Highlights
The USDA increased the size of the 2021 soybean crop by 30 million bushels which put the September 1 soybean inventory 32 million bushels higher than the market expected.
Since there is no way for the market to predict what USDA will do with production numbers for the past three years, “finding” or “losing” 30 million bushels of production is rather unsettling. The inventory USDA stated to be on hand September 1st for corn and beans is the 2021 crop marketing year carryout and the 2022 crop year carryin. If one assumes the increased carryin for the 2022 crop marketing year (ending 31 August 2023) is not consumed in the next eleven months, new crop carryout is increased by 2.5 days to a 19 day supply because the US uses 12 million bushels a day. With harvest barely started and so many unknowns this early in the marketing year, it is laughable to say the increased supply of beans is what caused November beans to settle 46 cents lower yesterday. A 19 day supply of soybeans projected before harvest should have users of bean meal and oil unable to sleep at night.