US soybean crush post record Jan volume on robust demand, South American woes

New Delhi — The US soybean crush hit an all-time high January volumes and second-highest monthly level ever on robust domestic demand, coupled with tight supplies from South America, market sources told S&P Global Platts Feb. 17.

Record January crushing volumes are expected to put further pressure on the ending stocks, which are forecast at a 7-year low of 120 million bushels for 2020-21 marketing year (September–August), and thus support US soybean futures prices, analysts said.

Chicago Board of Trade’s March soybean futures were trading at $13.8688/bu at 0348 GMT Feb. 17, up 14 cents day on day.

The National Oilseed Processors Association, or NOPA, reported Feb. 16 that the January crush stood at 184.654 million bushels, up 4% year on year, beating the analysts’ average estimates of 183.087 million bu.

US soybean oil stocks were also reported at an eight-month high of 1.799 billion lb, up 100 million lb from the end of December, NOPA said. The average analysts’ estimate was at 1.763 billion lb.

The demand for soybean meal has been boosted by US meat processing industry, which uses it as an animal feed. The soybean oil demand as a feedstock has also seen a pickup due to rising biodiesel purchases.

Domestic demand for US soybean meal and oil is rising rapidly on thriving meat exports and stable crude oil usages, the US Department of Agriculture said.

As a result, higher prices of soymeal and oil are enticing crushers to process more volumes.

The value of soybean meal is climbing in step with soybean prices, the USDA said. The average price of soybean meal for all of 2020-21 marketing year (September–August) was seen at $400/short ton, up $10 from January’s forecast, it said.

Soybean oil prices are getting support from recovery in crude oil prices, the USDA said. Soybean oil prices are now 34% above the January 2020 level.

According to the USDA, US soybean crush for 2020-21 marketing year (September-August) was projected at 2.2 billion bu, compared with 2.165 billion bu estimated in 2019-20.

Tight South American Supplies

While the Brazilian crush industry has been operating below capacity on the soybean harvest delay, the ongoing troubles in Argentina has also supported the US crushing sector.

The harvest delay in Brazil, which stood at 9% of the projected acreage as of Feb. 11, compared with 20% last year, has virtually crippled the local crushing operations, analysts said.

Argentinian crushers have also been plagued by the harvest delays in Paraguay, their primary supplier during this time of the year.

In January 2021, about 13,000 mt of soybeans were imported from Paraguay, compared to 92,000 mt in January 2020 and 420,000 mt in January 2019, Argentina’s Rosario Grain Exchange said on Feb. 15. This significant drop in soy imports could be accentuated in February and March, key months in the supply of beans for processing in Argentina, BCR said.

The South American crushing operations are likely to operate below capacity in coming months on harvest delays. While Brazil’s soybean harvest pace is likely to pick up pace in March, the Argentinian harvesting activity is not expected to start before late May, analysts said.

The monthly NOPA crush report reflects the monthly activity for 13 of the largest soybean processors in the US, accounting for 95% of the country’s soybean crush.

S&P Global

Tags: soybeans, US, soybean meal, NOPA