The USDA unexpectedly reduced the domestic carryout for both corn and beans by four days' use and the wheat carryover was left unchanged, as expected. The world soybean carryover was unexpectedly reduced by two days with corn and wheat world carryovers unchanged, as expected. That sums-up pretty much all you need to know about the price outlook for all three commodities.
Everything the USDA reported on beans yesterday was bullish. Yield was a bushel less than expected and 1.4 bushels less than last month. The harvested acres were 688,000 less than expected (35 million bushels, 14% of last month’s carryover) and demand was stronger than expected around the world. The domestic carryover was less than expected and the world carryover was less than expected. If one wants long-term staying power for a bull market, a declining world carryover gives the power. Take a look at the attached S&D and note the carryover in terms of days’ use for the past three marketing years for not only beans, but corn and wheat.