Fundamentally Speaking

In the January 2022 WASDE report, USDA left unchanged its projection of how many soybeans would be processed into soybean oil and soybean meal at 2.190 billion bushels (bb) but based on the latest crush report from the National Oilseed Processors Association (NOPA), that is likely to change in upcoming S&D releases.

This week NOPA reported the December soybean crush was a record 186.438 million bushels (mb) of soybeans last month, up 3.9% from the 179.462 mb in November and up 1.8% from the 183.159 mb processed in December 2020.

It was the largest ever monthly crush, topping the previous record of 185.245 mb set in October 2020 as processors had been expected to crush 184.996 mb.

This should be expected as crush margins are through roof as both board and actual cash soybean crush margins are at some of the highest levels ever, so demand for whatever soybeans are around should be intense.

This graphic shows the central Illinois soybean crush margin in dollars per bushel along with the average seen from January 2008 to January 2022 (15 years' worth of data) along with the plus and minus one and two standard deviation figures.

For the latest week the posted crush margin was $3.66 per bushel, down actually from $4.06 for the last week of 2021.

We have data going back to 1992, but essentially from August 1992 to December of 2007, central Illinois soybean crush margins were in a range from $0.30 cents per bushel on the low side to as high as $1.50 per bushel.

Since then, soybean crush margins have at times pushed sharply higher, no more so than in the fall of 2014 when they were in excess of $6.00 per bushel.

Current margins are however the second highest ever and are well above the plus two standard deviation lines.

This is rarified territory as over the past 15 years, only 2.5% or less of the time have central Illinois soybean crush margins been in excess of $3.30 per bushel.

Today, they are well in excess of that as no doubt crushers eager to get their hands on any available soybeans to capitalize on these incredibly high processing margins.

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