Genscape currently has a significant independent monitoring presence in all six of the National Oilseed Processors Association’s (NOPA) reporting regions. Current crushing margins stand at greater than $1 per bushel, which is the strongest for 18 months according to the CME Group, and has incentivized soy processors to add capacity and, in a few cases, build new plants. The U.S. soybean crush capacity is expected to increase by at least 120 million bushels per year of soybeans by 2019, according to Reuters. This is up close to five percent from the existing capacity of an estimated 1.9 billion bushels per year. Genscape is committed to building out the coverage as new plants come online.
Genscape added 10 new plants to our Soybean Production Monitor in 2017 to expand its coverage. As of October 25, 28 plant monitors have been installed and incorporated into reporting to our clients, including Cargill’s Wichita, KS, facility. The addition of this facility serves to improve Genscape’s industry-leading NOPA estimates and makes the daily Soybean Processing Shutdown report more robust.
Cargill announced in October 2015 that they planned to invest more than $50 million to upgrade and increase the capacity of this soybean processing plant, on top a building a biodiesel plant with an annual capacity of 60 million gallons, in the same area. The upgrades included the plant’s processing equipment, automation and controls, utilities, and more. By the completion of the project in January 2018, the company expected to increase oilseed production by 30 percent, bringing up the total crushing ability to approximately 104,000 bushels per day from 80,000 bushels per day. Genscape's daily soybean processing production data creates a discernibility of the trends and unplanned or unexpected outages that can help anticipate localized or national price shifts.
The Construction Timeline
After installing an infrared camera near the Wichita facility in January 2017, Genscape saw multiple shutdowns occur over the summer related to the facility construction.
One of the initial observed shutdowns occurred on June 28 when the plant shutdown, and remained down until August 1. On July 7, there was a second baghouse added to the previous one installed, which reduces air pollution. The connecting pipe to the surge bin was not added until July 25. A surge bin allows inconsistent flows to be accumulated or metered. Four days later, on July 29, Genscape saw that the plant shut and was down while the remainder of the construction took place. A large crane was brought in to help carry out the work on July 30.
In mid-August there were small signs of activity, though not seemingly production at the plant. On August 17 a pipe close to the desolventizer toaster dryer cooler (DTDC) building flared up and three days later a small exhaust pipe flared up, neither indicating production on their own. On August 24, the bean elevator showed activity, along with heat from the two baghouses, indicating some production from the plant. This outage lasted 58 days.
Image may be NSFW.
Clik here to view.
On September 18, the cooling structure of the DTDC unit had been disabled. A few weeks later, the removal of the DTDC unit was observed from October 10-16. The DTDC was likely moved south of its previous location, based on crane movement. Genscape has seen continual construction efforts, including cranes, trucks and other equipment.
Image may be NSFW.
Clik here to view.
After more construction was observed during the fall, Genscape sent out a field team to the facility in order to better understand the construction and operational status of the plant. The team drove out to the facility to investigate and take visual and infrared images of the facility. After a lengthy review of the images and an analysis of the infrared (IR) imagery derived from the installed cameras pointed directly at the plant, Genscape’s analysts saw that large scale work had been done and there were signs that the plant was operational. Genscape then officially added the Wichita facility to the Soybean Processing Monitor in October 2017.
Image may be NSFW.
Clik here to view.
Even in December, large cranes remained at the facility, indicating ongoing construction. There are signs that the plant is producing while continuing developments take place.
Image may be NSFW.
Clik here to view.
As the construction of new facilities continue and overall production increases, receiving timely data and alerts will be crucial to understanding current market conditions. By using unbiased, third party monitoring techniques to gather data on soybean processing facilities and leveraging our own unique model, Genscape is able to accurately estimate crush rates each month. The Soybean Crush Report shares visibility into unplanned or expected outages to anticipate localized or national price shifts. This type of information can benefit customers in their daily analysis of market opportunities. To learn more, or to request a free trial of Genscape’s Soybean Production Monitor, please click here.