NOPA-member crush in April totaled a disappointing 139.1 Mil Bu. This is down 14 Mil Bu from March, 9 Mil from April of last year, and down some 5-6 Mil Bu from trade expectations. ARC notes that NOPA crush rates have failed to match year-ago levels for three consecutive months, and without a boost in the last part of the crop year a downward revision to annual crush is likely. Census crush in April is pegged at 146 Mil Bu, and so an average pace of 161 Mil Bu is need per month to validate the USDA’s current outlook. ARC chooses not to the change crush from the USDA’s forecast currently, but will revise crush 10-15 Mil Bu lower if May’s NOPA number is similarly weak. Spot crush margins have gotten a boost in recent weeks, and in C IL are calculated at $.90/Bu, vs. $.65/Bu in April, but also this compares to $1.05/Bu on average in May, and the incentive to expand monthly crush rates is not robust.
However, while bearish soybean prices, soy complex products maintain support through today’s session. Soy oil stocks at the end of April totaled 1,725 Mil Lbs, vs. 1,815 Mil in March and 1,943 Mil a year ago. This is at the lower end of spring soy oil inventories over the last decade, and a bullish oil outlook is advised on break until more is known about US biofuel policy and potential changes to import tariffs on biodiesel from Argentina and SE Asia. Monthly US soy oil stocks tend to seasonally erode in July, but the process appears to have begun several months earlier than normal. Domestic US soybean consumption may be overstated marginally, but soy oil stocks will remain tight through summer, and potentially test the 2014/15’s stocks level by Jun-Jul. Crude’s rebound is also noteworthy as US crude inventories continue to fall.
