Argentina soybean crush slows as poor-quality beans weigh

The pace of soybean crushing in Argentina is slowing as the freshly-harvested bumper crop forces crushers to improve their dehulling of the beans in order to meet minimum protein requirements, market sources have told Agricensus.

Lower protein levels, due to the higher yields of the beans, is forcing crushers to slow operations by about 25% as they seek to achieve the minimum protein level of 45.5% in soymeal by removing more of the hull.

“The official crush for March was 2.9 million mt, versus market expectations of 3.5 million mt,” an Argentine broker said.

As a result, soyoil production in the world’s number one producer has slowed in recent weeks, at a time when the oil's flat price remains highly attractive to Indian and Chinese importers versus other soft oils.

"You crush less, you produce less soyoil," a second Argentine broker said.

And with more demand and less supply, premiums for Argentine soyoil were quick to react moving from 100 points under the July contract for June loading to 10 points under July on Tuesday.

However, the upward move on flat prices was limited, gaining just 0.5% week-on-week to $626.5/mt FOB Up River for June loading, as the underlying futures contract plummeted to a 2019 low.

At the time of writing, the July contract was trading on the Chicago Board of Trade at 28.51 ct/lb ($628.5/mt), down 2.5% on the week. 

Argentinian crushers typically import Paraguayan soybeans to blend with domestic production as they tend to have a higher protein content.