Posted on 11/1/2021 3:29:35 PM by Randy Mittelstaedt
-September soybean crush marginally higher than expected
-September soybean oil stocks slightly below expectations, but higher than USDA estimate
-September corn for ethanol usage as expected – near year ago
USDA reported September U.S. soybean crush was 164.2 million bushels, marginally above the average trade estimate of 163.6 million, but well within the range of ideas of 168.2-171.0 million bushels and down from 168.3 million bushels in August and 4.0% below last year’s September crush of 171.1 million. Seasonally, crush typically jumps sharply in October as new crop supplies become available so next month’s data will be very interesting to see following the last eight consecutive months in which crush ran below year ago levels. For reference, last year’s October crush 196.6 million bushels, not only a record for the month, but also the all-time record for any month. USDA reported U.S. soybean oil production in September (the last month of the 2020/21 marketing year) was 1.938 billion pounds vs 1.990 billion in August and 1.968 billion pounds last year, putting 2020/21 total production at 25.023 billion pounds, slightly above the USDA’s current balance sheet assumption of 24.980 billion pounds. The U.S. soybean oil yield in September was 11.81 pounds/bushel vs 11.83 in August and 11.50 last year, with the 2020/21 yield averaging 11.73 pounds/bushel vs 11.46 in 2019/20, the highest in eight years and 2nd highest on record. USDA reported end September U.S. soybean oil stocks (2020/21 ending stocks) were 2.177 billion pounds, marginally below average market expectations of 2.190 billion pounds (2.136-2.210 billion range of ideas) and little-changed from 2.184 billion pounds in August but, more importantly, well above last year’s 1.853 billion pounds, higher than the USDA’s current old crop ending stocks balance sheet assumption of 2.063 billion and will be the highest U.S. soybean oil ending stocks in nine years. In fact, U.S. soybean oil ending stocks have not exceeded 2.0 billion pounds since 2011/12. With today’s data, USDA will be raising their 2020/21 soybean oil ending stocks by 114 million pounds in the upcoming November 9 WASDE report. Pending official export data, September domestic soybean oil usage was implied up nearly 3% from last year after June-August domestic usage averaged 6.9% below year ago levels. 2020/21 marketing year total domestic usage is estimated at 23.289 billion pounds vs the USDA’s current balance sheet assumption of 23.350 billion pounds and the previous year’s 22.317 billion. USDA reported September soybean meal/hull production was 3.868 million tons vs 3.995 million in August and 4.009 million tons last year, putting 2020/21 total production at 50.565 million tons vs the USDA’s current balance sheet estimate of 50.604 million. With end September soybean meal/hull stocks reported at 341k tons (USDA 400k in their balance sheet), September domestic usage was implied up 1% from last year, putting 2020/21 total domestic usage at roughly 37.622 million tons (pending official export data) vs USDA’s current 37.450 million ton estimate and the previous year’s 37.967 million tons.
USDA reported 407.5 million bushels of corn was used for ethanol production in September, a bit below August’s slightly downwardly-revised 414.2 million bushels and nearly unchanged from September usage in the previous two years of 401.5 million and 405.7 million bushels, respectively. With one month of official data now in the books for 2021/22, corn for ethanol usage during October-August will need to total 4.792 billion bushels in order to reach the USDA’s current 5.200 billion bushel estimate, a 3.6% increase from last year’s 4.626 billion bushels during the 11-month period. While still only a near-term situation, the strength in ethanol production in recent weeks, averaging +16% year-over-year during the last three weeks, could very well prompt USDA to raise their annual usage estimate in the November 9 WASDE report. A 100 million bushel increase to 5.300 billion bushels would imply corn for ethanol usage needing to run roughly 5.7% above year ago levels from this point forward, likely a more plausible assumption for 2021/22 for now. USDA reported essentially no sorghum was used for ethanol production again in September, resulting in the calculated ethanol/corn yield for the month coming in around 2.87 gallons/bushel vs the 2.93 average over the previous four months and the 2.91 average for the 2020/21 corn marketing year. U.S. DDGS production in September was 1.761 million tons vs 1.827 million in August and 1.746 million tons last year.
