US soy prices continue bullish sentiments

 

 

Strong demand from both exports and local processors continues to push the US soy market upward, even though South America appears on the way to a record soy crop.

 

Earlier, the National Oilseed Processors Association (NOPA) monthly crush report showed a record member crush for November of 160.3 million bushels, compared with trade expectations averaging 153.4 million bushels.

 

The November NOPA crush was up about 5 million bushels from a month earlier and up 20.8 million bushels, or a hefty 15%, from a year earlier.

 

The big crush number partly reflects pent-up demand from processors after tight old-crop soy stocks and harvest delays limited processing activity in August and September, but it also reflects strong export demand for US soymeal.

 

US soymeal export commitments for 2009-2010 are running 79% above a year earlier, helped by a drop off in Argentina's exports due to the drought-depleted 2009 crop in that country.

 

This second consecutive strong monthly crush total will boost anticipation in the market that USDA will have to raise its 2009-2010 US crush projection and cut ending stocks further.

 

There is also strong anticipation that USDA is not done raising projected US exports yet, even though a large South American crop is likely to dominate the world market during the second half of 2009-2010.

 

The strong crush number followed a better-than-expected export sales total for the week ended December 3 and reports of more new sales to China last week.

 

US soy export sales for the week ended December 3 came in at 33.8 million bushels, compared with trade expectations running roughly 22-33 million bushels. The weekly export sales total included fresh sales of nearly 20.5 million bushels to China.

 

A little more than a quarter of the way into the marketing year, US soy export sales commitments have already topped 1.051 billion bushels, or 78.5% of USDA's latest export projection of 1.340 billion bushels.

 

China has now bought more than 645 million bushels of US soy for 2009-2010 delivery. US soy are being shipped to China at a rapid pace as exporters continue to catch up after getting a slow start due to harvest delays.