2013 Agricultural Commodity Outlook

Extension and Outreach/Department of Economics

2013 Agricultural Commodity Outlook

Iowa Chapter of ASFMRA Annual MeetingAmes, IowaFeb. 7, 2013

Chad HartAssociate Professor/Grain Markets Specialist

[email protected]


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


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


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

Area Planted (mil. acres) 86.0 86.4 88.2 91.9 97.2

Yield (bu./acre) 153.9 164.7 152.8 147.2 123.4

Production (mil. bu.) 12,092 13,092 12,447 12,360 10,780

Beg. Stocks (mil. bu.) 1,624 1,673 1,708 1,128 989

Imports (mil. bu.) 14 8 28 29 100

Total Supply (mil. bu.) 13,729 14,774 14,182 13,516 11,869

Feed & Residual (mil. bu.) 5,182 5,125 4,795 4,548 4,450

Ethanol (mil. bu.) 3,709 4,591 5,019 5,011 4,500

Food, Seed, & Other (mil. bu.) 1,316 1,370 1,407 1,426 1,367

Exports (mil. bu.) 1,849 1,980 1,834 1,543 950

Total Use (mil. bu.) 12,056 13,066 13,055 12,527 11,267

Ending Stocks (mil. bu.) 1,673 1,708 1,128 989 602

Season-Average Price ($/bu.) 4.06 3.55 5.18 6.22 7.40

Source: USDA-WAOB


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

Area Planted (mil. acres) 75.7 77.5 77.4 75.0 77.2

Yield (bu./acre) 39.7 44.0 43.5 41.9 39.6

Production (mil. bu.) 2,967 3,359 3,329 3,094 3,015

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

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

Total Supply (mil. bu.) 3,185 3,512 3,495 3,325 3,204

Crush (mil. bu.) 1,662 1,752 1,648 1,703 1,605

Seed & Residual (mil. bu.) 106 110 130 91 119

Exports (mil. bu.) 1,279 1,499 1,501 1,362 1,345

Total Use (mil. bu.) 3,047 3,361 3,280 3,155 3,070

Ending Stocks (mil. bu.) 138 151 215 169 135

Season-Average Price ($/bu.) 9.97 9.59 11.30 12.50 14.25

Source: USDA-WAOB


Prices

11.50

12.25

13.00

13.75

14.50

15.25

16.00

16.75

4.50

5.00

5.50

6.00

6.50

7.00

7.50

8.00

5/2

1/2

01

2

6/4

/201

2

6/1

8/2

01

2

7/2

/201

2

7/1

6/2

01

2

7/3

0/2

01

2

8/1

3/2

01

2

8/2

7/2

01

2

9/1

0/2

01

2

9/2

4/2

01

2

10

/8/2

01

2

10

/22/2

012

11

/5/2

01

2

11

/19/2

012

12

/3/2

01

2

12

/17/2

012

12

/31/2

012

1/1

4/2

01

3

1/2

8/2

01

3

$ p

er

bush

el

$ p

er

bush

el

Corn Soybeans


Projected Corn Yields

Top: 2012 YieldBottom: Change from 2011Units: Bushels/acre


Projected Soybean Yields

Top: 2012 YieldBottom: Change from 2011Units: Bushels/acre


World Corn Production

Source: USDA-WAOB


World Soybean Production

Source: USDA-WAOB


World Weather

Source: USDC and USDA


Corn Export Shifts

Source: USDA-FAS

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2,000

9/1 10/1 11/1 12/1 1/1 2/1 3/1 4/1 5/1 6/1 7/1 8/1

Mill

ion b

ush

els

Week

2010 2011 2012


Soy Export Shifts

Source: USDA-FAS

0

200

400

600

800

1,000

1,200

1,400

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

Mill

ion b

ush

els

Week

2010 2011 2012


Corn Grind for Ethanol

80

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 Jan-13

Mill

ion

bush

els


Ethanol Stocks

650

700

750

800

850

900

950

1000

Sep-10 Jan-11 May-11 Sep-11 Jan-12 May-12 Sep-12 Jan-13

Mill

ion

gallo

ns


2.00

2.20

2.40

2.60

2.80

3.00

3.20

3.40

1/1

/201

2

2/1

/201

2

3/1

/201

2

4/1

/201

2

5/1

/201

2

6/1

/201

2

7/1

/201

2

8/1

/201

2

9/1

/201

2

10/1

/20

12

11/1

/20

12

12/1

/20

12

1/1

/201

3

2/1

/201

3

$ p

er

ga

llon

Ethanol Gasoline

Fuel Prices


U.S. Blended Gasoline Consumption

Source: DOE-EIA, via USDA-ERS

7.6 bil. gal.

7.4 bil. gal.


5.40

5.60

5.80

6.00

6.20

6.40

6.60

6.80

7.00

7.20

7.40

Feb

-13

Jun-

13

Oct

-13

Feb

-14

Jun-

14

Oct

-14

Feb

-15

Jun-

15

Oct

-15

$ pe

r bu

shel

Current Corn Futures

Source: CME Group, 2/5/2013

6.78

5.57

5.37


12.50

13.00

13.50

14.00

14.50

15.00

Feb

-13

Jun-

13

Oct

-13

Feb

-14

Jun-

14

Oct

-14

Feb

-15

Jun-

15

Oct

-15

$ pe

r bu

shel

Current Soybean Futures

Source: CME Group, 2/5/2013

14.18

12.8212.44


Total Acreage Shift

Source: USDA-NASS


Acreage Shift by Crop

Source: USDA-NASS

Acreage change from 2011Units: 1,000 acres


Acreage Shift by State

Source: USDA-NASS

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


Thoughts for 2013 and BeyondSupply/demand concerns

Soil moisture issuesBiofuel and export strengthWorldwide response to drought-induced pricing

2012/13

USDA

2012/13

Futures

(2/5/13)

2013/14

Futures

(2/5/13)

Corn $7.40 $6.78 $5.57

Soybeans $14.25 $14.18 $12.82

Risk managementCrop insurancePrice protection


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/

2013 Agricultural Commodity Outlook

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