China Soy Crush Higher
- Chinese weekly crush for the week ended March 19th was up to 1.6 million tonnes from 1.4 million last week and compares to 1.5 million last year.
- Processors’ capacity utilization improved to 44.2% from 41% in the previous week, but well below the 60% utilization peak seen earlier this year.
- Total crush to date for 2020/21 is up 12% to 43.1 million tonnes from 38.5 million for the same period last year.
- March crush is projected at 6.9 million tonnes, compared to 4.7 million in February and 6.6 million last year.
- Soybean stocks in ports decreased slightly to 4.3 million tonnes from 4.4 million in the prior week, compared to 2.4 last year.
- Soymeal stocks were nearly unchanged from last week at 745,000 tonnes versus 441,000 last year.
FBN’s Take On What It Means: The recovery of soybean crush rates after the Lunar New Year continues to be slower than normal. There is concern about a return of African Swine Fever reducing demand, but more soy processors continue to have limited bean stocks, which is limiting crush rates. The crush rate into mid April is expected to hold relatively steady, though some plants are expected to take downtime awaiting more bean arrivals and/or better margins. As long as ASF outbreaks remain limited, expanding hog herds will continue to support China’s purchases from the US and other origins.
U.S. Export Sales Recap for the Week Ending March 18
- USDA confirmed strong corn sales with 176 million bushels sold.
- Of that total, China accounted for 153 million.
- Corn sales were within market expectations.
- Soybean sales continue to seasonally slip with four million bushels sold for old crop and only two million sold for new crop.
- Wheat sales continue to disappoint overall. The US booked about 13 million bushels with HRS and white wheat accounting for the bulk.
- Net cancellations were reported for durum as we continue to battle with Canada for market share.
- Cotton sales totaled 271 bales, down from the previous week.
FBN’s Take On What It Means: Corn sales led the way for the week but China bought across commodities. That is a plus and a signal that demand has yet to subside. We continue to expect USDA to raise its corn export outlook but have become less optimistic about wheat exports being able to hit USDA’s current target.
FBN Market Advisory services are offered by FBN BR LLC, dba FBN Brokerage, FBN BR and FBN Market Advisory (NFA ID: 0508695)
The risk of trading futures and options can be substantial and may not be suitable for all investors. Past performance is not necessarily indicative of future results.
This is not an offer or solicitation in any jurisdiction where we are not authorized to do business or where such offer or solicitation would be contrary to the local laws and regulations of that jurisdiction, including, but not limited to, persons residing in Australia and Canada.
