NOPA reported that its membership crushed 138 Mil Bu during the month of June which was 5 Mil Bu under expectations and 7 Mil Bu less than a year ago. Based on the NOPA data, we estimate a total US soybean crush rate of 147 Mil Bu. The USDA recently lowered their estimate for the annual US soybean crush 1,900 Mil Bu, but following a disappointing June crush, the USDA’s annual forecast could still be 20-30 Mil Bu too large. Note that monthly crush totals since February have been below a year ago, but to reach the USDA’s annual forecast, July and August crush figures each need to be well over last year. Crush spreads at the CME are similar to a year ago and above average at 86.5 cents/bu, while cash margins are mixed. According to the IL Processors Report, average IL margins are estimated at $1.07/bu, while the IA Processors Report shows an average of $.70/bu.
June export inspections were reported last week at just over 59 Mil Bu – 167% of a year ago and the Census Bureau data is expected to confirm that June exports were at or very near a record large total for the month of June. Based on these estimates for trade and processing, we estimate that beginning of the month July soybean stocks totaled 760 Mil Bu, an 11% increase over last year and the largest July 1 stocks figure since 2007. Stocks at decade old highs has kept basis across the Midwest negative as processing and exporting business have not had any problems procuring soybeans. The CBOT today in recent weeks has largely been focused on yield and crop size, and waiting on NASS’s first yield estimates in the August crop report. Once that data is available, the market will then turn attention to demand prospects for the coming year. With an uncertain weather outlook and key reproductive periods still ahead, we are not anxious sellers of new crop beans under $10.
