-August U.S. soybean crush slightly lower than expected
-August U.S. soybean oil stocks higher than expected-August corn for ethanol usage data confirms USDA annual estimate marginally too high
USDA reported U.S. soybean crush in August was 168.3 million bushels, slightly below average market expectations of 169.0 million (168.0-170.0 million range of ideas), compared to 166.3 million in July and was down 3.7% from last year’s 174.7 million. After a very strong start to the marketing year, the last seven months 2020/21 saw crush run below year ago levels given the balance sheet constraints. With August data wrapping up the official reporting for 2020/21, total crush for the year ended up at 2.141 billion bushels, right in line with the USDA’s current balance sheet reflection of 2.140 billion bushels and was down 1.1% from last year’s 2.165 billion bushels. USDA reported soybean oil production in August was 1.990 billion pounds vs 1.973 billion in July and 2.013 billion pounds last year, while the nationwide average soybean oil yield dipped to 11.83 pounds/bushel in August from 11.86 in July but remains well above last year’s 11.52 in August. Despite crush being a bit lower than expected, USDA reported nationwide soybean oil stocks were 2.184 billion pounds, which were above average market expectations of 2.123 billion pounds, near the top of the range of market ideas of 2.090-2.200 billion pounds, up solidly from 2.070 billion pounds in July, notably larger than year ago August stocks of 1.945 billion pounds and were the 2nd highest August stocks of the last 9 years, only slightly below 2018’s 2.215 billion pounds. Based on estimated August exports (official data available Oct. 5), soybean oil domestic usage for the month was implied down 7% from last year and followed July domestic usage down 6.3% and June down 8.6%. With only one month remaining in the 2020/21 marketing year, soybean oil domestic usage so far of 21.308 billion pounds is up 4.4% from last year’s 20.414 billion, but running below the USDA’s current marketing year total projection to be up 5.4% from last year. If September domestic usage is down around 7% from last year, comparable to the last three months’, marketing year total domestic usage would be around 23.080 billion pounds, 445 million pounds below the USDA’s current estimate. September domestic usage would need to be up roughly 16% from last year for the USDA’s annual domestic usage estimate to prove accurate so it strongly appears likely 2020/21 U.S. soybean oil stocks will prove larger, and possibly notably so, than the USDA’s current 1.858 billion pound estimate. USDA reported August soybean meal/hull production was 3.995 million tons vs 3.966 million in July and 4.112 million last year. Based on estimated exports, August implied domestic soybean meal usage was up 4% from last year after the previous four months averaged 5% below year ago levels. Marketing year-to-date SBM domestic usage of 34.455 million tons compares to 34.793 million tons last year, down 1%, while the USDA is currently estimating 2020/21 total domestic usage to be down 2% year-over-year.
USDA reported 417.3 million bushels of corn was used for ethanol production in August, down solidly from 448.3 million in July and only 1.5% higher than last year’s August usage of 411.1 million bushels. With official data now complete for the 2020/21 marketing year, total corn for ethanol usage of 5.028 billion bushels was slightly less than the USDA’s current balance sheet reflection of 5.035 billion bushels and was up 3.5% (171 million bushels) from last year’s 4.857 billion bushels. USDA’s data showed essentially no sorghum was used for ethanol production in August after 600k-700k bushels were used in June and July. The average ethanol/corn yield in August ticked down to roughly 2.91 gallons/bushel from 2.94 in July, which was right in line with average yield achieved during the 2020/21 corn marketing year. USDA reported 1.827 million tons of DDGS were produced in August vs 1.970 million in July and 1.807 million tons last year, putting 2020/21 corn marketing year total DDGS production at 21.55 million tons vs 20.42 million tons last year.
