-January U.S. soybean crush slightly higher than expected
-January U.S. soybean oil stocks in line with expectations-No surprises in January corn for ethanol usage data
USDA reported U.S. soybean crush in January was 196.5 million bushels, slightly larger than the average trade estimate of 195.6 million bushels (195.0-196.1 million range of ideas) and up marginally from December crush of 193.1 million bushels, which was revised down slightly from the originally-reported 193.8 million bushels. As has been the case in each month so far in 2020/21, January crush reflected another new record for the month in beating last year’s previous January record of 188.8 million bushels. January data put Sept-Jan marketing year-to-date total crush at 948 million bushels, up 5.6% from last year’s 898 million bushels. Based on the USDA’s 2.200 billion bushel annual crush estimate, Feb-Aug crush would need to total 1.252 billion bushels, a 1.2% decline from last year’s 1.267 billion – certainly an achievable rationing job in relation to past tight balance sheet years which saw late year demand rationing, but it would be much better to see the needed slowdown begin sooner than later. Each month that sees crush run solidly above year ago levels will only increase in severity of the needed rationing job later in the marketing year. U.S. soybean oil production in January was 2.309 billion pounds, up solidly from 2.233 billion in December and 2.154 billion pounds last year January as the U.S. average soybean oil yield jumped to 11.75 pounds/bushel in Jan vs 11.56 in December (11.58 average Oct-Dec) and last year’s January yield of 11.41 pounds/bushel. Such a large single-month increase in oil yields is quite odd, but the same situation was reflected in NOPA-member data for January released in mid-February. USDA reported end January U.S. soybean oil stocks were 2.306 billion pounds, in line with the average trade estimate of 2.315 billion pounds (2.219-2.351 billion range of ideas). However, a bit of a negative slant should be taken regarding Jan SBO stocks as they were still in line with expectations despite December stocks being revised down a rather notable 108 million pounds to 2.111 billion (originally 2.219 billion), in effect implying January demand was lower than expected. Year ago January soybean oil stocks were comparable at 2.356 billion pounds. Based on estimated exports, January domestic soybean oil usage was implied down roughly 5% from last year after Oct-Dec domestic usage ran 12.4% above year ago levels. USDA reported January soybean meal/hull production was 4.666 million tons vs 4.541 million in December and 4.426 million tons last year January, with end January meal/hull stocks at 556k tons vs 359k in December. Based on estimated exports, January implied domestic soybean meal usage was down nearly 6% from last year and followed December domestic usage down 4%, while Oct-Nov domestic usage was up nearly 11% year-over-year.
This month’s data included the USDA’s annual revisions for all monthly data for 2020, but didn’t really include anything all that exciting. In next week’s WASDE report, due to today’s annual revisions, 2019/20 soybean oil ending stocks will be bumped up to 1.853 billion pounds from 1.849 billion currently, while marketing year total soybean oil and soybean meal production saw little to no change. Total changes to monthly crush data in 2019/20 were immaterial enough to leave marketing year total crush at 2.165 billion bushels as currently reflected in the USDA’s balance sheet.
USDA reported 415.8 million bushels of corn was used for ethanol production in January, down from 430.4 million in December and a substantial 54 million bushels less than last year’s 469.5 million bushels in January. Through the first five months of 2020/21, total corn for ethanol usage of 2.114 billion bushels is down 137 million bushels from last year’s 2.250 billion, leaving March-August usage needing to total 2.836 billion bushels vs last year’s 2.602 billion in order to reach the USDA’s 2020/21 annual estimate of 4.950 billion bushels. Keep in mind, last year during the three-month April-June period, corn for ethanol usage reflected a 432 million bushel demand loss relative to the previous year so there is no doubt a significant year-over-year gain will be posted for those months. On the other hand, we estimate February corn for ethanol usage may potentially be 100 million bushels below year ago levels given the impacts of the mid-month deep freeze so reaching the USDA’s current marketing year target is far from assured. Updating our calculations taking today’s data into account, we estimate U.S. ethanol production will need to average roughly 949k barrels/day from this point forward in order to reach the USDA’s 4.950 billion bushel annual corn demand target vs the 6-week average, for the period prior to the deep freeze, of 938k bpd and last year’s 834k bpd average during March-August. Ethanol/corn yields remain solid, with January’s estimated 2.94 gallons/bushel ticking up from 2.93 in December and comparing to 2.93 in January last year. For the Sept-Jan period, ethanol yields have averaged 2.90 gallons/bushel, in line with last year. USDA reported 1.753 million tons of DDGS were produced in January vs 1.787 million in December and 1.950 million tons last year. The USDA’s annual revisions for 2020 were immaterial with 2019/20 total corn for ethanol usage still in line with the USDA’s current 4.852 billion bushel balance sheet reflection.
