crop market outlook

Extension and Outreach/Department of Economics

Crop Market Outlook

Ag ExpoMason City, Iowa

Nov. 28, 2012

Chad HartAssociate Professor/Grain Markets Specialist

[email protected]


U.S. Corn Supply and Use2008 2009 2010 2011 2012

Area Planted (mil. acres) 86.0 86.4 88.2 91.9 96.9

Yield (bu./acre) 153.9 164.7 152.8 147.2 122.3

Production (mil. bu.) 12,092 13,092 12,447 12,358 10,725

Beg. Stocks (mil. bu.) 1,624 1,673 1,708 1,128 988

Imports (mil. bu.) 14 8 28 29 100

Total Supply (mil. bu.) 13,729 14,774 14,182 13,515 11,814

Feed & Residual (mil. bu.) 5,182 5,125 4,795 4,547 4,150

Ethanol (mil. bu.) 3,709 4,591 5,019 5,011 4,500

Food, Seed, & Other (mil. bu.) 1,316 1,370 1,407 1,426 1,367

Exports (mil. bu.) 1,849 1,980 1,834 1,543 1,150

Total Use (mil. bu.) 12,056 13,066 13,055 12,527 11,167

Ending Stocks (mil. bu.) 1,673 1,708 1,128 988 647

Season-Average Price ($/bu.) 4.06 3.55 5.18 6.22 7.60

Source: USDA-WAOB


U.S. Soybean Supply and Use2008 2009 2010 2011 2012

Area Planted (mil. acres) 75.7 77.5 77.4 75.0 77.2

Yield (bu./acre) 39.7 44.0 43.5 41.9 39.3

Production (mil. bu.) 2,967 3,359 3,329 3,094 2,971

Beg. Stocks (mil. bu.) 205 138 151 215 169

Imports (mil. bu.) 13 15 14 16 20

Total Supply (mil. bu.) 3,185 3,512 3,495 3,325 3,160

Crush (mil. bu.) 1,662 1,752 1,648 1,703 1,560

Seed & Residual (mil. bu.) 106 110 130 91 115

Exports (mil. bu.) 1,279 1,499 1,501 1,362 1,345

Total Use (mil. bu.) 3,047 3,361 3,280 3,155 3,021

Ending Stocks (mil. bu.) 138 151 215 169 140

Season-Average Price ($/bu.) 9.97 9.59 11.30 12.50 14.90

Source: USDA-WAOB


Crop Conditions

Source: USDA-NASS

20253035404550556065707580

% G

oo

d to

Exc

elle

nt

Corn Soybeans


4.50

5.00

5.50

6.00

6.50

7.00

7.50

8.00

5/2

1/2

01

2

6/4

/20

12

6/1

8/2

01

2

7/2

/20

12

7/1

6/2

01

2

7/3

0/2

01

2

8/1

3/2

01

2

8/2

7/2

01

2

9/1

0/2

01

2

9/2

4/2

01

2

10

/8/2

01

2

10

/22

/20

12

11

/5/2

01

2

11

/19

/20

12

$ p

er

bu

she

l

11.50

12.25

13.00

13.75

14.50

15.25

16.00

16.75

$ p

er

bu

she

l

Corn Soybeans

Prices


Projected Corn Yields


Objective Corn Yield Data

Source: USDA-NASS


Projected Soybean Yields


Objective Soybean Yield Data

Source: USDA-NASS


World Corn Production

Source: USDA-WAOB


World Soybean Production

Source: USDA-WAOB


World Weather

Source: USDC and USDA


Hog Crush Margin

Source: ISU Extension

The Crush Margin is the return after the pig, corn and soybean meal costs.Carcass weight: 200 pounds Pig price: 50% of 5 mth out lean hog futuresCorn: 10 bushels per pig Soybean meal: 150 pounds per pig


Cattle Crush Margin

Source: ISU Extension

The Crush Margin is the return after the feeder steer and corn costs.Live weight: 1250 pounds Feeder weight: 750 pounds Corn: 50 bushels per head


U.S. Meat Production & Prices

Source: USDA-WAOB


Corn Export Shifts

Source: USDA-FAS

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2,000

9/1 10/1 11/1 12/1 1/1 2/1 3/1 4/1 5/1 6/1 7/1 8/1

Week

Mill

ion

bu

sh

els

2010 2011 2012


Soy Export Shifts

Source: USDA-FAS

0

200

400

600

800

1,000

1,200

1,400

1,600

9/1 10/1 11/1 12/1 1/1 2/1 3/1 4/1 5/1 6/1 7/1 8/1

Week

Mill

ion

bu

sh

els

2010 2011 2012


Corn Grind for Ethanol

82

84

86

88

90

92

94

96

98

100

102

104

Sep-10 Jan-11 May-11 Sep-11 Jan-12 May-12 Sep-12

Mill

ion

bu

she

ls


Ethanol Stocks

650

700

750

800

850

900

950

1000

Sep-10 Jan-11 May-11 Sep-11 Jan-12 May-12 Sep-12

Mill

ion

ga

llon

s


U.S. Blended Gasoline Consumption

Source: DOE-EIA, via USDA-ERS

7.6 bil. gal.

7.4 bil. gal.


5.80

6.00

6.20

6.40

6.60

6.80

7.00

7.20

7.40

7.60

7.80

Dec

-12

Mar

-13

Jun-

13

Sep

-13

Dec

-13

Mar

-14

Jun-

14

Sep

-14

Dec

-14

Mar

-15

Jun-

15

Sep

-15

Dec

-15

$ pe

r bu

shel

Current Corn Futures

Source: CME Group, 11/27/2012

7.02

6.005.60


12.50

13.00

13.50

14.00

14.50

15.00

Dec

-12

Mar

-13

Jun-

13

Sep

-13

Dec

-13

Mar

-14

Jun-

14

Sep

-14

Dec

-14

Mar

-15

Jun-

15

Sep

-15

$ pe

r bu

shel

Current Soybean Futures

Source: CME Group, 11/27/2012

13.72

12.5012.12


4.50

5.00

5.50

6.00

6.50

5/1

/20

12

5/1

5/2

01

2

5/2

9/2

01

2

6/1

2/2

01

2

6/2

6/2

01

2

7/1

0/2

01

2

7/2

4/2

01

2

8/7

/20

12

8/2

1/2

01

2

9/4

/20

12

9/1

8/2

01

2

10

/2/2

01

2

10

/16

/20

12

10

/30

/20

12

11

/13

/20

12

11

/27

/20

12

$ p

er

bu

she

l

10.50

11.20

11.90

12.60

13.30

$ p

er

bu

she

l

Corn Soybeans

Early Prices for 2013 Crops


Total Acreage Shift

Source: USDA-NASS


Acreage Shift by Crop

Source: USDA-NASS

Acreage change from 2011Units: 1,000 acres


Acreage Shift by State

Source: USDA-NASS

Top: Planted in 2012Bottom: Change from 2011Units: 1,000 acres


Thoughts for 2012 and BeyondSupply/demand concerns

Soil moisture issuesBiofuel and export strengthWorldwide response to drought-induced pricing

2012/13

USDA

2012/13

Futures

(11/27/12)

2013/14

Futures

(11/27/12)

Corn $7.60 $7.02 $6.00

Soybeans $14.90 $13.72 $12.50


Thank you for your time!

Any questions?

My web site:http://www.econ.iastate.edu/~chart/

Iowa Farm Outlook:http://www.econ.iastate.edu/ifo/

Ag Decision Maker:http://www.extension.iastate.edu/agdm/

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