-December U.S. soybean crush higher than expected – new record
-December U.S. soybean oil stocks lower than expected but still easily highest in nine years
USDA reported U.S. soybean crush in December was 198.2 million bushels, a new all-time monthly record in exceeding October’s 196.9 million and was higher than average market expectations of 197.7 million bushels (197.3-198.4 million range of ideas), was up from November’s 190.6 million and 2.6% higher than year ago Dec crush of 193.1 million bushels. Through the first four months of 2021/22, cumulative crush of 750 million bushels is nearly identical to last year’s 752 million and leaves January-August crush needing to total 1.440 billion bushels in order to reach the USDA’s 2.190 billion bushel annual estimate, which would be 3.7% (51 million bushels) larger than last year’s 1.389 billion bushels during the same period. With crush margins remaining historically strong and year ago crush rather weak during Feb-Aug (see 2nd chart below), we see no issues reaching the USDA’s current annual estimate and continue to expect 2021/22 crush to prove higher as we’re at 2.210 billion bushels in our balance sheet, which would require Jan-Aug crush to run 5.1% above year ago levels.
USDA reported U.S. soybean oil production in December was 2.324 billion pounds, up from 2.235 billion in November and last year’s 2.223 billion pounds, putting October-December marketing year-to-date production at 6.907 billion pounds vs 6.723 billion last year. December nationwide soybean oil production was 6.1% larger than that reported by NOPA members, in line with the 5.9% difference in November, but less than the 6.8% average difference during the previous five months (June-Oct). The U.S. average soybean oil yield in December held steady at 11.72 pounds/bushel relative to November’s 11.73 and continues to run solidly above last year’s 11.56 in December/11.55 November. Through the first three months of 2021/22, the average soybean oil yield of 11.79 pounds/bushels is running solidly above last year’s 11.58 so far.
USDA reported end December U.S. soybean oil stocks were 2.466 billion pounds, well below average market expectations of 2.565 billion (2.490-2.630 billion range of ideas) and up only modestly from November stocks of 2.406 billion pounds, but were still significantly (16.8%/355 million pounds) above year ago Dec stocks of 2.111 billion pounds. The 60 million pound increase in stocks from November was certainly less than expected given the record crush for the month and the 89 million pound increase in soybean oil production and, particularly, in comparison to NOPA-member stocks in December which jumped 199 million pounds from November. Additionally, nationwide soybean oil stocks in December were only 21.4% larger than NOPA-member stocks, significantly below the 31.3% difference in November, the 29.2% average difference over the previous 12 months, the smallest percentage difference between NOPA and nationwide stocks in 23 months and 2nd smallest difference since USDA began reporting monthly crush data again in May 2015 (stopped for several years due to budget constraints), going back 80 months. If it weren’t for last year’s December soybean oil stocks also deviating considerably lower relative to NOPA stocks (24.3% difference), we would be inclined to feel there may be an error in reported December stocks, but month-to-month deviations such as this do occur at times. Regardless of the lower-than-expected stocks, December implied soybean oil domestic usage was only up roughly 1.8% from last year, below the 4.8% and 3.4% year-over-year increases posted in November and October, respectively. Through the first three months of 2021/22, implied domestic usage is up 3.3% from last year vs USDA currently estimating marketing year total domestic usage to be up 7.8% from 2020/21. Moreover, December stocks of 2.466 billion pounds still easily reflects the highest stocks for the month in 9 years and were 15.5% (333 mil pounds) larger than any December stocks since 2013.
USDA reported U.S. soybean meal/hull production in December was 4.630 million tons vs 4.457 million in November and 4.541 million tons last year, bringing Oct-Dec marketing year-to-date production to 13.678 million tons vs 13.673 million last year. Based on estimated exports for December (official data to be available February 8), implied soybean meal domestic usage in December was up 3-4% from last year after Oct-Nov domestic usage was essentially unchanged year-over-year. Through the first three months of 2021/22, we see implied domestic soybean meal usage around 10.1 million tons, up less than 1% from last year and in line with USDA currently estimating marketing year total domestic soybean meal usage to be up 0.8% on the year.