(Agrimoney) – Soybean prices eased, underperforming grain futures, after industry data showed the US crush last month falling well short of expectations, failing to set a record as investors had expected.
Soybeans for January stood 0.6% lower at $10.41 ½ a bushel in late deals in Chicago, where corn futures were flat, and wheat up 2%.
The easing followed data from the National Oilseed Processors Association showing that US plants crushed 161.21m bushels of soybeans in November, a figure up 2.1% on the October performance and up 0.7% year on year.
Indeed, it was the best November performance ever.
However, the figure fell short of the 165.40m bushels that investors had expected, a result which would have been the record, narrowly beating the 165.38m bushels processed in December last year.
Premium built in
The data represented a “disappointment” for a market which has “been building a premium into prices”, Jason Rose, at US broker US Commodities, told Agrimoney.com.
It could also be a reflection in the high prices of soymeal, one of the main soybean processing products, with soyoil, in prompting demand rationing.
“Buyers are looking at alternatives when prices are high, and buying pretty hand to mouth,” Mr Rose said.
Prices of distillers’ dried grains, or DDGs, an alternative high protein feed ingredient to soymeal rose 13.5% to $109.50 a bushel in the four weeks to November 21, according to Iowa State University.
Exporters vs processors
However, at Chicago-based Rice Dairy, Jerry Gidel urged against gloom at the data, saying that it could reflect logistical challenges, and the strong demand between domestic buyers and importers for US soybeans.
“We still had issues about getting soybeans both out to export channels in the Gulf and getting them to US processors,” Mr Gidel said.
Separate data on Monday showed US soybean exports totalling 1.82m tonnes last week, taking the total so far in 2014-15, which started in September, to 25.57m tonnes, up 22% year on year.
Besides, US industry could be operating near the limits of its capacity.
“When did we last build a processing plant – 30 years ago? South America was meant to be supplying the world with soy processing products,” whereas in fact Argentine supplies have been curtailed by a reluctance to sell by farmers who see crops as a hedge against high inflation and a falling peso.
US plants may also have been tempted to slow output by the squeeze on soybean supplies, thanks to a delayed harvest and relatively low prices.
