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Grains Outlook for 2011. Insuring Iowa’s Agriculture Ames, Iowa Nov. 9, 2010 Chad Hart Assistant Professor/Grain Markets Specialist [email protected] 515-294-9911. U.S. Corn Supply and Use. Source: USDA. Source: USDA-NASS. Translates to a yield in the 170-175 bu. range. - PowerPoint PPT Presentation
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University Extension/Department of Economics
Grains Outlook for 2011
Insuring Iowa’s AgricultureAmes, IowaNov. 9, 2010
Chad HartAssistant Professor/Grain Markets Specialist
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 86.5 88.2
Yield (bu./acre) 150.7 153.9 164.7 154.3
Production (mil. bu.) 13,038 12,092 13,110 12,540
Beg. Stocks (mil. bu.) 1,304 1,624 1,673 1,708
Imports (mil. bu.) 20 14 8 10
Total Supply (mil. bu.) 14,362 13,729 14,792 14,257
Feed & Residual (mil. bu.) 5,913 5,182 5,159 5,300
Ethanol (mil. bu.) 3,049 3,709 4,568 4,800
Food, Seed, & Other (mil. bu.) 1,338 1,316 1,370 1,380
Exports (mil. bu.) 2,437 1,849 1,987 1,950
Total Use (mil. bu.) 12,737 12,056 13,084 13,430
Ending Stocks (mil. bu.) 1,624 1,673 1,708 827
Season-Average Price ($/bu.) 4.20 4.06 3.55 5.20
University Extension/Department of EconomicsSource: USDA-NASS
University Extension/Department of Economics
Translates to a yield in the 170-175 bu. range
Translates to a yield around 160 bu.
Source: USDA-NASS
University Extension/Department of Economics
U.S. Soybean Supply and Use2007 2008 2009 2010
Area Planted (mil. acres) 64.7 75.7 77.5 77.7
Yield (bu./acre) 41.7 39.7 44.0 43.9
Production (mil. bu.) 2,677 2,967 3,359 3,375
Beg. Stocks (mil. bu.) 574 205 138 151
Imports (mil. bu.) 10 13 15 10
Total Supply (mil. bu.) 3,261 3,185 3,512 3,536
Crush (mil. bu.) 1,803 1,662 1,752 1,665
Seed & Residual (mil. bu.) 93 106 108 117
Exports (mil. bu.) 1,159 1,279 1,501 1,570
Total Use (mil. bu.) 3,056 3,047 3,361 3,351
Ending Stocks (mil. bu.) 205 138 151 185
Season-Average Price ($/bu.) 10.10 9.97 9.59 11.45
Source: USDA
University Extension/Department of EconomicsSource: USDA-NASS
University Extension/Department of EconomicsSource: USDA-NASS
Within a bushel of each other
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
University Extension/Department of Economics
Clearing Old Stocks
Source: USDA
1.5
2
2.5
3
3.5
4
4.5
Bill
ion
bush
els
The current stocks set-up is reminiscent of the transition between the 2006 and 2007 crops.
University Extension/Department of Economics
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
University Extension/Department of Economics
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
University Extension/Department of Economics
0
200
400
600
800
1,000
1,200
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Mill
ion
bush
els
Corn Soybeans
Historical Export Levels
Source: USDA, FAS
Week 9 of marketing year
University Extension/Department of Economics
Corn Export Shifts
Source: USDA, FAS
Japan
Mexico
South Korea
Taiwan
Egypt
Unknown
Other
Total
China
-60
-40
-20
0
20
40
60
80
100
Mill
ion
bush
els
30.7%
-2.0%
-36.9%
-24.3%
114.2%
81.7%
-12.2%
13.1%
University Extension/Department of Economics
Soy Export Shifts
Source: USDA, FAS
China
EU JapanMexico
Taiwan
Indonesia Other
Total
Unknown
-50
0
50
100
150
200
250
Mill
ion
bush
els
24.3%
47.7% 0.1% 30.5%
-13.9%
24.2%
23.6%
24.0%
140.3%
University Extension/Department of Economics
0
2
4
6
8
10
12
14
16
2010 2011 2012
Bill
ion
gallo
ns
Conventional Biofuels Cellulosic BiofuelsBiodiesel Additional Advanced Biofuels
Renewable Fuels Standard (RFS)
CropYear
Billion Bushels
2009 4.112010 4.432011 4.642012 4.86
University Extension/Department of Economics
Ethanol Blending Advantage
-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
4/3/
2007
7/3/
2007
10/3
/200
7
1/3/
2008
4/3/
2008
7/3/
2008
10/3
/200
8
1/3/
2009
4/3/
2009
7/3/
2009
10/3
/200
9
1/3/
2010
4/3/
2010
7/3/
2010
10/3
/201
0
$ pe
r gal
lon
University Extension/Department of Economics
1.00
1.50
2.00
2.50
3.00
3.50
4.00
4.50
5.00
5.50$
per B
ushe
l
Season-average Price Cost per Bushel
Iowa Corn Prices vs. CostsRight now, futures are in $5.40 range for 2010 and 2011 cornEven with higher fertilizer costs, corn’s profitable
University Extension/Department of Economics
2.00
3.00
4.00
5.00
6.00
7.00
8.00
9.00
10.00
11.00
12.00
$ pe
r Bus
hel
Season-average Price Cost per Bushel
Iowa Soybean Prices vs. CostsFutures are nearly $12 for 2010 and 2011 beans
University Extension/Department of Economics
3.40
3.90
4.40
4.90
5.40
Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec
$ pe
r bus
hel
9.20
9.80
10.40
11.00
11.60
$ pe
r bus
hel
Corn Soy
This YearSoy $12.10Corn $5.43
University Extension/Department of Economics
Thoughts for 2011 and BeyondGeneral economic conditions
Continued economic recovery is a major key for crop pricesLong-term oil price remain in the $90 range
Supply/demand concernsStocks: 2009 vs. 2010 cropSouth America: La Niña impactsBiofuels: E10, E12, or E15; Do the tax credits get extended/renewed?Will supply be able to keep pace with demand?
2010/11: USDA: Corn $5.20, Soy $11.45Futures (as of 11/8/2010): Corn $5.46, Soy $11.802011/12:Futures (as of 11/8/2010): Corn $5.34, Soy $11.71
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/outreach/agriculture/periodicals/ifo/
Ag Decision Maker:http://www.extension.iastate.edu/agdm/