Soybean crush is crushing records

In the first overnight session of 2021, soybeans were up more than 30 cents, reaching a new six and a half year high.

Last week’s export sales showed strong demand as China stepped back into the market. At the same time, supplies in South America are growing tighter. Corn and wheat also gained ground overnight.

All eyes now are on next week’s Supply and Demand Report from the USDA, and it could be explosive.

Analysts say that the bullishness is being priced in now as soybeans approach $13.50 and corn knocks on the door of $5 dollars. As the final production estimates roll in from 2020, if the bullish streak falls flat there could be a major round of profit taking.

The U.S.’s soybean crush continues its rapid pace that began last November. A University of Missouri ag economist says that the soy crush in November set a monthly record.

According to Ben Brown, “That followed the all-time monthly record in October. We came in at 181 million bushels of soybeans crushed in November. In October, it was 185.2 million bushels... very strong numbers that sets new monthly records in all three months of this marketing year so far in September, October, and November.”

He says that the outlook for soybean demand down the road is a positive one.

“When we look down the road at what could come for soybean crush, there’s a lot of potential to see that continue to strengthen,” he adds. “Now, granted, soybean prices continues to rise, which lowers that soybean crush margin, and then the inputs are becoming more expensive for those processors, but when we look at the demand side of the equation, there are a lot of positives.”

He goes on to say that overseas challenges could mean more export opportunities, especially for soybean meal, because there are not a lot of other places that have the processing capacity like the U.S.