-March U.S. soybean crush in line with expectations
-March U.S. soybean oil stocks lower than expected
-March corn for ethanol usage supports USDA annual estimate
USDA reported U.S. soybean crush in March was 188.2 million bushels, in line with average market expectations of 188.4 million (188.0-189.2 million range of ideas), and 2.0% (4.0 million bushels) below last year’s March crush of 192.2 million. This followed February crush of 164.3 million, which was down 6.2% (11.0 million bushels) from last year and puts 2020/21 marketing year-to-date (Sept-March) soybean crush at 1.301 billion bushels vs 1.265 billion last year, up 36 million bushels (2.8%). Based on the USDA’s 2.190 billion bushel annual crush estimate, April-August crush would need to total 889 million bushels vs last year’s 899 million bushels during the period, a 1.1% (10.3 million bushel) rationing from year ago levels. While crush margins have maintained solid levels, even with the extremely strong soybean price action of late, the modest pullback in crush in March relative to last year gives optimism the needed rationing job can be achieved. USDA reported U.S. soybean oil production in March was 2.222 billion pounds vs 1.925 billion in February and 2.201 billion pounds last year, with the U.S. average soybean oil yield in March hitting a marketing year high 11.81 pounds/bushel, up from 11.71 in February and continuing to run sharply above last year’s 11.45 pounds/bushel in March. End March U.S. soybean oil stocks were reported at 2.245 billion pounds, below average market expectations of 2.317 billion and near the bottom of the range of ideas of 2.250-2.351 billion pounds. Additionally, March soybean oil stocks were down from 2.306 billion pounds in February and were below year ago March stocks of 2.327 billion pounds. While far from historically low levels of March stocks, as seen in the 2nd chart below, soybean oil stocks are at the bottom of the range of stocks over the last five years for March of 2.232-2.445 billion pounds. Based on estimated exports for the month, implied domestic soybean oil usage in March was up roughly 9% from last year vs February’s 5.5% increase, with Oct-Mar marketing year-to-date domestic usage up 8.5%. USDA reported March soybean meal/hull production was 4.477 million tons vs 3.919 million in February and 4.518 million tons last year March, putting marketing year-to-date production at 26.7 million tons vs 25.9 million tons last year. Based on estimated exports, March soybean meal domestic usage was implied up roughly 4% from last year following February and January domestic usage being down 2.4% and 10.9%, respectively. Marketing year-to-date soybean meal domestic usage is up roughly 1.4% from last year.
USDA reported 420.0 million bushels of corn was used for ethanol production in March vs 334.2 million bushels in February (revised up slightly from 332.8 million initially reported) and 411.8 million last year March, reflecting the first year-over-year increase in monthly corn for ethanol usage since February 2020. This put 2020/21 marketing year-to-date (Sept-Mar) usage at 2.866 billion bushels vs 3.095 billion last year, leaving April-August usage needing to total 2.109 billion bushels vs 1.762 billion last year in order to reach the USDA’s 4.975 billion bushel annual estimate. More reflective, 2019 Apr-Aug corn for ethanol usage was 2.262 billion bushels, indicating usage from this point forward will need to run roughly 6.8% below 2019 levels in order to reach the USDA’s annual estimate. For comparison, over the last eight weeks, U.S. ethanol production has run 5.8% below 2019 levels, on average, indicating the recent production pace relative to 2019 has been sufficient to support the USDA’s current estimate, if not imply USDA is potentially a bit too low if the same production relationship to 2019 holds through the end of August. The ethanol/corn yield in March was implied at roughly 2.92 gallons/bushel vs 2.87 in February and the 2020/21 corn marketing year-to-date average of 2.90 gallons/bushel. USDA reported 1.803 million tons of DDGS were produced in March vs 1.406 million in February and 1.655 million tons last year, with corn marketing year-to-date DDGS production at 12.1 million tons vs 12.8 million tons last year.
