August 15, 2011

US soy crush rate to slow

The soy crush pace in the US National Oilseed Processors Association's July report is expected to persist with the slower trend observed in the last few months, according to a survey of industry analysts.

Slumping profit margins for processors and lagging export demand for US soy products enticed crushers to scale down operations.

Estimates for the report ranged from as low as 115.3 million bushels to as high as 119 million bushels. In June, the crush was measured at 117.7 million bushels.

The NOPA report includes figures only from member processors.

"The report is expected to confirm the continuation of the trend of slowing crush rates, reflective of less profitable margins for the soy crushing industry," said the president of Chicago-based research firm AgResource Co.

Export competition for soymeal and soyoil from cheaper South American supplies, tempered crush operations, particularly with processors faced with the issues of paying higher prices for cash US soy supplies.

Many processors scaled down crush activity, awaiting cheaper supplies from the autumn harvest as well as less competition from Brazil and Argentina soy products in the fall.

NOPA soyoil stocks in July are expected to decline to 2.55 billion pounds from 2.588 billion pounds in June. Estimates ranged from as low as 2.43 billion pounds to as high as 2.746 billion pounds.

The lower crush pace in July is expected to draw down soyoil stocks. Soyoil inventories continue to avoid significant decline in stockpiles amid year-over-year improvement in processing yields and slower export demand.