NOPA reported March soybean crush was an all-time record and larger than expected, while end March soybean oil stocks were lower than expected.
NOPA reported 181.4 million bushels of soybeans were crush by its members in March, notably above average market expectations of 175.2 million bushels, a solid 6.7% above last year’s March crush of 170.0 million and easily a new all-time monthly record in surpassing January’s 176.9 million bushels. NOPA March crush implies U.S. total crush for the month around 191.4 million bushels and would put Sept-March marketing year to date crush at 1.264 billion bushels vs 1.240 billion last year. Based on the USDA’s 2.125 billion bushel annual crush estimate, April-August crush would need to total 861 million bushels, 1.0% above last year’s 852 million bushels. With Jan-Mar crush up 5.8% from last year, the “needed” crush pace would appear easily achievable on face value. However, crush margins have been easing of late and have moved below year ago levels over the last week, while uncertainty exists about the likelihood/ability to continue operating at such high levels amid the widening impact of the coronavirus pandemic.
NOPA reported its members produced 2.096 billion pounds of soybean oil in March vs 1.910 billion in February and 2.000 billion pounds last year March, with the average soybean oil yield moving up to 11.56 pounds/bushel from 11.49 in February, but was still below last year’s March yield of 11.76. With the record crush, it should come as no surprise that March soybean oil production was an all-time high regardless of month, as well.
Despite the record production, though, NOPA-member soybean oil stocks fell to 1.899 billion pounds from 1.922 billion in February, going against average market expectations for an increase in stocks to 2.067 billion pounds. While still solidly above year ago March soybean oil stocks of 1.761 billion pounds, the combination of higher than expected crush and lower than expected soybean oil stocks is obviously supportive and indicative of soybean oil demand in the month being better than expected. U.S. soybean oil domestic demand has been disappointing so far in 2019/20, down nearly 8% from last year through February, led by soybean oil used for biodiesel production being down 23% for the Oct-Jan period (latest available official EIA data). However, soybean oil domestic usage other than for biodiesel has been lackluster, as well, running unchanged from last year through January. Today’s NOPA data may reflect biodiesel production moving higher in the month following the reinstatement of the biodiesel tax credit earlier in the year. Unfortunately, any such gains, if verified, may prove limited amid the sharp pullback in transportation fuel demand, although diesel demand does not appear to have been hit as hard as gasoline demand. A simple calculation of March soybean oil “offtake” among NOPA members (Feb stocks + March production – March stocks) shows an increase to 2.119 billion pounds from 2.001 billion in February and compares to last year’s 1.991 billion in March. It should be noted that, despite stocks being lower than expected, they were still the second highest for March of the last six years.
NOPA reported March soybean meal production was 4.269 million tons vs 3.911 million in February and 3.988 million tons last year March, while its members exported 974k tons in March vs 763k in February and 844k tons last year.
