Over the past several months we have seen a shift in the attitude of the entire commodity market. Last spring nearly the entire market was predicting large crops as acres that were abandoned the prior year were brought back into production.
In turn, this was expected to give the United States burdensome carryout totals. Since then, we have seen considerable changes to both ends of this spectrum.
While production numbers remain high, we had a sizable increase to demand over the past several months that has reduced ending stock estimates on both corn and soybeans. Corn carryout totals have decreased by roughly 30% from the initial projection.
This is actually greater than it seems and puts new crop carryout nearly equal to old crop. The change to soybean carryout was greater still with ending stocks down over 50% from the initial estimate, and it is still being tweaked lower.
The question in the market though is if this made ending stocks bullish, or just less bearish....