US harvest delays trigger soybean shortages at crushing plants

Persistent rains across the US Midwest are delaying the soybean harvest and have already created localized shortages of raw material for crushing plants. Old-crop stocks are running down while new-crop soybeans are reaching the market more slowly, forcing some facilities to scale back processing.

Processors have sharply raised premiums for immediate deliveries. Cargill in Sioux City offered as much as $1/bu over November CBOT futures for prompt delivery, while Bunge in Council Bluffs raised its premium to as much as 85 cents/bu.

The situation is complicated by the fact that many farmers are still unable to benefit from the higher prices. Heavy rainfall has left fields too wet for machinery and slowed natural crop dry-down, pushing harvest timing back by several weeks in some areas.

The shortage is also affecting soybean products. Some plants have reduced production of soybean meal and soyoil, while October CBOT soybean meal futures climbed to a life-of-contract high and traded at a premium to December futures.

The supply squeeze comes as US processors are targeting record crush volumes. USDA forecasts soybean crush at 2.78 bln bushels this season, supported by strong demand for soyoil from the biofuel sector.

Tags: soybean, USA