Extension and Outreach/Department of Economics Crop Outlook Pro Ag Fall 2011 Outlook Seminars Sheldon and Cherokee, Iowa Nov. 8, 2011 Chad Hart Assistant.

Extension and Outreach/Department of Economics

Crop Outlook

Pro Ag Fall 2011 Outlook SeminarsSheldon and Cherokee, Iowa

Nov. 8, 2011

Chad HartAssistant Professor/Grain Markets Specialist

[email protected]


U.S. Corn Supply and Use2008 2009 2010 2011

Area Planted (mil. acres) 86.0 86.4 88.2 91.9

Yield (bu./acre) 153.9 164.7 152.8 148.1

Production (mil. bu.) 12,092 13,092 12,447 12,433

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

Imports (mil. bu.) 14 8 27 15

Total Supply (mil. bu.) 13,729 14,774 14,182 13,576

Feed & Residual (mil. bu.) 5,182 5,125 4,803 4,700

Ethanol (mil. bu.) 3,709 4,591 5,020 5,000

Food, Seed, & Other (mil. bu.) 1,316 1,370 1,395 1,410

Exports (mil. bu.) 1,849 1,980 1,835 1,600

Total Use (mil. bu.) 12,056 13,066 13,053 12,710

Ending Stocks (mil. bu.) 1,673 1,708 1,128 866

Season-Average Price ($/bu.) 4.06 3.55 5.18 6.70

Source: USDA-WAOB


U.S. Soybean Supply and Use2008 2009 2010 2011

Area Planted (mil. acres) 75.7 77.5 77.4 75.0

Yield (bu./acre) 39.7 44.0 43.5 41.5

Production (mil. bu.) 2,967 3,359 3,329 3,060

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

Imports (mil. bu.) 13 15 15 15

Total Supply (mil. bu.) 3,185 3,512 3,495 3,290

Crush (mil. bu.) 1,662 1,752 1,648 1,635

Seed & Residual (mil. bu.) 106 110 132 120

Exports (mil. bu.) 1,279 1,499 1,500 1,375

Total Use (mil. bu.) 3,047 3,361 3,280 3,130

Ending Stocks (mil. bu.) 138 151 215 160

Season-Average Price ($/bu.) 9.97 9.59 11.30 13.15

Source: USDA-WAOB


Projected Corn Yields

Source: USDA-NASS


Projected Soybean Yields

Source: USDA-NASS


Corn Harvest Pace

Source: USDA-NASS

0

20

40

60

80

100

9/1 9/15 9/29 10/13 10/27 11/10 11/24 12/8 12/22

% H

arve

sted

Maximum since 1980 Minimum since 1980 2011

2010 5-yr Average (2006-10)


Soybean Harvest Pace

Source: USDA-NASS

0

20

40

60

80

100

9/1 9/15 9/29 10/13 10/27 11/10 11/24 12/8 12/22

% H

arve

sted

Maximum since 1980 Minimum since 1980 2011

2010 5-yr Average (2006-10)


World Corn Production

Source: USDA-WAOB


World Soybean Production

Source: USDA-WAOB


Corn vs. Wheat

Source: CME Group, 11/7/2011

6.00

6.20

6.40

6.60

6.80

7.00

7.20

7.40

7.60

7.80$

per b

ushe

l

Corn Wheat


Cattle Crush Margin

Source: Shane Ellis, 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


Hog Crush Margin

Source: Shane Ellis, 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


Corn Export Sales

Source: USDA-FAS

0

500

1,000

1,500

2,000

2,500

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

bush

els

2009 2010 2011


Corn Export Shifts

Source: USDA-FAS

Japan

Mexico

Taiwan

Egypt

Unknown

Other

South Korea

Total

China

-60

-40

-20

0

20

40

60

80

Mill

ion

bush

els

-19.2%

25.1%

12.2%-7.1%

-75.0%

24.6%

-15.0%

4.5%

551.3%


Soybean Export Sales

Source: USDA-FAS

0

400

800

1,200

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

bush

els

2009 2010 2011


Soy Export Shifts

Source: USDA-FAS

China

EU Japan Mexico Taiwan

Total

Unknown

Indonesia

Other

-450

-400

-350

-300

-250

-200

-150

-100

-50

0

Mill

ion

bush

els -26.3%

-76.5% -32.0%

-3.1%

-45.4%

-68.6%

-46.9%

-36.0%

-24.9%


5

7

9

11

13

15

17

2011 2012 2013

Bill

ion

gallo

ns

Conventional Biofuels Cellulosic BiofuelsBiodiesel Additional Advanced Biofuels

Renewable Fuels Standard (RFS)

CropYear

Billion Bushels

2011 4.642012 4.862013 5.072014 5.29


Corn Grind for Ethanol

Source: DOE-EIA

86

88

90

92

94

96

98

100

Sep-10 Nov-10 Jan-11 Mar-11 May-11 Jul-11 Sep-11

Mill

ion

bush

els


Ethanol Margins

Source: CARD


-0.04

-0.02

0.00

0.02

0.04

0.06

0.08

0.10

0.12

0.14

0.16

1/3/

2007

7/3/

2007

1/3/

2008

7/3/

2008

1/3/

2009

7/3/

2009

1/3/

2010

7/3/

2010

1/3/

2011

7/3/

2011

1/3/

2012

7/3/

2012

1/3/

2013

7/3/

2013

1/3/

2014

7/3/

2014

$ pe

r gal

lon

Ethanol Blending Advantage


Projected 2011 Season-Average Corn Price

3.50

4.00

4.50

5.00

5.50

6.00

6.50

7.00

7.5012

/14/

2009

2/14

/201

0

4/14

/201

0

6/14

/201

0

8/14

/201

0

10/1

4/20

10

12/1

4/20

10

2/14

/201

1

4/14

/201

1

6/14

/201

1

8/14

/201

1

10/1

4/20

11

$ pe

r bus

hel

Futures USDA


Projected 2011 Season-Average Soy Price

8.509.009.50

10.0010.5011.0011.5012.0012.5013.0013.5014.0014.50

12/1

4/20

09

2/14

/201

0

4/14

/201

0

6/14

/201

0

8/14

/201

0

10/1

4/20

10

12/1

4/20

10

2/14

/201

1

4/14

/201

1

6/14

/201

1

8/14

/201

1

10/1

4/20

11

$ pe

r bus

hel

Futures USDA


Projected 2012 Season-Average Corn Price

4.50

5.00

5.50

6.00

6.50

7.00

12/1

4/20

10

1/14

/201

1

2/14

/201

1

3/14

/201

1

4/14

/201

1

5/14

/201

1

6/14

/201

1

7/14

/201

1

8/14

/201

1

9/14

/201

1

10/1

4/20

11

$ pe

r bus

hel

Futures USDA


Projected 2012 Season-Average Soy Price

11.00

11.50

12.00

12.50

13.00

13.50

14.00

12/1

4/20

10

1/14

/201

1

2/14

/201

1

3/14

/201

1

4/14

/201

1

5/14

/201

1

6/14

/201

1

7/14

/201

1

8/14

/201

1

9/14

/201

1

10/1

4/20

11

$ pe

r bus

hel

Futures USDA


Iowa Corn Prices vs. Costs

1.001.502.002.503.003.504.004.505.005.506.006.507.00

$ pe

r Bus

hel

Season-average Price Cost per Bushel


Iowa Soybean Prices vs. Costs

2.003.004.005.006.007.008.009.00

10.0011.0012.0013.0014.00

$ pe

r Bus

hel

Season-average Price Cost per Bushel


Principal Crop Area

Source: USDA-NASS

315

317

319

321

323

325

327

329

331

333

335

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

Mill

ion

acre

s


States with Room to Grow

Number is the difference in planted acres between 2008 and 2011


Iowa Crop Margins

0

50

100

150

200

250

300

350

400$

per a

cre

Corn Soy




Thoughts for 2012 and BeyondGeneral economic conditions

Continued worldwide economic recovery is a major key for crop pricesUS job recovery, European financial concerns, Chinese inflation

Supply/demand concernsSmaller than anticipated U.S. cropsBiofuel growth and energy demandCorn still has the upper hand in the acreage competitionWill supply be able to keep pace with demand?

2011/12: USDA: Corn $6.70; Soy $13.15Futures (as of 11/7/11): Corn $6.27; Soy $11.69

2012/13:Futures (as of 11/7/11): Corn $5.94; Soy $11.80


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/

Extension and Outreach/Department of Economics Crop Outlook Pro Ag Fall 2011 Outlook Seminars Sheldon and Cherokee, Iowa Nov. 8, 2011 Chad Hart Assistant.

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