Monday's soy crush data eyed
The bean market finishes the week on a mixed note, as bull spreads dominated the markets action today.
This activity kept the old-crop contracts in the green, while pressing the new crop into the red. Old-crop beans continue to find support on a tight cash situation, due to strong demand from soy crushers and continued export demand.
The crush demand will move to the front of the trade’s attention Monday as the NOPA monthly crush number will be released at 11:00 Central time. The trade is looking for crush to come in at 118.1 million bushels. The trade estimates ranged from 110 million to 126 million bushels. The April crush came in at 120.113 million bushels. If the average guess for May is correct at 118.1 million bushels, it would be 15% lower than last year. A 15% cut in crush sounds like a lot, but it still needs to slow down even more. If the trade estimate for the May crush is correct, it would mean the September through May crush would still total 2.7% over last year due to the very strong early season rates. If the crush does not slow dramatically over the next few months, we could see soybean ending stocks estimate revised a little closer to 100 million bushels from the 125 latest estimates. USDA helped out a little on Wednesday as they moved their crush estimate up from 1.635 to 1.660 billion. They think crush will end 2.5% lower than last year.
One way to solve the problem would be to import meal from S.A. But for this to work, U.S. meal prices need to move high enough to make imports work, pricewise, and we are not there yet. We could also import beans and crush them (some soy crushers are currently doing this) but with only 1/3 of the NOPA bean crushing facilities in the South and Southeast, it will be hard for them to bring in enough beans to meet the crush shortage.
Monday’s crush number will have an impact on the old crop beans next move, while weather will impact the direction of the new crop. The current forecast is for three shots of rain for the Midwest, over the next 10 days, and this will continue to cause producers problems trying to get the rest of the crop in. The trade is looking for beans planting to have reached the 85% to 90% level, for next Monday’s report. In addition to the crush report and weather we also have the Grain Stocks and Planted Acreage report out on June 28.