Record soybean crush adds to oilseed bullishness

by Laura Lloyd
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CHICAGO — December’s record high soybean crush of 165.38 million bus, reported by the National Oilseed Processors Association, helped feed the bull that has been running hard through most of the soy complex this week, said Jerry Gidel, chief feed grain analyst at Rice Dairy, L.L.C.

As the nearby futures contract rolled over from January to March, prices of old-crop soybeans and soybean meal, as well as soybean oil, moved higher despite a weaker corn and wheat futures market. Prices of soybeans and soybean meal have moved rapidly higher over the last few days, partly in anticipation of favorable news from NOPA. The March soybean futures contract gained 28½c from $12.94¼ a bu during the first two days of the week. Soybean oil futures have gyrated in a narrow range this week before firming slightly after the NOPA data were released.

The larger soybean crush in December reflected higher demand for soybean meal and resulted in an increase in soybean oil stocks to 1.681 billion lbs from the previous month’s 1.485 billion lbs.

NOPA data for soybean meal exports in December was especially bullish: 1,005,300 tonnes compared with 813,000 tonnes the previous month.

There will be no change in China’s policy of importing large quantities of soybeans, meal and oil from the United States, only switching to Brazil when those less-expensive supplies become available after March, Mr. Gidel said. He predicted November soybean futures prices this spring may fall from current levels around $11.25 a bu to about $10 a bu during the window when South American supplies are widely available.

He said the direction of soybean meal exports is typically the same for domestic use of soybean meal, indicating higher usage overall for the animal feed. He predicted sales of soybean meal would reach a record high in 2014.

His forecast for U.S. prices of soybeans in the next few months is in the range of $12.50@$13.75 a bu. He said continuing firm prices will attract four to six million additional acres of domestic plantings of the oilseed in 2014, totaling about 81 million to 83 million acres. That exceeds 2013, when about 76.5 million acres were planted to soybeans.
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