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2011 Grain/Feed Market Outlook. ISU Ag. Extension In-Service Ames, Iowa Mar. 23, 2011 Chad Hart Assistant Professor/Grain Markets Specialist chart@iastate.edu 515-294-9911. U.S. Corn Supply and Use. Source: USDA. U.S. DDG Supply and Use. - PowerPoint PPT Presentation
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University Extension/Department of Economics
2011 Grain/Feed Market Outlook
ISU Ag. Extension In-ServiceAmes, Iowa
Mar. 23, 2011
Chad HartAssistant Professor/Grain Markets Specialist
chart@iastate.edu515-294-9911
University Extension/Department of Economics
U.S. Corn Supply and Use
Source: USDA
2007 2008 2009 2010
Area Planted (mil. acres) 93.5 86.0 86.4 88.2
Yield (bu./acre) 150.7 153.9 164.7 152.8
Production (mil. bu.) 13,038 12,092 13,092 12,447
Beg. Stocks (mil. bu.) 1,304 1,624 1,673 1,708
Imports (mil. bu.) 20 14 8 20
Total Supply (mil. bu.) 14,362 13,729 14,774 14,175
Feed & Residual (mil. bu.) 5,913 5,182 5,140 5,200
Ethanol (mil. bu.) 3,049 3,709 4,568 4,950
Food, Seed, & Other (mil. bu.) 1,338 1,316 1,371 1,400
Exports (mil. bu.) 2,437 1,849 1,987 1,950
Total Use (mil. bu.) 12,737 12,056 13,066 13,500
Ending Stocks (mil. bu.) 1,624 1,673 1,708 675
Season-Average Price ($/bu.) 4.20 4.06 3.55 5.40
University Extension/Department of Economics
U.S. DDG Supply and Use2008 2009 2010
Production (mil. metric tons) 26.5 33.1 35.9
Imports (mil. metric tons) 0.3 0.4 0.5
Total Supply (mil. metric tons) 26.8 33.5 36.4
Domestic (mil. metric tons) 21.8 25.2 26.1
Exports (mil. metric tons) 5.0 8.3 10.3
Total Use (mil. metric tons) 26.8 33.5 36.4
Average Price ($/ton) 122 113 150
My estimates, so take with a grain (or pound) of salt
University Extension/Department of Economics
Feed Pricing
Source: USDA
0.4
0.6
0.8
1
1.2
1.4
1.6
1.8
2
Jan
. 20
07
= 1
Corn Corn gluten feed DDGs
University Extension/Department of Economics
U.S. Soybean Supply and Use2007 2008 2009 2010
Area Planted (mil. acres) 64.7 75.7 77.5 77.4
Yield (bu./acre) 41.7 39.7 44.0 43.5
Production (mil. bu.) 2,677 2,967 3,359 3,329
Beg. Stocks (mil. bu.) 574 205 138 151
Imports (mil. bu.) 10 13 15 15
Total Supply (mil. bu.) 3,261 3,185 3,512 3,495
Crush (mil. bu.) 1,803 1,662 1,752 1,655
Seed & Residual (mil. bu.) 93 106 108 110
Exports (mil. bu.) 1,159 1,279 1,501 1,590
Total Use (mil. bu.) 3,056 3,047 3,361 3,355
Ending Stocks (mil. bu.) 205 138 151 140
Season-Average Price ($/bu.) 10.10 9.97 9.59 11.60
Source: USDA
University Extension/Department of Economics
U.S. Soybean Meal Supply and Use2008 2009 2010
Production (thou. short tons) 39,102 41,700 39,583
Beg. Stocks (thou. short tons) 294 235 302
Imports (thou. short tons) 88 160 165
Total Supply (thou. short tons) 39,484 42,095 40,050
Domestic (thou. short tons) 30,752 30,619 30,500
Exports (thou. short tons) 8,497 11,175 9,250
Total Use (thou. short tons) 39,249 41,794 39,750
Ending Stocks (thou. short tons) 235 302 300
Season-Average Price ($/short ton) 331.17 311.27 355.00
Source: USDA
University Extension/Department of Economics
World Corn Production
Source: USDA
University Extension/Department of Economics
World Soybean Production
Source: USDA
University Extension/Department of Economics
La Niña Winter
Source: NOAA
El Niño
Neutral
La Niña
University Extension/Department of Economics
Corn Export Sales
Source: USDA, FAS
0
500
1,000
1,500
2,000
2,500
Week
Mill
ion
bu
she
ls
2008 2009 2010
University Extension/Department of Economics
2010 U.S. Corn Exports
Source: USDA, FAS
Other22%
Unknown7%
China1%
Taiwan6%
SouthKorea
7%
Egypt7% Mexico
17%
Japan29%
University Extension/Department of Economics
Corn Export Shifts
Source: USDA, FAS
Japan
Mexico Taiwan
Egypt Unknown
Other
South Korea
Total
China
-60
-40
-20
0
20
40
60
80
100
120
Mill
ion b
ush
els
13.1%
-3.9%
-21.3%
-13.3%
81.4%71.0%
4.4%
7.3%
University Extension/Department of Economics
University Extension/Department of Economics
Corn Advance Export Sales
Source: USDA, FAS
0
100
200
300
400
500
600
700
12
/30
1/1
3
1/2
7
2/1
0
2/2
4
3/1
0
3/2
4
4/7
4/2
1
5/5
5/1
9
6/2
6/1
6
6/3
0
7/1
4
7/2
8
8/1
1
8/2
5
Mill
ion
bu
shels
2011 Crop 2010 Crop
University Extension/Department of Economics
DDG Exports
Source: USDA
0
1000
2000
3000
4000
5000
6000
7000
8000
9000
2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 2009/10
1,0
00
metr
ic t
on
s
China Mexico Canada TurkeyVietnam South Korea Thailand EUIndonesia Japan Others
University Extension/Department of Economics
DDG Exports So Far This Year
Source: USDA
China25%
Mexico20%
Canada12%
South Korea5%
Vietnam5%
Other33%
University Extension/Department of Economics
Soybean Export Sales
Source: USDA, FAS
0
400
800
1,200
1,600
Week
Mill
ion
bu
she
ls
2008 2009 2010
University Extension/Department of Economics
2010 U.S. Soybean Exports
Source: USDA, FAS
Other11%Unknown
4%Indonesia3%
Mexico6%
Japan5%
Taiwan3%
EU7%
China61%
University Extension/Department of Economics
Soy Export Shifts
Source: USDA, FAS
China
EU JapanMexico
Taiwan
Total
Other
Indonesia
Unknown
-40
-20
0
20
40
60
80
100
120
140
160
Mill
ion b
ush
els
15.2%
0.3% 0.2%
7.1%
-8.3%
178.0%
-10.0%
11.2%
3.7%
University Extension/Department of Economics
Soy Advance Export Sales
Source: USDA, FAS
0
100
200
300
400
500
600
700
12
/30
1/1
3
1/2
7
2/1
0
2/2
4
3/1
0
3/2
4
4/7
4/2
1
5/5
5/1
9
6/2
6/1
6
6/3
0
7/1
4
7/2
8
8/1
1
8/2
5
Mill
ion
bu
shels
2011 Crop 2010 Crop
University Extension/Department of Economics
Soybean Meal Export Sales
Source: USDA, FAS
0
1
2
3
4
5
6
7
8
9
10
Week in Marketing Year
Mil.
Metr
ic T
on
s
2008 2009 2010
University Extension/Department of Economics
2010 U.S. Soybean Meal Exports
Source: USDA, FAS
EU9%
Philippines13%
Mexico16%
Canada12%
Morocco5%
Unknown4%
Other41%
University Extension/Department of Economics
0
2
4
6
8
10
12
14
16
2010 2011 2012
Bill
ion
ga
llon
s
Conventional Biofuels Cellulosic Biofuels
Biodiesel Additional Advanced Biofuels
Renewable Fuels Standard (RFS)
CropYear
Billion Bushels
2009 4.11
2010 4.43
2011 4.64
2012 4.86
University Extension/Department of Economics
Ethanol Margins
Source: ISU, CARD
University Extension/Department of Economics
Ethanol Margins
Source: ISU, CARD
University Extension/Department of Economics
-0.04
-0.02
0.00
0.02
0.04
0.06
0.08
0.10
0.12
0.14
0.16
1/3
/20
07
4/3
/20
07
7/3
/20
07
10
/3/2
007
1/3
/20
08
4/3
/20
08
7/3
/20
08
10
/3/2
008
1/3
/20
09
4/3
/20
09
7/3
/20
09
10
/3/2
009
1/3
/20
10
4/3
/20
10
7/3
/20
10
10
/3/2
010
1/3
/20
11
$ p
er
ga
llon
Ethanol Blending Advantage
University Extension/Department of Economics
0.00
0.02
0.04
0.06
0.08
0.10
0.12
$ p
er
ga
llon
Ethanol Blending Advantage
University Extension/Department of Economics
0.50
1.00
1.50
2.00
2.50
3.00
3.50
4.00
1/3
/20
07
5/3
/20
07
9/3
/20
07
1/3
/20
08
5/3
/20
08
9/3
/20
08
1/3
/20
09
5/3
/20
09
9/3
/20
09
1/3
/20
10
5/3
/20
10
9/3
/20
10
1/3
/20
11
$ p
er
ga
llon
Ethanol Gasoline
Fuel Prices
University Extension/Department of Economics
Projected 2010 Season-Average Corn Price
3.00
3.50
4.00
4.50
5.00
5.50
6.00
6/8
/20
09
8/8
/20
09
10
/8/2
009
12
/8/2
009
2/8
/20
10
4/8
/20
10
6/8
/20
10
8/8
/20
10
10
/8/2
010
12
/8/2
010
2/8
/20
11
$ p
er
bu
she
l
Futures USDA
University Extension/Department of Economics
Projected 2010 Season-Average Soy Price
8.00
8.50
9.00
9.50
10.00
10.50
11.00
11.50
12.00
12.50
6/8
/20
09
8/8
/20
09
10
/8/2
009
12
/8/2
009
2/8
/20
10
4/8
/20
10
6/8
/20
10
8/8
/20
10
10
/8/2
010
12
/8/2
010
2/8
/20
11
$ p
er
bu
she
l
Futures USDA
University Extension/Department of Economics
Projected 2011 Season-Average Corn Price
3.50
3.75
4.00
4.25
4.50
4.75
5.00
5.25
5.50
5.75
6.00
6.25
$ p
er
bu
she
l
Futures USDA
University Extension/Department of Economics
Projected 2011 Season-Average Soy Price
8.50
9.00
9.50
10.00
10.50
11.00
11.50
12.00
12.50
13.00
13.50
12/1
4/2
009
1/1
4/2
010
2/1
4/2
010
3/1
4/2
010
4/1
4/2
010
5/1
4/2
010
6/1
4/2
010
7/1
4/2
010
8/1
4/2
010
9/1
4/2
010
10/1
4/2
010
11/1
4/2
010
12/1
4/2
010
1/1
4/2
011
2/1
4/2
011
3/1
4/2
011
$ p
er
bu
she
l
Futures USDA
University Extension/Department of Economics
2008/092007/08
2009/10
2010/11
1.50
2.00
2.50
3.00
3.50
4.00
4.50
5.00
5.50
0% 5% 10% 15% 20% 25% 30%
Stocks-to-use ratio
Pric
e ($
per
bus
hel)
Corn
University Extension/Department of Economics
Iowa Corn Prices vs. Costs
1.00
1.50
2.00
2.50
3.00
3.50
4.00
4.50
5.00
5.50
6.00
$ p
er
Bu
she
l
Season-average Price Cost per Bushel
University Extension/Department of Economics
Iowa Soybean Prices vs. Costs
2.00
3.00
4.00
5.00
6.00
7.00
8.00
9.00
10.00
11.00
12.00
13.00
14.00
$ p
er
Bu
she
l
Season-average Price Cost per Bushel
University Extension/Department of Economics
Principal Crop Area
Source: USDA-NASS
315
317
319
321
323
325
327
329
331
333
335M
illio
n a
cres
University Extension/Department of Economics
States with Room to GrowState Million acres Competing Crops
North Dakota 2.249 Wheat, corn, soy
South Dakota 1.400 Wheat, corn, soy
Missouri 0.930 Rice, cotton, soy
Arkansas 0.715 Rice, cotton, soy
Illinois 0.535 Wheat, corn, soy
Texas 0.466 Cotton, corn, soy
Georgia 0.395 Cotton, corn, soy
Mississippi 0.284 Cotton, rice, soy
North Carolina 0.284 Cotton, corn, soy
Louisiana 0.283 Rice, cotton, soy
University Extension/Department of Economics
New Crop Futures Price Movements
Wheat Corn Soybeans Cotton
MGE Sept. CME Dec. CME Nov. ICE Dec.
($/bu.) ($/bu.) ($/bu.) ($/lb.)
June 1 5.81 4.04 9.22 0.75
Mar. 22 8.83 6.12 13.44 1.24
Change 52% 52% 46% 65%
University Extension/Department of Economics
Projected Crop Margins
120
140
160
180
200
220
240
260
280
300
320
$ p
er
acr
e
Corn Margin Per Acre Soy Margin Per Acre
University Extension/Department of Economics
Thoughts for 2011 and BeyondGeneral economic conditions
Continued economic recovery is a major key for crop pricesJapanese earthquake and tsunami have shaken those prospects
Supply/demand concerns92 million acres of corn and 78 million acres of soybeans?South America: La Niña impacts (Argentina , Brazil )Biofuels: E15; Ethanol & Biodiesel tax credits renewedWill supply be able to keep pace with demand?
2010/11: USDA: Corn $5.40, Soy $11.60Futures (as of 3/22/2011): Corn $5.37, Soy $11.68
2011/12:Futures (as of 3/22/2011): Corn $5.96, Soy $12.93
University Extension/Department of Economics
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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