Tuesday morning at 11, the USDA released the May Supply Demand Report. The corn numbers were maybe a little friendly but corn seemed to follow beans higher. Corn managed to close 10-12 cents higher. The USDA dropped corn carryover for this year from 1.862 billion bushels to 1.825 billion. New crop corn carryover came in a bit below expectations at 2.153 billion bushels. The USDA left corn acres this year unchanged at 93.6 million acres with a crop projection of 14.43 billion bushels. With the huge rally in bean prices you have to think some of those corn acres might be switched to beans, especially in areas of the Midwest where it has been too wet to get the corn planted.

After the USDA report, beans spent the rest of the day flirting with limit up. By the close beans posted gains of about 57 cents. Projected old crop bean carryover came in 28 million bushels less than expected at 400 million bushels. The projected carryover for the 2016-17 year was the huge shock to the market. The average guess was for a carryover of 427 million bushels while the USDA came in at 305 million. That is a carryover decrease of 122 million bushels. That is one of the largest misses on bean carryover I can remember! About a month ago some of the bears were talking about a carryover approaching 600 million bushels. We will have to see some follow through but it seems like this was a "game changer."

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