The National Oilseed Processors Association’s (NOPA) soybean crush for October was 4.22 million tonnes, which was 27,200 tonnes below trade expectations. The October soybean oil yield was the second highest for that month, only surpassed by the record high oil yield in 2005. NOPA’s soybean oil stocks for the end of October were 53,500 tonnes above the previous month and 19,100 tonnes above last year. This implies Census soybean oil stocks back above 1.36 million tonnes and suggests that the usage of soybean oil in biodiesel production dropped further during October from September’s steep drop.

It appears that the market is putting a squeeze on biodiesel producers to maintain soybean stocks closer to 1.36 million tonnes. There also are indications that U.S. soybean oil exports could be larger than analysts’ forecast of 635,000 tonnes because of recent sales to China.

U.S. soybean export inspections so far this marketing year have been lagging in total and also individually to the EU-27 and China. However, cumulative marketing year inspections have been large enough to support industry export estimates of a 27.2 million tonnes for 2007-08.

The year-over-year declines in U.S. soybean exports are not because of erosion in world import demand, but because of increased South American competition. September and October U.S. exports were 20 percent below last year and Brazilian shipments were 6 percent below last year while Argentine exports tripled that of last year. The vast majority of Argentina’s soybean exports go to China, which more than offset the reduction in U.S. shipments to China so far this marketing year.

Record large U.S. export commitments to China suggest that U.S. soybean exports to China should pick up as Argentina’s export pace diminishes, but Argentine exports look like they will be strong again in November. While soybean import demand for the EU-27 and the rest of the world is flat, those areas are importing considerably more soybean meal this year.

For the third consecutive month, USDA did not increase its soybean yield forecast, instead trimming that yield by 0.0067 tonnes per hectare to 2.77 tonnes per hectare. USDA’s 2007 U.S. soybean yield has changed very little from the 2.79 tonnes per hectare yield that USDA first released at its March outlook conference. That yield was maintained in USDA’s May, June and July supply and demand reports and also was NASS’s first survey-based yield in the August crop report. Subsequent survey-based yields were 2.78 tonnes per hectare in September and October and 2.77 tonnes per hectare in the November crop report.

The stability in USDA’s 2007 yield forecasts, which actually extends as far back as a year ago when the 5-year baseline forecasts were put together, is quite remarkable. The 0.0134 tonnes per hectare change in USDA’s yield from August to November is the smallest since a 0.0067 tonnes per hectare change in 1997. In that year, USDA cut its yield by 0.0201 tonnes per hectare in September and took it back up by 0.0134 tonnes per hectare in October. The change from August to November has averaged 0.1277 tonnes per hectare over the last 20 years and 0.2353 tonnes per hectare over the last 5 years.

Unlike USDA’s corn yield change in November that usually portends another change in the same direction in January, there is no relationship between November and January soybean yield changes. Thus, there is little reason to have a bias one way or the other as to whether the crop will be larger or smaller in USDA’s annual crop report on January 11. Yield changes from November to January typically are 0.0336 tonnes per hectare or less, but are prone to be just as large in years when yield changes up to that point were small as when the preceding yield changes were large.

Barring an unanticipated breakthrough agreement between Senate Majority Leader Harry Reid (D-Nev.) and Minority Leader Mitch McConnell (R-Ky.), as of publication it appears Congress will break for a two-week Thanksgiving recess without reopening the farm bill debate.

The two sides continue to be worlds apart on both the number and scope of any amendments that would be offered as part of the debate. Democrats reportedly would like to limit each side of the aisle to offering amendments in single- or low double-digits. They also want to require that those amendments be germane to the underlying farm bill. Republicans bridle at both limited and germane amendments, calling instead for an “open process,” whatever that means.

Both the clock and Senate rules are working against moving the farm bill through that chamber in 2007. If the situation remains in gridlock before the Thanksgiving recess, the Senate will have a maximum of just three weeks to approve the legislation when Congress reconvenes Dec. 3. Competing with the farm bill for senators’ attention at that time will be a number of appropriations measures and other must-have bills.

So the farm bill debate increasingly looks like it will be continued into 2008. If Congress cannot agree on new legislation early in 2008, the possibility of at least a short-term extension of current legislation becomes increasing likely.

The soy complex closed mixed on November 15, with soybean meal posting gains and soybean oil dropping on lower petroleum prices. Soybean futures managed to hold steady despite a stronger U.S. dollar, lower corn futures and lower outside markets. Soybean and product futures were little changed overnight. Soybean futures have gained on corn this week, putting soybeans in a better position to regain U.S. acres next year, but farmers are months away from finalizing their 2008 planting decisions.January bean futures closed down $0.28, finishing at $396.37; March gained $0.09, closing at $402.06; and May was up $0.28, ending at $403.53. December meal increased $1.21 closing at $323.53; January was $1.21 higher, finishing at $325.62; and March meal closed up $1.65 ending at $330.25.84. December oil closed $8.60 lower to finish at $984.57; January was down $9.92, closing at $993.61; and March lost $10.36, closing at $1004.20.

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