The National Oilseed Processor Association (NOPA) issued October soybean crush and stocks data on Friday, November 15. According to the data, NOPA member soybean processing in the first month of the 2019/20 product (October-September) marketing year was record large at 4.774 million tonnes. This was up nearly 0.622 million tonnes from September and compares to the previous monthly record set last October at 4.691 million tonnes.
According to analysts’ expectations published by Reuters, the trade was looking for crush to come in near 4.544 million tonnes with the highest guess slightly below the actual at 4.708 million tonnes. There was a wide range of guessing from polled analysts, with some respondents suggesting that crush could come in as low as 4.286 million tonnes. There was some idea that freshly harvested soybeans may have needed to undergo some additional drying between coming off the farm and running through the crush process, but these data suggest that this was not an issue.
The timing of the much stronger data comes just one week after the U.S. Department of Agriculture (USDA) slashed its U.S. crushing forecast by 0.408 million tonnes to 57.289 million in the 2019/20 marketing year, and while it is far too early to draw any conclusions about the remainder of the marketing year, these data suggest that perhaps the reduction was premature. Despite ample U.S. supplies, crush margins have remained depressed in recent months due in part to the recent African swine fever (ASF) outbreak that has curbed Asia’s demand for soybean meal. This has capped the financial incentives for U.S. soybean processors much below elevated levels experienced last year in the wake of the drought that greatly reduced Argentina’s 2017/18 soybean crop to just 37.8 million tonnes and brought increased demand U.S. soybean meal. Lower crush margins in recent months have brought doubts that U.S. soybean crushings could grow by nearly 1% from record levels in 2018/19 to reach earlier ideas, but the surge in crushings reported by NOPA suggest that earlier forecasts may be more attainable than were previously thought.