reported by NOPA members, which uncharacteristically has been slightly higher than NOPA-member yields, the October U.S. average soybean oil yield could be around 11.91 pounds/bushel vs last year’s 11.61. Even adjusting downward to the more typical slightly lower nationwide oil yield than achieved by NOPA members would imply a likely minimum 11.85 pounds/bushel U.S. yield for October. Under this premise, based on the long-term, historically strong relationship between the October soybean oil yield and annual average yields, today’s data implies the 2021/22 U.S. average soybean oil could easily be a new record above 11.85 pounds/bushels. This is a situation we will continue to monitor very closely in the coming weeks/months once USDA provides official October data on December 1 and then continuing with November data as the relationship between the marketing year total average yields is even stronger when comparing to the average yield achieved in October and November combined. The USDA is currently using an 11.66 pound/bushel average soybean oil yield assumption for 2021/22 in their balance sheet. Based on annual crush of 2.190 billion bushels, an average soybean oil yield of 11.85 pounds/bushels would add more than 400 million pounds of soybean oil production to the 2021/22 balance sheet relative to the USDA’s current 25.535 billion pound estimate. The current all-time record marketing year average soybean oil yield is 11.82 pounds/bushel in 2012/13.
The record high soybean oil production in October clearly influenced NOPA-member soybean oil stocks being reported at 1.834 billion pounds, sharply above average market expectations of 1.724 billion pounds, up significantly from 1.684 billion pounds in September, a massive 348 million pounds above last year’s 1.487 billion pounds and easily a 9-year high for the month of October. Moreover, NOPA soybean oil stocks in October were the highest for any month in 17 months going back to May 2020. Implied monthly soybean oil “off-take” among NOPA members (last month’s stocks + this month’s production – this month’s stocks) was actually quite good at 2.037 billion pounds vs 1.798 billion in September, but a bit below last year’s 2.108 billion pounds, indicating the significant jump in production simply outpaced the demand gains for the month. Over the most-recent six months, nationwide soybean oil stocks averaged 30% larger than those reported by NOPA members and would imply nationwide soybean oil stocks potentially around 2.385 billion pounds vs last year’s 1.968 billion.
NOPA members reported producing 4.289 million tons of soybean meal in October vs 3.619 million in September and 4.349 million tons last year. The average soybean meal yield achieved by NOPA members in October was 46.62 pounds/bushel vs 47.06 in September and 46.95 in October last year. For some reason, this month’s NOPA data release did not include soybean meal export data by NOPA members as is usually provided.