The soybean market continues to be supported from by strong demand from both the export sector and U.S. processors even though South America appears on the way to a record soybean crop.
Monday’s monthly crush report from the National Oilseed Processors Association (NOPA) showed a record member crush for November of 160.3 million bushels, compared with trade expectations averaging 153.4 million bushels
The November NOPA crush was up about 5 million bushels from a month earlier and up 20.8 million bushels, or a hefty 15%, from a year earlier.
The big crush number partly reflects pent-up demand from processors after tight old-crop soybean stocks and harvest delays limited processing activity in August and September, but it also reflects strong export demand for U.S. soymeal.
U.S. soymeal export commitments for 2009-2010 are running 79% above a year earlier, helped by a drop off in Argentina's exports due to the drought-depleted 2009 crop in that country.
This second consecutive strong monthly crush total will boost anticipation in the market that USDA will have to raise its 2009-2010 U.S. crush projection and cut ending stocks further.
There is also strong anticipation that USDA is not done raising projected U.S. exports yet, even though a large South American crop is likely to dominate the world market during the second half of 2009-2010.
Monday’s strong crush number followed a better-than-expected export sales total for the week ended Dec. 3 and reports of more new sales to China last week.
U.S. soybean export sales for the week ended Dec. 3 came in at 33.8 million bushels, compared with trade expectations running roughly 22 to 33 million bushels. The weekly export sales total included fresh sales of nearly 20.5 million bushels to China.
USDA reported sales of another 12.56 million bushels of soybeans to China in its daily export announcements last week.
A little more than a quarter of the way into the marketing year, U.S. soybean export sales commitments have already topped 1.051 billion bushels, or 78.5% of USDA’s latest export projection of 1.340 billion bushels.
China has now bought more than 645 million bushels of U.S. soybeans for 2009-2010 delivery.
U.S. soybeans are being shipped to China at a rapid pace as exporters continue to catch up after getting a slow start due to harvest delays.
Weekly export shipments for the week ended Dec. 3 totaled 76 million bushels, with 53.3 million of those bushels headed for China.
Monday’s weekly export inspections report for the week ended Dec. 10 showed soybean inspections of 53.6 million bushels with 42.9 million of those bushels headed for China.
China’s National Grain and Oilseed Information Center expects record soybean imports of 4.8 million metric tons (176.4 million bushels) of soybeans during December. Nearly all of those soybeans will come from the U.S.
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.