NOPA’s crush data for September came in lighter than expected, but was the highest total in ten years for the month of September. 136.419 million bushels of soybeans were crushed during the month, which was the first month of the new crush season. September’s crush was down 4.22% from last month but 4.75% higher than the amount crushed last September. Analysts expected the crush to come in at 138.071 million bushels according to an average of analyst estimates in a Reuters survey. Meal exports totaled 487,397 tons, up 14.17% month over month and 10.87% more than September of 2016.
Soybean oil stocks were lower than anticipated. Analysts had been expecting stocks to fall to 1.332 billion pounds. However, strong demand pulled stocks down to 1.302 billion, 8.12% lower than August and 5.38% less than September of 2016.
Cumulative bushels crushed by NOPA members during the 2016/17 season are 136.42 million. The USDA is expecting to grow the crush by 2.16% to a new record of1.940 billion bushels. The 2016/17 crush totaled 1.899 billion bushels. Through September, NOPA crush members have crushed 4.75% more soybeans than last season. This exceeds the USDA projection. However, we are only one month into the current crush season.
NOPA September Crush Data
Bean Meal Corrects as Harvest Delays Generate Volatility
Bean meal prices started to correct on Tuesday, after running up sharply in the wake of last week’s WASDE report. Bullish sentiment provided the backdrop of the recent runup, following news that bean production would be softer than expected. The Midwest bean and corn harvest has been delayed, which is provided some indecision amongst traders, which in turn has allowed some volatility to enter the market. The most recent commitment of trader’s report shows that traders squared up positions ahead of the latest USDA-WASDE report.
A few of the mid-western soybean harvest powerhouses are seeing their soybean harvest well behind the historical normal. 45% of Minnesota’s soybeans are harvested which is 37 points behind the average pace. In addition to Minnesota, Iowa and Nebraska are seeing big delays on soybeans. Iowa soybean harvest is 32% complete, and Nebraska 33% complete both 34 points behind. The delay is creating some uncertainty which has provide the back drop for profit taking.
Hedge funds seemed to square up short positions in futures and options just in time, and appear to have avoided most of the pain that would have incurred if they were short into the WASDE number. According to the most recent commitment of trader’s report released for the date ending October 10, 2017 two days before the WASDE data, managed money reduced short position in futures and options by 9.9K contracts, while increasing long position in futures and options by 1.9K contracts. Traders who are long futures and options outnumber traders who are short in the managed money category by 13K contracts, 49K to 36K.
The technicals show that prices are correcting following last week’s surge, and could fall back to support near the 10-day moving average at 321.7. Resistance is seen near the October highs at 331.8. A break of this level could lead to a test of target resistance near the July highs at 349.7. Positive momentum is decelerating as the MACD histogram is printing in the black, but the trajectory is declining which reflects consolidation. The RSI (relative strength index) is dipping after failing near 70, which also reflects declining positive momentum.
Crop Progress – Crop conditions improved for soybeans but fell for cotton and peanuts, as harvest rolls on
93% of the corn crop has dented and 51% of the crop is matured. Corn maturation is 13 points behind the 5-year average and trails last season’s pace by 19 points. The corn harvest is 11% complete, up 4 points from last week and 6 points slower than the 5-year average. Crop conditions held steady this week. 61% of the crop is rated in good to excellent condition, 26% is fair, and 13% is rated poor to very poor. Last year’s crop conditions were 74% good to excellent, 19% fair, and 7% poor to very poor. Pennsylvania and Tennessee are experiencing the best conditions, with 93%/87% in the good/ex category. South Dakota is seeing the worst. 27% of the South Dakota corn crop is rated poor to very poor and 40% good/ex. Drought conditions worsened in Iowa but improved in South Dakota. 37% of Iowa is in a moderate drought. This is up from 33% last week. 11% is experiencing severe drought and 4% is under extreme drought conditions. 72% of South Dakota remains in a moderate drought, 40% in severe, and 6% is experiencing extreme drought. Severe and extreme drought conditions improved by 4 and 1 point respectively.
63% of the soybean crop is dropping leaves, up 22 points from last week and equal to the 5-year average. The soybean harvest is currently 10% complete, a point ahead of last year’s pace but 2 points behind the 5-year average. Crop conditions improved over the past week. 60% of the crop is rated as good to excellent, 28% as fair, and 12% poor to very poor. This is a point better in the Good/Ex category. Tennessee has the best rated soybean crop, with 82% of its fields seen in good to excellent condition. Kansas is seeing the worst conditions with only 43% of the crop in good to excellent condition and 20% as poor to very poor.
Cotton bolls are opening in 57% of the fields, up 13 points from last week and 4 points below the 5-year average. The cotton harvest is 14% complete, up 3 points from last week and 5 points ahead of the 5-year average. The condition of the cotton crop moved lower. 60% of the fields are rated in good to excellent condition, 26% are rated fair, and 14% poor to very poor. This is down 1 point in the good to excellent category. Last season 48% of the cotton crop was rated good to excellent and 14% as poor to very poor. In California, crop conditions remain 100% good to excellent. South Carolina has 93% of its crop rated as good to excellent. Less favorable readings are seen in Georgia, where only 41% of the crop is rated good to excellent and 30% as poor to very poor.
The peanut harvest 12% complete, up 6 points from last week and equal to the 5-year average. The condition of the peanut crop declined over the past week. 75% of the crop is rated good to excellent, 18% as fair, and 7% as poor to very poor. Conditions fell a point in the good to excellent category and worsened two points in the poor/very poor ranking. This year’s crop condition is in much better shape than last year’s, which showed 63% rated as good to excellent and 9% as poor to very poor.
Winter wheat planting is 24% complete, up 11 points from last week but 4 points behind the 5-year average as well as last season’s pace.