While 2021/22 continues to look bullish for the soy complex, some early indications of the proverbial “light at the end of the tunnel” may be taking shape.
Thus far, soybean oil yield appears to be on the higher side of the historical range, with the most recent NOPA report pegging it at an average 11.89 pounds per bushel in October—considerably higher than a more typical figure of 11.6 pounds per bushel. This year’s dry conditions during the growing season may be at least partially responsible for this figure, which should support oil production and, ultimately, stocks rebuilding.
Along those lines, strong demand for soybean meal should also boost oil production. With lower meal yield per bushel of soybeans, more soybeans will need to be crushed to produce the same volume of soybean meal. One major supportive demand factor for soybean meal is widespread domestic tightness in the lysine market: Livestock producers will likely continue to offset some lysine in feed rations with additional meal.
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