2012 Crop Market Outlook

Extension and Outreach/Department of Economics

2012 Crop Market Outlook

Coleman Research Group PresentationNov. 7, 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) 153.9 164.7 152.8 147.2 122.0

Production (mil. bu.) 12,092 13,092 12,447 12,358 10,706

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

Imports (mil. bu.) 14 8 28 28 75

Total Supply (mil. bu.) 13,729 14,774 14,182 13,514 11,769

Feed & Residual (mil. bu.) 5,182 5,125 4,793 4,562 4,150

Ethanol (mil. bu.) 3,709 4,591 5,021 5,000 4,500

Food, Seed, & Other (mil. bu.) 1,316 1,370 1,407 1,421 1,350

Exports (mil. bu.) 1,849 1,980 1,835 1,543 1,150

Total Use (mil. bu.) 12,056 13,066 13,055 12,526 11,150

Ending Stocks (mil. bu.) 1,673 1,708 1,128 988 619

Season-Average Price ($/bu.) 4.06 3.55 5.18 6.22 7.80

Source: USDA-WAOB


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


Yield (bu./acre) 39.7 44.0 43.5 41.9 37.8


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

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


Crush (mil. bu.) 1,662 1,752 1,648 1,703 1,540

Seed & Residual (mil. bu.) 106 110 130 92 115

Exports (mil. bu.) 1,279 1,499 1,501 1,360 1,265

Total Use (mil. bu.) 3,047 3,361 3,280 3,155 2,920

Ending Stocks (mil. bu.) 138 151 215 169 130


Source: USDA-WAOB


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


Yield (bu./acre) 44.9 44.5 46.3 43.7 46.3


Beg. Stocks (mil. bu.) 306 657 976 862 743

Imports (mil. bu.) 127 119 97 112 130


Food (mil. bu.) 927 919 926 941 950

Seed (mil. bu.) 78 69 71 76 73

Feed & Residual (mil. bu.) 255 150 132 164 315

Exports (mil. bu.) 1,015 879 1,289 1,050 1,150

Total Use (mil. bu.) 2,275 2,018 2,417 2,231 2,488

Ending Stocks (mil. bu.) 657 976 862 743 654


Source: USDA-WAOB


0.7

0.8

0.9

1

1.1

1.2

1.3

1.4

1.5

1.6

5/1/2012 6/1/2012 7/1/2012 8/1/2012 9/1/2012 10/1/2012Corn Soybean Wheat Cotton

Price Ratios Since May 1


Projected Corn Yields


Objective Corn Yield Data

Source: USDA-NASS


Projected Soybean Yields


Objective Soybean Yield Data

Source: USDA-NASS


Winter Wheat Production

Source: USDA-NASS


Other Spring Wheat Production

Source: USDA-NASS


Durum Wheat Production

Source: USDA-NASS


World Corn Production

Source: USDA-WAOB


World Soybean Production

Source: USDA-WAOB


World Wheat Production

Source: USDA-WAOB


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


U.S. Meat Production & Prices

Source: USDA-WAOB


JapanMexico South

Korea

Taiwan Egypt

China

UnknownOther

Total

-450

-400

-350

-300

-250

-200

-150

-100

-50

0

Mill

ion

bush

els

-34.7%-30.1% -76.9%

-75.6% -100.0%

-46.2%-62.1%

-48.3%

-55.1%

Corn Export Shifts

Source: USDA-FAS


China

EU

Japan Mexico

Taiwan

Indonesia

Unknown

Other

Total

-50

0

50

100

150

200

250

300

Mill

ion b

ush

els

21.2%

343.7%-0.6% -16.7%

83.3%

200.2%

67.2%

39.1%

-14.0%

Soy Export Shifts

Source: USDA-FAS


Wheat Export Shifts

Source: USDA-FAS

Japan MexicoNigeria Philippines

South Korea

Other

Unknown

Total-60

-50

-40

-30

-20

-10

0

10

20

Mill

ion b

ush

els

-9.4% -6.6%-3.7% -5.0%

40.3%

-23.3%

-9.2%

-15.3%


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

bush

els

Corn Grind for Ethanol


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

Oct

-12

Jan-

13

Apr

-13

Jul-1

3

Oct

-13

Jan-

14

Apr

-14

Jul-1

4

Oct

-14

Jan-

15

Apr

-15

Jul-1

5

Oct

-15

$ pe

r bu

shel

Current Corn Futures

Source: CME Group, 11/6/2012

6.87

5.99

5.63


12.50

13.00

13.50

14.00

14.50

15.00

15.50

16.00

Oct

-12

Jan-

13

Apr

-13

Jul-1

3

Oct

-13

Jan-

14

Apr

-14

Jul-1

4

Oct

-14

Jan-

15

Apr

-15

Jul-1

5

Oct

-15

$ pe

r bu

shel

Current Soybean Futures

Source: CME Group, 11/6/2012

14.11

12.8112.38


8.40

8.60

8.80

9.00

9.20

9.40

9.60

Oct

-12

Jan

-13

Apr-

13

Jul-

13

Oct

-13

Jan

-14

Apr-

14

Jul-

14

$ p

er

bush

el

Current Wheat Futures

Source: KCBOT, 11/6/2012

8.19 8.56


Total Acreage Shift

Source: USDA-NASS


Acreage Shift by State

Source: USDA-NASS

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



Acreage Shift by Crop

Source: USDA-NASS

Acreage 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

(11/6/12)

2013/14

Futures

(11/6/12)

Corn $7.80 $6.87 $5.99

Soybeans $15.25 $14.11 $12.81

Wheat $8.10 $8.19 $8.56


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/

Documents

2012 Crop Market Outlook