corn & soybean outlook webinar - purdue agriculture · 2019-04-01 · corn & soybean...
TRANSCRIPT
April 1, 2019
Corn & Soybean Outlook Webinar
Michael Langemeier, Associate Director, Center for Commercial Agriculture
James Mintert, Director, Center for Commercial Agriculture
Corn & Soybean Outlook Webinar, April 1, 2019
USDA’s Planting Intentions & Grain Stocks Reports Surprises• Corn Stocks larger than expected
– USDA’s March 1 estimate, 8.605 billion bushels
– 270 million bushels larger than average pre-release estimate
• Corn Planting Intentions larger than expected
– USDA estimated 92.792 million acres
– 1.46 million acres more than average pre-release estimate
• Soybean Planting Intentions smaller than expected
– USDA estimated 84.617 million acres
– 1.55 million acres below average pre-release estimate
Corn & Soybean Outlook Webinar, April 1, 2019
9092949698
100102104106108
Sep Oct Nov Dec Jan Feb Mar Apr
Weekly Ethanol Production% of Previous Year
Corn & Soybean Outlook Webinar, April 1, 2019
5
15
25
35
45
55
65
SepOctNov DecJan FebMar AprMay Jun Jul Aug
MMT Corn Export Commitments
'16/17
17/18
'18/19
Corn export commitments are
down about 8% so far this year,
but USDA only has them down
3%. On April 9, USDA will likely
drop exports 25-75 million
bushels.
Corn & Soybean Outlook Webinar, April 1, 2019
3% 2% 3%1%
29%
13%
1% 0% 0%4%
0%
5%
10%
15%
20%
25%
30%
IN IL IA MN ND SD NE MO OH USSelected States & U.S.
Corn Acreage Change from 2018 to 2019Planting Intentions, U.S. & Selected States
Corn & Soybean Outlook Webinar, April 1, 2019
-4%
-3%
-6% -6%-6%
-8%
-5%-6%
-1%
-5%
-9%-8%-7%-6%-5%-4%-3%-2%-1%0%
IN IL IA MN ND SD NE MO OH USSelected States & U.S.
Soybean Acreage Change from 2018 to 2019Planting Intentions, U.S. & Selected States
Corn & Soybean Outlook Webinar, April 1, 2019
CornCurrentUSDA
3/8/2019
“Expected”USDA
4/9/2019
92.8 Million176.0 Bu./Ac
USDA 3/29/2019
USDA17/18 18/19 18/19 19/20
Carry In 2,293 2,140 2,140 1,985Production 14,609 14,420 14,420 15,000Total Supply 16,939 16,600 16,600 17,025Feed & Residual 5,304 5,375 5,300 (-75) 5,500FSI Non-Fuel 1,451 1,465 1,465 1,490FSI Fuel (Ethanol) 5,605 5,550 5,525 (-25) 5,600Export 2,438 2,375 2,325 (-50) 2,425Total Use 14,799 14,765 14,615 (-150) 15,015Ending Stocks 2,140 1,835 1,985 (+150) 2,010US Farm Price $3.36 $3.55 $3.50 (-.05) $3.50
$3.35-$3.75
Corn & Soybean Outlook Webinar, April 1, 2019
-636
1 3 9 31 35 59 69142
-700-600-500-400-300-200-100
0100200
China
Taiwan
S. Korea
Japan
Africa
Mexico
Other Asia
Argentin
a
Europe
Million Bushels
2018 crop sales compared to 2017 crop sales:As of 3/21/2019 (latest data)
China Purchases Down 636 Mill Bu. or -60%Rest of World Up 317 Mill Bu. or +40%Net U.S. Decline Down 319 Mill Bu. or -19%
Change In U.S. Soybean Sales, 18/19 Vs. 17/18as of 3/21/19
Corn & Soybean Outlook Webinar, April 1, 2019
10
20
30
40
50
60
Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug
Milli
on M
etric
Ton
s
'16/1717/18'18/19 Soybean export sales are currently
running 19% behind last year and USDA has them down only 14%. Expect some revision downward on 4/9/2019---we are using 15 million bu. down. However, China bought 29 million bu. (announced 3/29/2019) and there is still major uncertainty over a China trade deal
Soybean Export Commitments: Exported + Outstanding Sales
Corn & Soybean Outlook Webinar, April 1, 2019
Soybeans USDA3/8/2019
“Expected” USDA4/9/2019
84.6 Mill. Ac 49.5 Bu./Ac
USDA 3/29/2019USDA17/18 18/19 18/19 19/20
Carry in 302 438 438 907
Production 4,412 4,544 4,544 4,147Total Supply 4,735 5,002 5,002 5,079Seed & Residual 113 127 125 (-2) 125Crush 2,055 2,100 2,110 (+10) 2,135Exports 2,129 1,875 1,860 (-15) 2,030Total Use 4,297 4,102 4,095 (-7) 4,290
Ending Stock 438 900 907 (+7) 789Farm Price $9.33 $8.60 $8.60 (=) $8.80
$8.10-$9.10
$3.60
$3.80-$3.85
May 19 Corn Futures: Barchart.com
Dec 19 Corn Futures: Barchart.com
$3.95-$4.00
$3.84
$8.50
$9.50
May 19 Bean Futures: Barchart.com
$9.00
$9.60
Nov 19 Bean Futures: Barchart.com
Corn & Soybean Outlook Webinar, April 1, 2019
109
197
303
152
236
322287
331
387
$0$50
$100$150$200$250$300$350$400$450
Low Average HighLand Productivity Category
Corn Soybeans Overhead
2019 Estimated Contribution Margins in Indianafor Rotation Corn and Soybeans vs. Overhead Costs Per Acre
Contribution Margin = Return to Land, Labor, Machinery & Mgmt.
Corn & Soybean Outlook Webinar, April 1, 2019
What is My Cost of Production?Illustrated Below: High Productivity Soil
Cost Category Rotation Corn Rotation Soybeans
Land (Fixed) $1.26 $4.06
Fertilizer (Variable) $0.70 $0.95
Machinery (Var. and Fixed)
$0.58 $1.68
Seed (Variable) $0.53 $1.03
Pesticides (Variable) $0.28 $0.77
Labor (Fixed) $0.21 $0.66
Sub-Total of 6 Major Costs $3.56 $9.15
Total Cost per Bushel $4.10 $9.91
Source: Purdue Crop Cost & Return Corn & Soybean Guide, March 2019
Corn & Soybean Outlook Webinar, April 1, 2019
-$200
-$100
$0
$100
$200
$300
-$200
-$100
$0
$100
$200
$300
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Historical and Projected Earnings per Acrefor Corn and Soybeans in West Central Indiana
Corn Soybeans
Source: West Central Indiana Case Farm
Corn & Soybean Outlook Webinar, April 1, 2019
-$150
-$100
-$50
$0
$50
$100
$150
$200
$250
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018P 2019P 2020P
Difference in Earnings per AcreWest Central Indiana (Corn Minus Soybeans)
Corn & Soybean Outlook Webinar, April 1, 2019
-0.100-0.0500.0000.0500.1000.1500.2000.2500.3000.3500.400
07 08 09 10 11 12 13 14 15 16 17 18P 19P
Operating Profit Margin RatioWest Central Indiana Case Farm
Annual Average
Corn & Soybean Outlook Webinar, April 1, 2019
Current Projections for Corn and Soybean Returns Look Weak
Reasons:
1. Return to normal yields
2. Higher fertilizer prices
3. Large carryover’s projected for corn and soybeans
4. No expectation for another round of trade assistance payments (MFP)
5. Payments arising from 2018 Farm Bill expected to be small
Marketing Strategies
Take advantage of spring planting rallies
Be wary of possible basis weakness this summer
April 1, 2019
Next Crop Outlook WebinarJuly 2, 2019
More info & register atpurdue.ag/webinar