-December soybean crush slightly lower than expected
-December soybean oil stocks slightly than expected but up solidly from Nov and highest for Dec in 6 years
-December corn for ethanol usage highest in 16 months
U.S. soybean crush in December was 184.7 million bushels, a new record for the month in surpassing last year’s 183.8 million bushels, but was slightly below average market expectations of 185.7 million bushels (185.0-186.3 million range of ideas). U.S.-wide crush was 5.7% above NOPA-member crush, which was below the previous three months’ deviations of 5.6-6.6%, explaining the shortfall in crush relative to market ideas. Sept-Dec marketing year to date crush of 709 million bushels is slightly below last year’s 715 million, leaving Jan-Aug crush needing to total 1.396 billion bushels in order to reach the USDA’s annual projection of 2.105 billion, reflecting a modest 1.4% increase from last year’s 1.377 billion bushels for the period. With the notable pullback in crush last year during May-June (see chart below), achieving the USDA’s projection should not be difficult if crush margins remain relatively solid moving forward. U.S. soybean oil production in December was 2.111 billion pounds vs 2.000 billion in November and 2.135 billion last year December, with the average soybean oil yield ticking down to 11.43 pounds/bushel from 11.45 in November and continuing to run well below last year in which December saw an 11.62 pound/bushel yield. In the first three months of the 2019/20 marketing year, soybean oil yields have averaged 11.45 pounds/bushels vs 11.61 during the same period last year. U.S.-wide soybean oil stocks rose sharply in December to 2.094 billion pounds from 1.880 billion in November and were solidly above last year’s December stocks of 1.946 billion pounds. In fact, December soybean oil stocks were the highest in six years. A notable increase in soybean oil stocks was anticipated following the surprise, at the time, of NOPA-member stocks jumping sharply which was reported in mid-January. Dec soybean oil stocks, though, were slightly below the average trade estimate of 2.128 billion pounds (2.020-2.200 billion range of ideas) as they were only 19.2% above NOPA-member stocks vs U.S.-wide stocks running 23.2-29.9% above NOPA in the previous four months. Pending official trade data for the month, the preliminary look at December domestic usage of soybean oil reflects a 23-24% decline from last year following November domestic usage being down 15% year-over-year. U.S. soybean meal production in December was 4.338 million tons vs 4.112 million in November and 4.296 million last year, with domestic usage for the month implied up 11-12% from last year in what appears to be a statistical offset to November’s unexpected/unlikely 10% decline. Through the first three months of 2019/20, soybean meal domestic usage is implied essentially unchanged from last year (+0.3%).
USDA reported 479.2 million bushels of corn was used for ethanol production in December, up from 456.7 million in November and up 3.8% (17.6 mil bu) from last year’s December usage of 461.6 million. Moreover, the 479.2 million bushels used in December was the highest in 16 months, while the year-over-year increase was the largest since July 2018. Based on preliminary monthly ethanol production data, as EIA’s official monthly data is only through November, the ethanol/corn yield in December was 2.85 gallons/bushel vs 2.84 in November and comparable to last year’s December yield of 2.854. However, ethanol yields in the last two months are down from those seen during the previous six months which averaged 2.924 gallons/bushel. Through the first four months of 2019/20, total corn for ethanol usage of 1.775 billion bushels is down 2.9% from last year’s 1.827 billion, leaving Jan-Aug usage needing to total 3.600 billion bushels in order to reach the USDA’s 5.375 billion bushel annual target, in what would be a 1.5% increase from last year’s 3.549 billion during the 8-month period. For the first three weeks of January, ethanol production ran roughly 2.5% above year ago levels, but has slowed relative to the gains posted in December as ethanol margins have pulled back considerably. Current data supports the USDA’s annual corn for ethanol usage estimate, but a continued weak margin structure may change that view down the road. USDA reported 9.5 million bushels of sorghum was used for ethanol production in December vs 7.2 million in November and 5.4 million last year, leaving corn to account for 98.0% of feedstocks used in the month vs 98.4% in November and 98.8% in December last year.PRIVACY POLICYDISCLAIMERCOPYRIGHTABOUTRJO NEWSCONTACT US(800) 621-0757