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Commentary

US soybean crush for October hit a new record high at 215.78 million bushels. Pre report estimates were from 209.5 to 212.0 million bushels. So, in my view the numbers are friendly versus expectations, well above the average trade guess at 210.9 million. The October average is 193.72 million bushels. US soybean crush pace for October hit a new all-time record high at 6.96 million bushels.

US soybean oil stocks in October came in at 1.486 billion pounds versus 1.501 last month and 1.520 billion pounds the average trade guess. This number is also friendly versus expectations. The average stock level for this time of year is 1.970 billion pounds. The largest stock level for this month was 2.094 (2022) and lowest was 1.502 (2023). Current stock levels are running at 0.10% of USDA ending stocks estimates for the year. Bean Oil demand continues to be robust. Last week’s holiday delayed sales saw a whopper sales number of 124K metric tons, with 47K going to India alone. Those are monster sales, and this market has a possible story with global vegetable oil short. The problem is that the new Trump admin is seen not friendly to renewables where the advancement of bio diesel usage domestically, or the lack thereof on bio diesel policy is outweighing bullish fundamentals globally in my opinion. 

Last Friday, the day after Thanksgiving, saw soybean sales for future shipment total 2.491 million metric tons. This was a high for the marketing year while topping the high end of estimates for the second straight week. This follows flash sales into China of 840K tons to unknown destinations (China) and another sale of 151K sales to “unknown” released Friday as well that will show on these Thursdays sales. Today, saw another flash sale announcement of 134,000 metric tons of soybeans for delivery to China during the 2024/2025 marketing year. Good demand should be buoying prices for beans and meal, yet prices struggle. The issue is that there is a monster of a crop being grown in Brazil, and without a weather premium built, the crop could be significantly higher than last year in the amount of 15 to 20 million metric tons more, a whopper of a number and easily a record crop.  If realized, it would be seen as bearish but keep in mind its early. Planting is 92 percent complete in Brazil and over 50 percent complete in Argentina. We could see funds short cover in beans and meal ahead of next week's WASDE amid strong demand in the sector while it's still way too early to declare a bumper crop in S.A. with planting still ongoing. Funds are short 81K beans and 75K meal. The soymeal short is 2K from the record short. Bean oil last week saw major unwinding with funds unwinding 21K longs and adding 11K short, putting the net long at just 23K. 

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Sean Lusk

Vice President Commercial Hedging Division

Walsh Trading

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