Genscape’s soybean processing outlook, released a full week ahead of the National Oilseed Processors Association (NOPA) report, directionally agreed with the NOPA release on Monday, August 15, 2016. The reports indicated a decrease in the crush rate for July compared to June, with the median market expectation for the total soybeans crushed higher than the national statistic.
On an absolute basis, the NOPA report indicated that Illinois had a substantially greater decline in processing compared to the national average, 17 percent for Illinois versus four percent nationally. Genscape reported outages equivalent to about 290,000 bushels (9,350 bpd) for the month of July at the Incobrasa facility in Gilman, IL. Additionally, there was a seven-day maintenance outage reported by CrushTraders at the Bunge facility in Cairo, IL.
Even separating these outages from the regular processing activities for Illinois, the decline in processing statewide was still 12 percent based on the NOPA statistics, indicating that there were either some additional outages in Illinois in July or the plants were running at a low level. Based on the NOPA statistics, facilities in Illinois would have been collectively running at the normal processing rate of about 75 percent of a recent high in March, if there were no additional outages.
The Southeast region of the U.S. also indicated a more substantial decrease in processing than the national rate decline, with a reduction of 12 percent from June to July. However, the Southeast indicated very strong processing rates in June, nearly a nine percent increase over May. This resulted in the processing rates reverting back to levels similar to prior months.
For analysis purposes, Genscape often separates the “normal” processing rate from outages at plants. Separating the outages from the normal rate creates a basis to assess how the plants are running regionally and nationally based on a statistical sample. For instance, the figure below shows how Genscape’s monitoring in the Indiana NOPA region compares to the reported normal processing rate.
Genscape uses a combination of remote sensing of individual plants, publicly available information, and other resources to assess outages on a real-time, daily, and monthly basis. Based on Genscape’s end of day outage report from August 25, three plants have been offline for three days or more out of the previous seven days. Two of these plant outages may not be anticipated by the market. Genscape monitoring indicated heavy truck traffic at one of these two facilities, either indicating the ready availability of beans or meal deliveries to support commitments.
Genscape has a strong representation of soybean processing plants in the Iowa, Indiana, and Minnesota NOPA regions. The product coverage is growing with additional monitoring in Illinois, beginning with the addition of the Incobrasa facility in July. Easements for monitoring have been obtained for two additional facilities in the state, and Genscape also plans to add a monitored facility in Ohio in September.
The USDA National Agricultural Statistics Service (NASS) soybean crushing statistic for July is scheduled for release on September 1 in the Fats and Oils report. On August 8, Genscape released its national outlook at 157.4 million bushels for July, an average processing rate of 5.08 million bushels per day, which was a decrease from the 5.14 bushels per day reported by USDA for June. No outages were observed from the Genscape-monitored non-NOPA facilities. If the July NOPA statistics are considered directly, the impact would be the outlook would change to 153.4 million bushels, all other things considered the same. This would translate to a national processing rate of 4.95 bushels per day.
Genscape’s Soybean Crush Report provides insight with proprietary, real-time monitoring of a strong statistical sample of the U.S. soybean processing. The report is available up to seven days ahead of the NOPA report, and up to three weeks ahead of the NASS report, providing timely, impactful data that assists our clients in making better-informed decisions. Click here to learn more about the report, or to request a copy of the full report for this month.