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Rising US Soybean Crush Set to Face off with Argentine Supplies into 2025
Owen Li
U.S. soybean meal exports are predicted to notch a third consecutive record in the upcoming 2024-25 marketing year...
U.S. soybean meal exports are predicted to notch a third consecutive record in the upcoming 2024-25 marketing year despite the recovery of top meal exporter Argentina from last year's apocalyptic soybean harvest.
Additionally, recent expansion in U.S. soybean processing has facilitated the boom in meal exports, but the shipment rates are seen rising more quickly than those for crush.
The U.S. Department of Agriculture last week pegged U.S. soybean meal exports at a record 15.7 million metric tons (17.3 million short tons) for the 2024-25 marketing year beginning Oct. 1, up 9.5% from 2023-24, the biggest annual export rise in seven years.
That outpaces 8% export increases in each of the previous two marketing years, though domestic crush was up an average of 2% annually in those two seasons. U.S. crush is seen rising 5.4% in 2024-25.
U.S. soymeal exports have been especially prominent since the second half of 2022-23 as Argentina's soybean crop in early 2023 was decimated to half-normal levels by a historic drought. That held Argentina's 2022-23 crush and meal exports to 18-year lows.
Harvest on Argentina's 2023-24 soybeans crossed the halfway mark last week, and although the crop potential is lower than originally expected, output should be nearly double the year-ago levels, possibly reaching five-year highs.
As such, USDA estimates 2023-24 Argentine crush and meal exports up 17% and 18% on the year, respectively, and 2024-25 crush and exports are set to rise another 13% and 12% to four-year highs.
That could impede U.S. meal export expansion, but luckily for U.S. shippers, competition from Brazil may be less fierce. Brazil's crush and meal shipments are seen relatively steady into 2025 as the top soybean exporter focuses on raw bean shipments to China.
Crush capacity has risen over the last several years in major soybean meal importers, particularly in Asia, the Middle East and North Africa. When soybeans are cheap, these countries may prefer processing the beans domestically instead of importing meal, which was seen a few years ago.
That could be limiting to global meal exports, though if U.S. supplies are abundant due to strong processing levels, U.S. meal could be cheap enough to be both attractive for importers and competitive with South America.
USDA sees average U.S. cash soymeal prices at $330 per short ton in 2024-25, a five-year low and down 13% on the year. Most-active Chicago meal futures settled at $371.70 on Wednesday, about 14% lower than a year ago but up 15% from the year's low.

Robust U.S. Crush?

As U.S. soybean processing expands, so has its share of total U.S. soybean use. USDA expects that share at 56% in 2024-25, matching 2023-24 for the largest since 2007-08. China's increasing preference for Brazilian soybeans has also swung U.S. soy use away from exports and toward crush.
But despite record volumes, U.S. crush in recent years has not fully lived up to expectations.
Between 2017-18 and 2020-21, final U.S. soybean crush was higher than what USDA initially projected, but it has been lower in the subsequent three marketing years. The agency currently has 2023-24 crush down fractionally from the initial forecast.
Last month, U.S. soybean processing among NOPA members, responsible for about 95% of U.S. crush, failed to reach a monthly record for the first time this marketing year. April crush of 166 million bushels was far below the trade guess of 183 million, notching a three-year low for the month.
Several plants were down for scheduled maintenance last month, but soybean crush margins have been much lower than in the past couple of years, potentially impacting crush and crush expansion. Soybean product prices have hit multiyear lows this year, with soybean oil hit hard by disappointing movement on the renewable fuels front.Rising US Soybean Crush Set to Face off with Argentine Supplies into 2025_1

Source: Reuters