Extension and Outreach/Department of Economics

Crop Market Outlook

Hawkeye Farm ShowCedar Falls, Iowa

Mar. 5, 2014

Chad HartAssociate Professor/Crop Markets Specialist

chart@iastate.edu515-294-9911

Extension and Outreach/Department of Economics

U.S. Corn Supply and Use2010 2011 2012 2013 2014

Area Planted (mil. acres) 88.2 91.9 97.2 95.4 92.0

Yield (bu./acre) 152.8 147.2 123.4 158.8 165.3

Production (mil. bu.) 12,447 12,360 10,780 13,925 13,985

Beg. Stocks (mil. bu.) 1,708 1,128 989 821 1,481

Imports (mil. bu.) 28 29 162 35 25

Total Supply (mil. bu.) 14,182 13,517 11,932 14,781 15,491

Feed & Residual (mil. bu.) 4,795 4,557 4,335 5,300 5,400

Ethanol (mil. bu.) 5,019 5,000 4,648 5,000 5,000

Food, Seed, & Other (mil. bu.) 1,407 1,428 1,396 1,400 1,430

Exports (mil. bu.) 1,834 1,543 731 1,600 1,550

Total Use (mil. bu.) 13,055 12,528 11,111 13,300 13,380

Ending Stocks (mil. bu.) 1,128 989 821 1,481 2,111

Season-Average Price ($/bu.) 5.18 6.22 6.89 4.50 3.90

Source: USDA-WAOB for 2010-13

Extension and Outreach/Department of Economics

U.S. Soybean Supply and Use2010 2011 2012 2013 2014

Area Planted (mil. acres) 77.4 75.0 77.2 76.5 79.5

Yield (bu./acre) 43.5 41.9 39.8 43.3 45.2

Production (mil. bu.) 3,329 3,094 3,034 3,289 3,550

Beg. Stocks (mil. bu.) 151 215 169 141 150

Imports (mil. bu.) 14 16 36 30 15

Total Supply (mil. bu.) 3,495 3,325 3,239 3,459 3,715

Crush (mil. bu.) 1,648 1,703 1,689 1,700 1,725

Seed & Residual (mil. bu.) 130 88 90 99 105

Exports (mil. bu.) 1,501 1,365 1,320 1,510 1,600

Total Use (mil. bu.) 3,280 3,155 3,099 3,309 3,430

Ending Stocks (mil. bu.) 215 169 141 150 285

Season-Average Price ($/bu.) 11.30 12.50 14.40 12.70 9.65

Source: USDA-WAOB for 2010-13

Extension and Outreach/Department of Economics

Corn Yields

Source: USDA-NASS

Top: 2013 YieldBottom: Change from 2012Units: Bushels/acre

Extension and Outreach/Department of Economics

Soybean Yields

Source: USDA-NASS

Top: 2013 YieldBottom: Change from 2012Units: Bushels/acre

Extension and Outreach/Department of Economics

World Corn Production

Source: USDA-WAOB

Extension and Outreach/Department of Economics

World Soybean Production

Source: USDA-WAOB

Extension and Outreach/Department of Economics

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

Extension and Outreach/Department of Economics

Cattle Crush Margin

Source: 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

Extension and Outreach/Department of Economics

U.S. Meat Production & Prices

Source: USDA-WAOB

Extension and Outreach/Department of Economics

Corn Export Shifts

Source: USDA-FAS

Extension and Outreach/Department of Economics

Corn Export Sales

Source: USDA-FAS

Extension and Outreach/Department of Economics

Soybean Export Sales

Source: USDA-FAS

Extension and Outreach/Department of Economics

Soy Export Shifts

Source: USDA-FAS

Extension and Outreach/Department of Economics

Corn Grind for Ethanol

Extension and Outreach/Department of EconomicsSource: DOE-EIA, Annual Energy Outlook

Extension and Outreach/Department of Economics

Current Corn Futures

Source: CME Group, 3/4/2014

4.65 4.664.60

Extension and Outreach/Department of Economics

Current Soybean Futures

Source: CME Group, 3/4/2014

13.04

11.47

10.89

Extension and Outreach/Department of Economics

Corn Prices vs. Costs

Sources: USDA-NASS for Prices, Duffy for Costs

Per Bushel Cost calculated as Per Acre Cost from ISU Extension divided by Actual Yield per Acre

Extension and Outreach/Department of Economics

Soybean Prices vs. Costs

Sources: USDA-NASS for Prices, Duffy for Costs

Per Bushel Cost calculated as Per Acre Cost from ISU Extension divided by Actual Yield per Acre

Extension and Outreach/Department of Economics

2013/14 Crop Prices

Extension and Outreach/Department of Economics

2014/15 Crop Margins

Extension and Outreach/Department of EconomicsSource: droughtmonitor.unl.edu

Extension and Outreach/Department of EconomicsSource: NOAA-CPC

3-Month Temperature Outlook

Extension and Outreach/Department of EconomicsSource: NOAA-CPC

3-Month Precipitation Outlook

Extension and Outreach/Department of Economics

Thoughts for 2014 and BeyondSupply/demand concerns

Demand rebounding? Yes, so far, so goodAcreage allocation for 2014: Where do the extra corn acres go?Markets favoring soybeans in the short term and corn longer term

2013/14

USDA

2014/15

USDA

Unofficial

2013/14

Futures

(3/4/14)

2014/15

Futures

(3/4/14)

Corn $4.50 $3.90 $4.65 $4.66

Soybeans $12.70 $9.65 $13.04 $11.47

Extension and Outreach/Department of Economics

World Corn Markets

Source: USDA

Extension and Outreach/Department of Economics

Arable Land

Extension and Outreach/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/