The market for U.S. soybean processors will become more challenging in 2024

The U.S. processing industry likely capped a successful year with another record in December, analysts said ahead of the National Oilseed Processors Association (NOPA) report due Tuesday.

NOPA members, which process about 95% of all soybeans processed in the United States, processed 193.120 million bushels last month, according to 10 analysts’ estimates.

If that happens, it would be the largest amount of soybeans processed in recorded history, surpassing the previous mark of 189.774 million bushels set in October. December processing would be up 2.2 percent from November’s 189.038 million bushels and up 8.8 percent from December 2022’s 177.505 million bushels.

The soybean processing industry has become a locomotive for U.S. agriculture as crop exports fall and grain and oilseed prices hover near multi-year lows, Reuters reported.

Thanks to abundant soybean supplies and high profit margins, the recently expanded U.S. oil refining sector has benefited from sustained demand for soybean oil for renewable fuel production. Meanwhile, a severe drought in Argentina, a major exporter of soy products, last year led to increased demand for soybean meal in the U.S.

Analysts said Argentina’s production recovery indicates that the market for U.S. refiners will become more challenging in 2024, and profitability has already begun to narrow.

Estimates for December processing ranged from 189.0 million to 197.380 million bushels, with an average of 193.2 million bushels.

The NOPA report is scheduled to be released Tuesday at 11 a.m. CST (5 p.m. GMT).

Seven analysts estimated that soybean oil stocks held by NOPA members were projected at 1.291 billion pounds as of Dec. 31. If realized, that amount would be up 6.4% from the 1.214 billion pounds held by NOPA members at the end of November.

Estimates of soybean oil stocks ranged from 1.190 billion to 1.350 billion pounds, with an average of 1.289 billion pounds.

Tags: soybean oil, soybean, USA