Fundamentally Speaking

CME soybean crush margins continue to contract, off more than a dollar from the end of October high though at $2.40 per bushel still plenty profitable as that $3.40 peak a month ago is the highest soybean crush margin ever.

The fact that the margin is this high is quite unusual but what is not is the timing of this move as soybean crush margins are usually at their highest levels of the year at the end of October, coinciding with the conclusion of the soybean harvest when beans themselves are usually at one of their lowest price levels of the year.

This chart shows the five, ten and 20-year seasonality of the soybean crush margin as a percent of the annual average on the left-hand axis vs the 2022 soybean crush seasonality through November 28.

Though the five-year seasonality chart diverges somewhat over the year from what is portrayed in the 10 and 20-year seasonality, all show CME soybean crush margins attaining their highest points of the year as a percent of the annual average anywhere from October 16 to October 23, and this year's peak came right on October 23.

Seasonally, crush margins tend to contract the final month of the year which appears to be happening as cash soybeans are increasingly difficult to procure with farmers having already sold a good bit and appear willing to hold the bulk of their 2022 bushels at least until the first of the year.

Should also note that the current margin over 36% is higher than the Jan 1-Nov 28 average vs. the five-year seasonality of being 15% above the average, the ten-year seasonality being 28% above the average and the 20-year seasonal being 9% above the average.

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