-NOPA June soybean crush record high – higher than expected
-NOPA June soybean oil stocks lower than expected
NOPA reported June soybean crush by its members was 167.3 million bushels, solidly above the average trade estimate of 162.2 million, above the entire range of ideas of 157.0-166.0 million, significantly above last year’s June crush of 148.8 million bushels and easily setting a new record for the month in surpassing 2018’s 159.2 million bushels. May NOPA crush was 169.6 million bushels. Based on the recent relationship between NOPA crush and U.S.-wide crush, today’s data would imply total U.S. soybean crush in June around 177 million bushels, up 12.3% from last year’s 157.6 million bushels and would put 2019/20 marketing year-to-date crush at 1.805 billion bushels vs 1.735 billion bushels last year, implying July-August crush would need to be 2% below last year’s record 357 million bushels in order to not exceed the USDA’s 2.155 billion bushel annual estimate. With crush margins continuing to run below each of last six years’ levels, and well below last year, a minor reduction in crush over the last two months of the year is not hard to imagine, but margins were also weak in June, as well, and yet a new record was set. Accordingly, there’s no reason to argue with the USDA’s old crop crush projection at this time.
NOPA reported its members produced 1.933 billion pounds of soybean oil in June vs 1.958 billion in May and 1.737 billion pounds last year June. NOPA members’ average soybean oil yield in June ticked up to 11.56 pounds/bushel from 11.54 in May, but remained well below last year’s 11.67. For the 2019/20 marketing year, NOPA members have seen an average soybean oil yield of 11.54 pounds/bushel vs last year’s 11.69 during the same period.
Despite crush being well above expectations, end June soybean oil stocks held by NOPA members of 1.778 billion pounds were below average market expectations of 1.813 billion pounds and reflected a decline from May stocks of 1.880 billion pounds, as is seasonally typical. June soybean oil stocks, though, remained well above last year’s 1.536 billion pounds and were still the highest of the last four years is being slightly above 2018’s 1.766 billion pounds. A simple monthly “off-take” calculation (May stocks + June production – June stocks) reflects 2.036 billion pounds for the month of June vs 2.188 billion in May and 1.783 billion pounds last year June. Again, this is not necessarily a direct indication of demand, but moreso a transfer of soybean oil from NOPA members during the month. Based on the relationship between U.S. total soybean oil stocks and NOPA during Feb-Apr, which ran a consistent 22.6-23.7% larger, end June U.S. SBO stocks would be implied around 2.190 billion pounds vs 2.447 billion in May and 2.014 billion last year. However, last month’s May total soybean oil stocks were an uncharacteristically 30.2% larger than NOPA stocks, which would imply June stocks potentially as high as 2.315 billion pounds.
NOPA members reported producing 3.936 million tons of soybean meal in June vs 3.995 million in May and 3.494 million tons last year June and exported 835k tons of SBM in the month vs 777k tons in May and 555k tons last year June.
