-July NOPA soybean crush notably lower than expected
-July NOPA soybean oil stocks sharply higher than expected
NOPA reported its members crushed 155.1 million bushels of soybeans in July, significantly below average market expectations of 159.1 million bushels, even below the entire range of ideas of 156.2-164.0 million and a considerable 10.2% (17.7 million bushels) below last year’s 172.8 million. More importantly, based on the recent relationship between NOPA crush and U.S. total crush, nationwide July soybean crush would be implied around 164.6 million bushels vs 161.7 million in June and 184.5 million last year, which would put 2020/21 marketing year to date (Sept-July) crush at 1.971 billion bushels vs 1.990 billion last year. Based on the USDA’s 2.155 billion bushel annual crush estimate, August crush would need to be 184 million bushels vs last year’s 175 million, a 5.6% increase, clearly a highly unlikely situation with each of the last six months’ crush running well below year ago levels and 9-11% below last year in the two most-recent months. Accordingly, if we assume August crush down 8% from last year, 2020/21 total crush would be 2.131 billion bushels, 24 million bushels below the USDA’s current estimate with another downward revision in the USDA’s estimate expected in the September WASDE report.
NOPA reported its members produced 1.835 billion pounds of soybean oil in July vs 1.798 billion in June and 2.005 billion pounds last year, with the average soybean oil yield among NOPA members in July rising to 11.83 pounds/bushel from 11.80 in June and remaining well above last year’s 11.60. Impressive, the soybean oil yield in July was the highest for the month in seven years and third highest on record for the month.
Despite crush being well below expectations, NOPA reported end July soybean oil stocks held by its members jumped to 1.617 billion pounds from 1.537 billion in June, sharply above average market expectations of 1.505 billion pounds (1.435-1.606 billion range of ideas) and were essentially unchanged from last year’s July stocks of 1.619 billion pounds. The combination of lower than expected crush and higher than expected soybean oil stocks obviously implied July soybean oil usage was considerably less than anticipated. Specifically, implied soybean oil “off-take” (last month’s stocks + this month’s production – this month’s stocks) of 1.756 billion pounds declined sharply from 1.931 billion in June (1.951 billion average during April-June) and was a massive 408 million pounds below last year’s 2.164 billion pounds. It will be very interesting to see USDA’s nationwide July soybean oil stocks data when released on September 1 as June stocks were an unusually large 36.6% larger than NOPA stocks vs the 27.7% average difference of the prior three months. If a similar difference to June data is seen again, July total soybean oil stocks would be implied around 2.208 billion pounds vs 2.123 billion last year, while a 27.7% difference would imply stocks around 2.065 billion pounds.
NOPA reported its members produced 3.699 million tons of soybean meal in July vs 3.617 million in June and 4.080 million tons last year, while exporting 720k tons of soybean meal in July vs 715k in June and 876k tons last year.
