Have small U.S. soybean supplies finally been rationed?
“The USDA now projects the domestic crush of soybeans during the current marketing year at 1.66 billion bushels, 2.5 percent less than the crush of last year,” Good said. “Unlike the export projection, the projection of the domestic crush has increased as the marketing year progressed and the pace of the crush exceeded the projected rate. The current projection is 100 million bushels larger than the November 2012 projection.”
Good said that the Census Bureau no longer provides monthly soybean-crush estimates so the market relies on estimates of the monthly crush by members of the National Oilseed Processors Association (NOPA) to monitor the pace of the crush.
“Those estimates showed a year-over-year increase of 9.6 percent in the first quarter of the marketing year and 7.0 percent in the second quarter,” Good said. “The crush during the third quarter of the 2012-13 marketing year, however, was 7.5 percent less than during the same quarter a year ago. To reach the USDA projection for the year, the crush during the last quarter of the year needs to be 19.7 percent less than during same quarter last year. The NOPA estimate for the size of the domestic crush during June is scheduled for release on July 15. That report will provide a very important indication of whether the pace of crush is slowing enough to maintain pipeline supplies by year end,” he said.
Good added that it now appears that soybean and soybean product prices will have to remain strong through the final quarter of the 2012-13 marketing year in order to limit consumption to the available supply.
“The USDA estimate of June 1 stocks of soybeans to be released on June 28, will provide an important benchmark for verifying the supply of soybeans available for export or crush during the final quarter of the marketing year,” Good said. “As reported last week, the magnitude of March 1 stocks and estimates of consumption in the March-May quarter should result in a June 1 stocks estimate near 438 million bushels. Any substantial surprise in the size of that estimate could mean that the pace of consumption would have to slow even more than calculated here, or that supplies are more abundant than projected,” he said.