2011 Crop Market Outlook

Extension and Outreach/Department of Economics

2011 Crop Market Outlook

Coleman Research Group PresentationSept. 1, 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 92.3

Yield (bu./acre) 153.9 164.7 152.8 153.0

Production (mil. bu.) 12,092 13,092 12,447 12,914

Beg. Stocks (mil. bu.) 1,624 1,673 1,708 940

Imports (mil. bu.) 14 8 30 20

Total Supply (mil. bu.) 13,729 14,774 14,185 13,874

Feed & Residual (mil. bu.) 5,182 5,140 5,000 4,900

Ethanol (mil. bu.) 3,709 4,568 5,020 5,100

Food, Seed, & Other (mil. bu.) 1,316 1,371 1,400 1,410

Exports (mil. bu.) 1,849 1,987 1,825 1,750

Total Use (mil. bu.) 12,056 13,066 13,245 13,160

Ending Stocks (mil. bu.) 1,673 1,708 910 714

Season-Average Price ($/bu.) 4.06 3.55 5.25 6.70


U.S. Soybean Supply and Use2008 2009 2010 2011


Yield (bu./acre) 39.7 44.0 43.5 41.4


Beg. Stocks (mil. bu.) 205 138 151 230

Imports (mil. bu.) 13 15 15 15


Crush (mil. bu.) 1,662 1,752 1,645 1,635

Seed & Residual (mil. bu.) 106 110 125 111

Exports (mil. bu.) 1,279 1,499 1,495 1,400

Total Use (mil. bu.) 3,047 3,361 3,265 3,146

Ending Stocks (mil. bu.) 138 151 230 155



U.S. Wheat Supply and Use2008 2009 2010 2011


Yield (bu./acre) 44.9 44.5 46.4 45.2


Beg. Stocks (mil. bu.) 306 657 976 861

Imports (mil. bu.) 127 119 97 100


Food (mil. bu.) 927 919 930 945

Seed (mil. bu.) 78 69 73 82

Feed & Residual (mil. bu.) 255 150 129 240

Exports (mil. bu.) 1,015 879 1,289 1,100

Total Use (mil. bu.) 2,275 2,018 2,420 2,367

Ending Stocks (mil. bu.) 657 976 861 671



World Corn Production

Source: USDA


World Soybean Production

Source: USDA


World Wheat Production

Source: USDA


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


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


Corn vs. Wheat

Source: CME Group, 8/29/2011

6.00

6.50

7.00

7.50

8.00

8.50

9.00$

per b

ushe

l

Corn Wheat


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

2008 2009 2010


Corn Advance Export Sales

Source: USDA, FAS

0

100

200

300

400

500

600

700

12/3

0

1/13

1/27

2/10

2/24

3/10

3/24 4/

7

4/21 5/

5

5/19 6/

2

6/16

6/30

7/14

7/28

8/11

8/25

Mill

ion

bush

els

2011 Crop 2010 Crop


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

2008 2009 2010


Soy Advance Export Sales

Source: USDA, FAS

0

100

200

300

400

500

600

700

12/3

0

1/13

1/27

2/10

2/24

3/10

3/24 4/

7

4/21 5/

5

5/19 6/

2

6/16

6/30

7/14

7/28

8/11

8/25

Mill

ion

bush

els

2011 Crop 2010 Crop


Wheat Export Sales

Source: USDA, FAS

0

250

500

750

1,000

1,250

1,500

Week

Mill

ion

bush

els

2009 2010 2011


Wheat Export Shifts

Source: USDA, FAS

Japan

Nigeria Philippines

Egypt

Unknown

Other

Mexico

Total

SouthKorea

-40

-30

-20

-10

0

10

20

Mill

ion

bush

els

22.3%

-0.7%

14.0%

-2.5%

-81.4%

-29.7%

-30.9%

10.5%

-4.1%


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


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

5/3/

2007

9/3/

2007

1/3/

2008

5/3/

2008

9/3/

2008

1/3/

2009

5/3/

2009

9/3/

2009

1/3/

2010

5/3/

2010

9/3/

2010

1/3/

2011

5/3/

2011

$ pe

r gal

lon

Ethanol Blending Advantage


Corn Grind for Ethanol

86

88

90

92

94

96

98

100

Sep-10

Oct-10

Nov-10

Dec-10

Jan-11

Feb-11

Mar-11

Apr-11

May-11

Jun-11

Jul-11

Aug-11

Mill

ion

bush

els

Source: DOE, EIA


Ethanol Stocks

650

700

750

800

850

900

Sep-10

Oct-10

Nov-10

Dec-10

Jan-11

Feb-11

Mar-11

Apr-11

May-11

Jun-11

Jul-11

Aug-11

Mill

ion

gallo

ns

Source: DOE, EIA


Nearby Futures (Jan. 3, 2011 = 1)

0.90

1.00

1.10

1.20

1.30

1.40

1.501/

3/20

11

1/17

/201

1

1/31

/201

1

2/14

/201

1

2/28

/201

1

3/14

/201

1

3/28

/201

1

4/11

/201

1

4/25

/201

1

5/9/

2011

5/23

/201

1

6/6/

2011

6/20

/201

1

7/4/

2011

7/18

/201

1

8/1/

2011

8/15

/201

1

8/29

/201

1

Corn Ethanol Gasoline


Projected Corn Yields

Source: USDA-NASS


Projected Soybean Yields

Source: USDA-NASS


Winter Wheat Yields

Source: USDA-NASS

Last YearKS 45OK 31TX 34US 46.8


Projected Spring Wheat Yields

Source: USDA-NASS

Projected Change in ProductionHard Red Spring -17%White +3%Durum -47%


Projected 2011 Season-Average Corn Price

3.50

4.00

4.50

5.00

5.50

6.00

6.50

7.00

7.50

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

$ pe

r bus

hel

Futures USDA


Projected 2011 Season-Average Soy Price

8.509.009.50

10.0010.5011.0011.5012.0012.5013.0013.5014.00

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

$ pe

r bus

hel

Futures USDA


Projected ‘11 Season-Average Wheat Price

4.50

5.00

5.50

6.00

6.50

7.00

7.50

8.00

8.50

9.00

9.50

$ pe

r bus

hel

Futures USDA


Thoughts for 2011 and BeyondGeneral economic conditions

Continued worldwide economic recovery is a major key for crop prices

Supply/demand concernsDroughts, floods, heat waves, etc.Biofuel growth and energy demandWill supply be able to keep pace with demand?

2011/12USDA

2011/12Futures

(8/29/11)

2012/13Futures

(8/29/11)Corn $6.70 $7.42 $6.48Soybeans $13.50 $14.00 $13.26Wheat $7.60 $7.89 $8.34


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/

2011 Crop Market Outlook

Documents

Transcript of 2011 Crop Market Outlook