fall 2016 crop outlook center for commercial ag webinar 9 ... ·...
TRANSCRIPT
Fall 2016 Crop Outlook Webinar September 13, 2016
Fall 2016 Crop Outlook Webinar
Chris Hurt, Professor & Extension Ag. Economist
Michael Langemeier, Professor & Associate Director
James Mintert, Professor & Director
Fall 2016 Crop Outlook Webinar, September 13, 2016
164.7
171 174.4
100
110
120
130
140
150
160
170
180
90 92 94 96 98 00 2 4 5 6 7 8 9 10 11 12 13 14 15 16
Corn Yield: 1990-2016
Fall 2016 Crop Outlook Webinar, September 13, 2016
9.9 9.5
9.0
10.1
11.8 11.1
10.5
13.1
12.1
13.1 12.4 12.4
10.8
13.8 14.2
13.6
15.1
7
8
9
10
11
12
13
14
15
0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16
Billion
s Corn ProducEon
Fall 2016 Crop Outlook Webinar, September 13, 2016
19.5% 16.3%
11.5% 9.4%
19.8% 17.5%
11.6% 12.7% 13.9% 13.1%
8.6% 7.9% 7.4% 9.2%
12.6% 12.5%
16.5%
8.8% 7.1% 6.4%
4.4%
8.6%
15.6%
6.7% 4.5% 4.5%
6.6% 5.4% 4.6% 2.6%
4.9% 4.9%
9.0%
0%
10%
20%
30%
40%
50%
0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16
U.S. Ending Stocks to Use: Corn & Soybeans
Wheat Corn Beans
Fall 2016 Crop Outlook Webinar, September 13, 2016
Corn: USDA
9/12/16 USDA 12/13 13/14 14/15 15/16 16/17
Carry In 989 821 1,232 1,731 1,716 (+10)
Production 10,755 13,829 14,216 13,601 15,093 (-60) Total Supply 11,932 14,686 15,479 15,397 16,859
Feed 4,336 5,036 5,317 5,200 5,650 (-25) FSI Non-Fuel 1,396 1,367 1,359 1,367 1,375
Ethanol 4,648 5,134 5,207 5,200 5,275 Exports 731 1,917 1,824 1,915(-10) 2,175
Total Use 11,111 13,454 13,748 13,682 14,475 Carry over 821 1,232 1,731 1,716 (+10) 2,384 (-25) U.S. Price $6.89 $4.46 $3.70 $3.60 $3.20 (+.05)
$2.90-$3.50
Fall 2016 Crop Outlook Webinar, September 13, 2016
Equaled 10 Year Lows: BoNom???
Fall 2016 Crop Outlook Webinar, September 13, 2016
Corn Summary • -‐Record large crop, but Record large usage
• -‐Growing inventories-‐highest in 11 years. USDA MYA price $3.20
• -‐Indiana storage fully uElized
• -‐Some basis erosion if storage is short at harvest
• -‐Farmers expected to hold Eghtly at harvest
• -‐Market carry of about 37 cents per bushel into spring/summer
• -‐On-‐farm storage returns expected to be favorable
• -‐Price range of cash price from low-‐$3.00 to $3.70
• -‐Less corn in 2017 and 30-‐40 cent higher prices
• -‐Short Storage?? Corn storage returns expected to be higher for corn than soybeans
Fall 2016 Crop Outlook Webinar, September 13, 2016
34.1 34.2
37.6
32.6
41.4
35.3
37.6 38.9 38.9
36.6 38.1
39.6 38.0
33.9
42.2 43.0 42.7 41.7
39.7
44 43.5 41.9
40
44
47.5 48
50.6
y = 0.4666x + 33.675 R² = 0.6843
30 32 34 36 38 40 42 44 46 48 50
90 91 92 93 94 95 96 97 98 99 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16
U.S. Bean Yield 1990-2016
Fall 2016 Crop Outlook Webinar, September 13, 2016
2.76 2.89
2.76 2.45
3.12 3.06 3.19
2.68 2.97
3.51 3.33
3.09 3.03
3.36
3.93 3.93 4.20
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16
Billion
s Soybean ProducEon
Fall 2016 Crop Outlook Webinar, September 13, 2016
Soybeans: USDA
9/12/16 USDA 12/13 13/14 14/15 15/16 16/17
Carry In 169 141 92 191 195 (-60) Production 3,034 3,358 3,927 3,930 4,201 (+141)
Total Supply 3,239 3,570 4,052 4,145 4,426 (+80) Seed & Res. 89 97 143 110 126
Crush 1,689 1,734 1,875 1,900 1,950 (+10) Exports 1,320 1,647 1,843 1,940 (+60) 1,985 (+35)
Total Use 3,098 3,478 3,861 3,949 4,061 (+35) Carry Over 141 92 191 195 (-60) 365 (+35) U.S. Price $14.40 $13.00 $10.10 $8.95 $9.05 (-.05)
$8.30-$9.80
Fall 2016 Crop Outlook Webinar, September 13, 2016
BoNom???
Fall 2016 Crop Outlook Webinar, September 13, 2016
68%
81% 85%
72%
100%
95%
104%
87% 86%
92%
101% 101%
108%
116%
90%
96%
114% 110%
99%
102%
97%
87%
69%
101%
107%
87%
103%
60%
70%
80%
90%
100%
110%
120%
88 90 92 94 96 98 00 2 4 6 8 10 12 14 16
Indiana Grain Capacity UOlizaOon
Fall 2016 Crop Outlook Webinar, September 13, 2016
3.15 3.15 3.20
3.30 3.32 3.32
3.41 3.43
3.52 3.50 3.49
3.15 3.16 3.17 3.18 3.19 3.20 3.21 3.23 3.24 3.25 3.26
$3.05 $3.10 $3.15 $3.20 $3.25 $3.30 $3.35 $3.40 $3.45 $3.50 $3.55 $3.60
Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug
Corn Bids Roughly based on Central Indiana Sept 12, 2016
Expected Bid Harvest Bid + Interest Costs
Fall 2016 Crop Outlook Webinar, September 13, 2016
0.12 0.12
0.20 0.20 0.28 0.25
0.23
-‐0.09 -‐0.08
-‐$0.30
-‐$0.20
-‐$0.10
$0.00
$0.10
$0.20
$0.30
$0.40
O N D J F M A M J J A
EsOmated Net Corn Storage Returns:
On-‐Farm Storage Commercial Storage
Fall 2016 Crop Outlook Webinar, September 13, 2016
9.36 9.39
9.48 9.52
9.58 9.59 9.63
9.67
9.72 9.71
9.60
9.36 9.39
9.42 9.45
9.49 9.52
9.55 9.58
9.61 9.65
9.68
$9.30
$9.35
$9.40
$9.45
$9.50
$9.55
$9.60
$9.65
$9.70
$9.75
$9.80
Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug
Bean Bids Roughly based on Central Indiana: Sept 12, 2016:
Cash Bid Current Bid + Interest
Fall 2016 Crop Outlook Webinar, September 13, 2016
0.00 0.00 0.06 0.07
0.09 0.07 0.08 0.09 0.11
0.06
-‐$0.50
-‐$0.40
-‐$0.30
-‐$0.20
-‐$0.10
$0.00
$0.10
$0.20
O N D J F M A M J J A
EsOmated Net Soybean Storage Returns:
On-‐Farm Storage Commercial Storage
Fall 2016 Crop Outlook Webinar, September 13, 2016
0.28
0.11
-‐$0.10
$0.00
$0.10
$0.20
$0.30
$0.40
O N D J F M A M J J A
EsOmated Corn versus Bean Storage Returns: On-‐Farm Storage: September 2016
Corn Soybeans
Fall 2016 Crop Outlook Webinar, September 13, 2016
• -‐Huge record yield, record crop, and record usage
• -‐Inventories growing to highest level in 10 years
• -‐USDA MYA U.S. price at $9.05
• -‐Exports will be front end loaded: Compensate for S.A. losses
• -‐If S. American crop is normal bean prices could struggle ader Feb
• -‐Market carry in soybeans about 35 cents to spring/summer
• -‐Current expected storage returns for on-‐farm storage modest
• -‐Possible price range high-‐$8.00’s to $10.25
• -‐More bean acres in 2017 and 20 to 30 cents lower prices
Soybean Summary
Fall 2016 Crop Outlook Webinar, September 13, 2016
FerOlizer Prices ($ per Ton) Source: USDA’s Illinois Produc-on Cost Items Report
Item 9/3/15 9/1/16 % Change
Anhydrous Ammonia
673.00 502.84 -‐25.3%
Urea 447.70 314.73 -‐29.7%
18-‐46-‐0
546.96 423.11 -‐22.6%
Potash 447.22 287.61 -‐35.7%
Fall 2016 Crop Outlook Webinar, September 13, 2016
$0.00
$1.00
$2.00
$3.00
$4.00
$5.00
$6.00
$7.00
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Variable Cost, Overhead Cost, and Gross Revenue per Bushel RotaOon Corn in Indiana
Variable Cost Overhead Cost Gross Revenue
Fall 2016 Crop Outlook Webinar, September 13, 2016
-‐150
-‐100
-‐50
0
50
100
150
200
250
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Dollars per Acre
Earnings per Acre for Corn/Soybean RotaOon (Average ProducOvity Soil)
Annual Average
Fall 2016 Crop Outlook Webinar, September 13, 2016
Corn Price Required to Generate Equivalent Corn and Soybean Returns @ Given Soybean Prices
Soybean Price Low ProducOvity
(C=132; SB=40)
Avg. ProducOvity
(C=165; SB=50)
High ProducOvity
(C=198; SB=60)
$8.50 $3.80 $3.74 $3.58
$9.00 $3.95 $3.89 $3.73
$9.50 $4.11 $4.04 $3.88
$10.00 $4.26 $4.19 $4.04
$10.50 $4.41 $4.35 $4.19
$11.00 $4.56 $4.50 $4.34
Fall 2016 Crop Outlook Webinar September 13, 2016
purdue.edu/commercialag
purdue.edu/agbarometer