The Under-21s reached the quarter-finals of the EFL Trophy last season and were only knocked out by eventual winners Bolton.
They were drawn in a group with Salford, Stockport County and Bolton for this campaign&aposs competition, but their defeat on Tuesday night condemned them to crashing out at the group stage without winning a game.
Salford won 4-3 at the Peninsula Stadium and their victory was secured after two late goals in the closing stages of the match.
The U21s looked set for a win, but they were stunned in the final minutes and manager Binnion said the defeat was disappointing.
“If you look at the goals tonight, three counter-attacks and an unnecessary error if you like,” Binnion told MUTV. “And then the other frustration, we had chances to kill that game and we were in the ascendency.
“If you look at the two teams tonight, both teams on the counter-attack, they were far better than us in those moments and that&aposs ultimately decided the game, so we&aposve got to learn from it.
“The overriding feeling is disappointment because we should have won at Stockport, we conceded in the 103rd minute, then we&aposre winning tonight and we concede penalties in the 88th and 94th minute again.
“We&aposve got to kill the game off better, but equally we&aposve got to see the game out, we should have six points and should be into the next round as opposed to having two points and not winning the game.”
Salford manager Neil Wood told the Manchester Evening News: “I&aposm just thinking about my own experiences at the academy and it&aposs a difficult competition. You can play well in periods of those matches and be under the cosh.