Are US officials too upbeat on the amount of soybeans being processed by domestic crushers?
The National Oilseed Processors Association industry group appeared to hand a, modest, victory to soybean bears on Friday by pegging the US crush last month at 157.71m bushels.
While above the 156.13m bushels crushed in November – a reflection of the extra day in the December – the figure was a little below the 157.81m bushels that investors had expected.
It was also comfortably beneath the 165.38m bushels processed in December 2014 and, coming at a time when many investors have doubts over US crush prospects, stoked ideas of a downgrade ahead to the US Department of Agriculture estimate for volume processed in the full 2015-16 marketing year.
What was interesting was that the Nopa data for last month showed an accelerated pace of decline, said Rich Nelson, chief strategist at Chicago broker Allendale.
"The pace of decline for December was 4.6%, year on year," Mr Nelson told Agrimoney.com.
"For November the pace was 3.1% behind."
Assuming a year on year lag of even 2% in the crush pace for the rest of the marketing year, to the end of August, would imply a 26m-bushel downgrade to the US Department of Agriculture forecast that crushers will process 1.89bn bushels of soybeans over the season.
"The USDA may not cut at that at once" in its February Wasde world crop supply and demand briefing, which offers a monthly reassessment of crop estimates, Mr Nelson said.
But after in the January Wasde cutting the estimate for soybean exports in 2015-16, by 25m bushels to 1.69bn bushels, "in the February report, the USDA will have to cut the crush".
And, after all, export prospects for soybean products – soymeal, the high protein feed ingredient, and soyoil, used in food and biodiesel – "look like an issue" given that Argentina, the top shipper of both, is back on song in ag export markets, following reforms by the country's new government.
Besides cutting or ditching export on ag shipments, the government has liberalised the peso, resulting in a near-40% downgrade against the dollar, so making Argentina's exports much more competitive.
Already, US soymeal export commitments – ie, volumes shipped and unfulfilled orders combined – for 2015-16 are, at 6.19m tonnes, down 17% year on year.
That said, soyoil export commitments are, at 591,200 tonnes, up 7.5% season on season so far.
US soybean crush so far in 2015-16 by month and (year on year change)
September: 126.704m bushels, (+27%)
October: 158.895m bushels, (+0.6%)
November: 156.134m bushels, (-3.1%)
December: 157.711m bushels, (-4.6%)
A far stronger start to the season this time, thanks to comparison with a September 2014 when low soybean stocks left crushers with little grist for their mills, means that the cumulative Nopa crush, at 599.4m bushels, is still running 2.6% ahead of that a year ago.
"Many people may be getting too pessimistic on the crush," Jerry Gidel, chief feed grains analyst at broker Rice Dairy, said.
"The crush is not going to go down as much as people think," he said, highlighting growth in US livestock herds, meaning potentially extra domestic soymeal needs, and the weather damage to palm oil output prospects which have left many buyers scouting for alternative vegetable oils.
(Mr Gidel is also sanguine on US soybean exports, saying that comparing the pace of shipments to the five-year average pace, rather than to volumes a year ago, suggests that a 25m-bushel downgrade by the USDA on Tuesday to its forecast was unwarranted.)
As to which is right, the initial market reaction to Friday's Nopa data was certainly to extend losses in Chicago soybean futures, with the March contract standing 0.8% lower in the aftermath, and testing its 40-day moving average at a little above $8.75 a bushel.
However, the contract then revived in late deals to stand back where it had been before the statistic – albeit in a market where external market conditions, such as oil and share prices, are having such an impact on values.
While the USDA may end up raising its estimate for US soybean inventories at the close of 2015-16 back to 460m bushels, "in terms of pricing, that may not make that much of a change" to futures trading in a range of $8.50-9.00 a bushel, Mr Nelson said.
"It may be they end up more towards the lower end of the range."
Mr Gidel took a more phlegmatic attitude.
"All that people really seem to care about at the moment is the price of oil."
By Mike Verdin