November-March is the U.S. oilseed industry’s strongest season for crush, and this year it kicked off early, with October crush coming in at 153.5 million bushels, the largest in three years – up almost 9% from 2011 – and above trade expectations, according to data from the National Oilseed Processors Association (NOPA). The average trade estimate was 144.4 million bushels, up 21% from September and 2% from a year earlier, according to a Dow Jones Newswires survey before the NOPA data were released. But the range of estimates was unusually wide, 127.2-152.5 million bushels.
The large October crush was driven by profitable crush margins, big soymeal exports and reduced soybean protein content. The NOPA October soymeal yield of 47.27 lbs./bu. was down almost a percentage point from a year earlier and was the lowest in three years, although it was still above the five-year average. “What we are hearing is that protein content was better in the early beans because they came from the southern states which were outside the worst of the drought, and then worsened [as harvest progressed, especially in the western Corn Belt],” Tom Hammer of NOPA told Brock Associates. “Our members each have their own ways of dealing with variability in the beans by adjusting their grind – for instance removing more moisture would leave a higher protein content."
“The industry is doing quite well right now. Our members were pleased soybean yields were not as poor as expected given the drought, although the strong bean exports are reducing the supply available to domestic crushers,” Hammer says. “However, meal exports also are showing very good volume. The first half [of the marketing year] may be so strong that the second half doesn’t hold up.”
NOPA-member soymeal exports soared by 116% from a month earlier and nearly 42% over a year earlier, hitting 819,786 short tons (743,697 metric tons).
Solid crush margins should keep U.S. soybean processors competing with exporters for supplies. Soy futures crush spreads are generally running between 60 and 70¢/bu. out through most of 2013. This should help ensure U.S. bean carryout remains tight at the end of 2012-2013.
Editor’s note: Richard Brock, Corn & Soybean Digest's marketing editor, is president of Brock Associates, a farm market advisory firm, and publisher of The Brock Report.