October 15, 2020 | FBN Insights | Kevin McNew

Lower World Veg Oil Values Weigh on Soy Complex

Crush is expected down 2.6% from the 165.1 million bushels in August

September Soy Crush Expected Lower 

  • The National Oilseed Processors Association (NOPA) report will be released this morning at 11am CT.
  • The average estimate for September soybean crush is 160.8 million bushels of last month, the lowest monthly level in a year.
  • Crush is expected down 2.6% from the 165.1 million bushels in August,  but up 5.4% from September of last year.
  • If as expected, it would still be the largest crush for the month of September on record.
  • NOPA soyoil stocks at the end of September are projected at 1.412 billion pounds. 
  • Soyoil inventories are expected to be down from 1.519 billion pounds last month and below 1.442 billion pounds at the end of September 2019.

FBN’s Take On What It Means: September is typically among the least active months for soybean processing plants as crushers often schedule maintenance downtime as they await newly harvested beans. NOPA has reported a drop in September crushings from August in eight of the last 10 years and this year is likely to be similar. The U.S. domestic meal market remains firm due to strong animal numbers and crush demand remains supportive to bean prices. 

French Crop Forecasts Lowered 

  • France's farm ministry lowered its corn crop estimate to 12.7 million tonnes from 13.3 million previously and compared to last year’s 12 million.
  • The ministry projects ending stocks at 2.2 million tonnes, down sharply from previous expectations of 3.1 million. 
  • Corn stocks would still be slightly above last year’s 2 million tonnes.
  • The soft wheat crop forecast was slightly lowered to 29.2 million tonnes and is down sharply from last year’s record 39.6 million tonnes.
  • Projected exports to non-EU countries were trimmed to 6.4 million tonnes compared to 6.4 million last month, and 7.4 million last year.
  • Wheat ending stocks for 2020/21 were forecast at 2.6 million tonnes versus 2.9 million last month and 3 million last year.

FBN’s Take On What It Means: The French corn crop forecast was not as bad as some had anticipated as greater area partially offset lower yield. The market has been expecting a steep drop in wheat exports in the July 2020 to June 2021 marketing year after France's wheat production fell by nearly 25% this year due to adverse weather. Algeria, France’s largest wheat customer, has changed its import specs to allow Black Sea origin wheat, and with Russia’s crop projected at 83 million tonnes there is probably not much opportunity for the U.S. to capture that business. 
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