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US soybean crush pace accelerates as margins hit record highs
CoBank links the faster crush to higher soybean oil prices after the EPA set the renewable volume obligation in March and notes U.S. soymeal exports are at record levels.
CoBank said in a July 8 quarterly update that US soybean crush is moving at record monthly paces as soybean crush margins hit highs. The firm attributed the acceleration to changes in renewable policy, saying that after the EPA finalized the renewable volume obligation in March, soybean oil prices rose and boosted the economics of crushing soybeans into oil and meal.
On a marketing year-to-date basis, CoBank reported total soybeans crushed are up 8% year over year, with the pace repeatedly reaching monthly records. The update also pointed to additional support for biofuel feedstocks, noting that high diesel prices followed a US-Israeli attack on Iran, which helped lift demand and pricing for soybean oil.
CoBank said record soymeal exports and stronger soymeal feed demand have further supported the crush. It added that old-crop soybean exports are lagging due to the absence of Chinese demand, but reports of new-crop purchases by Chinese state-owned firms are raising hopes for a more normal trade pattern.
Looking ahead, CoBank flagged weather as a key driver for yields, with emerging heat in the US Midwest raising concerns about soybean production. It said September weather during flowering will be most critical for crop productivity, and it also warned of potential implications for corn, noting that US corn exports are holding a record pace even as corn planting acreage is lower, and that the US winter wheat harvest is expected to be the smallest since 1965 due to rain after a historic drought.
Latest closeWheat $664.75 ▲0.7%|Corn $481.00 ▲6.5%|Soybeans $1,219.75 ▲0.9%