Members of the National Oilseed Processors Association (NOPA) posted the highest soybean crush volume on record for May at 171m bushels, up 4.6% YoY. As a result, the USDA is forecasting a 20% YoY fall in US soybean ending stocks for 2021/2022, at 5.6 MMT. This was driven by strong crush margins in May, which reached $2.35/bu. While margins have now returned to normal levels of around 70 cents on lower soybean oil and meal prices, the long-term outlook remains positive for US soy processors. There is growing US demand for soybean oil as a feedstock for biofuel. At a Federal level, the EPA recently raised total biofuel blending requirements for 2022 by 10.7% YoY to 20.63 billion gallons. Soy processors are working to increase capacity, with around 14 new plants reportedly set to come online in the next few years and three existing plants announcing increases to crushing capacity. With domestic crushing demand set to rise and margins still healthy, this could drive lower soybean exports out of the US going forward provided no sharp increase in prices takes place. The US has exported 41.3 MMT of soybeans so far in the 2021/22 marketing year (September-August), down 16.3% YoY. Panamax volumes saw the largest decline in this period, falling 19.6% YoY to 31.4 MMT. Supramax volumes comparatively only fell by 1% to 8.7 MMT.

Germany, the Netherlands and Austria have announced plans to restart several coal power plants, as Europe prepares for a potential winter without Russian natural gas. Germany will temporarily bring back up to 10.6GW of idled coal, oil, and lignite capacity. The Netherlands has removed a 35% cap on coal-fired power plant utilization. Meanwhile, Austrian authorities will convert the Mellach gas-fired power plant back to coal, although it will initially remain on standby. European governments have been stockpiling coal since Russia’s invasion of Ukraine. The EU imported 11.6 MMT of coal in May, up 56.8% YoY. Imports have remained strong so far this month, at 7.6 MMT. If shipments continue at current rates, June imports will total 12.6 MMT. Shipments of Russian coal to EU ports have already started to slow, ahead of a full EU ban from 10 August. Imports have averaged 66,700 tons per day so far in June. This is down 46% on last month’s average and 17% lower YoY. Securing additional coal will be challenging. The US has been unable to maintain the three-fold YoY increase in shipments to the EU seen in April due to limited mining and rail capacity. EU imports of US coal fell 32.7% MoM in May to 20.9 MMT. Australia, which has accounted for 23% of EU June imports, is currently experiencing domestic power shortages. Last week, the New South Wales government invoked powers that will allow it to ban coal exports if the situation worsens.