Most market analysts were expecting USDA to lower the S. American crop size due to the recent bout of excessive rainfall, and that is precisely what they got. Argentina’s crop was lowered to 56.5 million metric tons.

Also, the total acreage here in the US going to beans, along with what USDA projected to be the average yield were lowered. USDA dropped acreage to 81.4 million acres with yields projected at 46.7 bushels per acre. Total crop size was estimated to be 3.8 billion bushels. Most analysts were looking for a number closer to 3.778 billion. Last year’s crop was 3.929 billion.

It was the ending stocks or carryover that was the big mover however.

Exports were the big factor in today’s report for soybeans as USDA added 145 million bushels to its expected total for the marketing year. That brought total projected exports to 1.89 billion bushels. The end result was that projected carryover was cut all the way down to 305 million bushels. Last month USDA estimated that same number to be 445 million bushels. Most analysts were looking for a bit tighter number on the carryover but their average was 428 million. USDA come in with a number 123 million bushels lower than that!

This is coming from ideas that with smaller S. American crops, more business will be coming to the US bean market.

Beans finally broke out of the tight trading range that they have been stuck in with market bears getting obliterated by the shocker of an export number. Beans are currently limit up as I type these comments.

Chart_16-05-10_10-08-40Chart_16-05-10_10-10-19

The chart is powerful as some are now going to start talking about even more business coming to the US bean market due to the recent strength in the Brazilian Real against the US Dollar.

Chart_16-05-10_10-04-33

We will see whether they can hold the limit heading into the close. The bids are getting hit at the moment.

Comments (1)

Dan,
Would love to hear what you have to say about today’s reversal in gold, silver, and the HUI. I seem to remember not so long ago, we had pretty much the same situation in the oil market where the hedgies were owning an enormous position on the long side, and you were very concerned. Could this be a similar situation?
Jim

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