FALLING SOYBEAN CRUSH RATIOS CUT OUTPUT
  The sharp decline in soybean crush ratios
  seen in the last few weeks, accelerating in recent days, has
  pushed margins below the cost of production at most soybean
  processing plants and prompted many to cut output of soybean
  meal and oil.
      The weekly U.S. soybean crush rate was reported by the
  National Soybean Processors Association this afternoon at 21.78
  mln bushels, down from the 22 mln bushel plus rate seen over
  the past two months when crush margins surged to the best
  levels seen in over a year.
      Active soymeal export loadings at the Gulf had pushed
  soybean futures and premiums higher, prompting a pick-up in the
  weekly crush number.
      However, much of that export demand seems to have been met,
  with most foreign meal users now waiting for the expected surge
  in shipments of new crop South American soymeal over the next
  few months.
      U.S. processors are now finding domestic livestock feed
  demand is very light for this time of year due to the milder
  than normal winter, so they steadily dropped offering prices in
  an attempt to find buying interest, soyproduct dealers said.
      Soybean meal futures have also steadily declined in recent
  weeks, setting a new contract low of 139.70 dlrs per ton in the
  nearby March contract today.
      "Many speculators down here bought March soymeal and sold
  May, looking for no deliveries (on first notice day tomorrow,
  which would cause March to gain on deferreds)," one CBT crush
  trader said.
      "But they've been bailing out this week because the March
  has been acting like there will be a lot delivered, if not
  tomorrow, then later in the month," he added.
      As a result of the weakness in soymeal, the March crush
  ratio (The value of soyproducts less the cost of the soybeans)
  fell from the mid 30s earlier this month to 22.6 cents per
  bushel today, dropping over five cents in just the last two
  days.
      The May crush ended today just over 17 cents, so no
  processors will want to lock in a ratio at that unprofitable
  level, the trader said. Hopefully, they will now start to cut
  back production to get supplies in line with demand, he added.
      With futures down, processors are finding they must bid
  premiums for cash soybeans, further reducing crush margins.
      A central Illinois processor is only making about 30 cents
  for every bushel of soybeans crushed at current prices, down
  sharply from levels just seen just a few weeks ago and below
  the average cost of production, cash dealers said.
      Most soybean processing plants are still in operation, with
  little talk of taking temporary down-time, so far. But
  processors will start halting production in the next few weeks
  it they continue to face unprofitable margins, they added.