Corn Market Outlook

Todd Hubbs

jhubbs3@Illinois.edu

Department of Agricultural and Consumer Economics

University of Illinois

U.S. Corn Supply and Use2014/15 2015/16 2016/17 2017/18 2018/19 USDA

Estimate2019/20 USDA

Forecast

Area Planted (mil. Acres) 90.6 88 94.0 90.2 89.1 90.0

Area Harvested (mil. Acres) 83.1 80.8 86.7 82.7 81.7 82.0

Yield (Bu./acre) 171 168.4 174.6 176.6 176.4 169.5

Production (mil. Bu.) 14,216 13,602 15,148 14,609 14,420 13,901

Imports (mil. Bu.) 32 67 57 36 30 50

Total Supply (mil. Bu.) 15,479 15,401 16,942 16,939 16,590 16,311

Feed and Residual (mil. Bu.) 5,284 5,113 5,470 5,304 5,275 5,175

Food, Seed, and Industrial (mil. Bu.) 6,601 6,643 6,885 7,056 6,855 6,905

Ethanol (mil. Bu.) 5,200 5,224 5,432 5,605 5,425 5,475

Exports (mil. Bu.) 1,867 1,901 2,294 2,438 2,100 2,050

Total Use (mil. Bu.) 13,748 13,664 14,649 14,799 14,230 14,130

Ending Stocks (mil. Bu.) 1,731 1,737 2,293 2,140 2,360 2,181

Season Average Price ($ per Bu.) $3.70 $3.61 $3.36 $3.36 $3.60 $3.60

http://www.farmdoc.Illinois.edu http://farmdocdaily.illinois.edu Data: WASDE

Corn Production

http://www.farmdoc.Illinois.edu http://farmdocdaily.illinois.edu

12.4 12.3

10.8

13.814.2

13.6

15.1

14.614.4

13.9

2.3

2.93.2 3.1

3.3

2.6

3.9

3.2

4.0 4.0

1.0 0.81.1 1.0 1.2 1.2

1.61.3

2.0 2.0

0.50.9 0.8

1.2 1.10.9 1.1 0.9

1.4 1.4

0

2

4

6

8

10

12

14

16

2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17 2017/18 2018/19 2019/20

Bill

ion

of

Bu

she

ls

United States Brazil Argentina UkraineData: NASS

U.S. Feed and Residual Use and Grain Consuming Animal Units

http://www.farmdoc.Illinois.edu http://farmdocdaily.illinois.edu

80

85

90

95

100

105

3,000

3,500

4,000

4,500

5,000

5,500

6,000

6,500

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Millio

n A

nim

al U

nitsM

illi

on

s o

f B

us

he

ls

Feed and Residual Use Grains Consuming Animal Units

Data: NASS

U.S. Corn Used for Ethanol

http://www.farmdoc.Illinois.edu http://farmdocdaily.illinois.edu

630707

9961,168

1,323

1,603

2,119

3,049

3,709

4,591

5,019 5,000

4,641

5,1245,200 5,224

5,432

5,605

5,425 5,475

0

1,000

2,000

3,000

4,000

5,000

6,000

Mill

ion

s o

f B

ush

els

Data: WASDE

U.S Ethanol Exports by Marketing Year

http://www.farmdoc.Illinois.edu http://farmdocdaily.illinois.edu Data: EIA * Through June

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

World Brazil Canada China India South Korea Mexico Netherlands Peru Phillippines

Mill

ion

s o

f G

allo

ns

2013-14 2014-15 2015-16 2016-17 2017-18 2018-19*

U.S. Corn Exports

http://www.farmdoc.Illinois.edu http://farmdocdaily.illinois.edu

2,134 2,125

2,437

1,849

1,979

1,831

1,539

730

1,9211,867 1,899

2,294

2,438

2,1002,050

0

500

1,000

1,500

2,000

2,500

3,000

2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17 2017/18 2018/19 2019/20

Mil

lio

ns

of

Bu

sh

els

World Mexico Japan South Korea Columbia

Data: FAS GATS

Corn Total Commitments through July 18: Last Two Marketing Years

http://www.farmdoc.Illinois.edu http://farmdocdaily.illinois.edu Data: FAS Export Sales

0.0, EU-27

500.0, Japan

76.0, Taiwan

18.9, China

145.5, S. Korea

20.9, Egypt

184.2, Columbia

610.7, Mexico

78.4, Peru

331.0, All Others and Unkown

2018-19 TOTAL COMMITMENTS THROUGH AUGUST 1 (MILLIONS OF BUSHELS)

World Total Commitments = 1,966 million bushels

75.5, EU-27

452.7, Japan

95.8, Taiwan

20.3, China

229.8, S. Korea

47.0, Egypt

183.6, Columbia

596.9, Mexico

125.9, Peru

531.4, All Others and Unkown

2017-18 TOTAL COMMITMENTS THROUGH AUGUST 1 (MILLIONS OF BUSHELS)

World Total Commitments = 2,359 million bushels

U.S. Corn Stocks to Use Ratio and Average Farm Price

http://www.farmdoc.Illinois.edu http://farmdocdaily.illinois.edu

$0

$1

$2

$3

$4

$5

$6

$7

$8

0%

5%

10%

15%

20%

25%

2000/01 2001/02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17 2017/18 2018/19 2019/20

Do

llars

pe

r Bu

sh

el

Pe

rce

nt

Corn Stocks to Use Ratio Weighted Avg. Farm Price

Data: WASDE

y = 1.8749t + 59.275R² = 0.9079

0

20

40

60

80

100

120

140

160

180

200

bu

. pe

r a

c.

Data: NASS

U.S. Average Corn Yield

http://www.farmdoc.Illinois.edu http://farmdocdaily.illinois.edu

Corn Yield by State Aug. 1, 2019 Bushels and Change from Previous Year

http://www.farmdoc.Illinois.edu http://farmdocdaily.illinois.edu

0.8

10.2

-15.3

10.2

-12.1

8.4

1.7

4.4

-0.9

-4.8

4.3 4.8

2.3

11.5

8.7

-3.1-1.7 -1.1

5.7

-12.2

-5.8

0.0

4.43.6

-0.4 -0.5

7.1

-2.0

-20

-15

-10

-5

0

5

10

15

bu

. p

er

ac.

Final U.S. Corn Yield Estimate Minus August Forecast

60,000

65,000

70,000

75,000

80,000

85,000

90,000

95,000

100,000

tho

usan

ds

Planted

Harvested

Data: NASS

Planted and Harvested Acreage of Corn

http://www.farmdoc.Illinois.edu http://farmdocdaily.illinois.edu

2019 Corn Planted Area

(000) Acres and Change from Previous Year

90 Mil. Acres of Corn Planted in U.S. in 2019

Up 0.9 Mil. Acres from 2018

http://www.farmdoc.Illinois.edu http://farmdocdaily.illinois.edu

Corn Balance Sheet

2018-19

USDA

Forecast

2018-19

Forecast

2019-20

USDA

Forecast

2019-20

Forecast High

Yield

2019-20

Forecast

Lower Yield

Supply: Planted Acreage (mill. Ac.) 89.1 89.1 90.0 90.0 90.0

Harvested Acreage (mill. Ac.) 81.7 81.7 82.0 82.0 82.0

Yield (Bu. / Ac.) 176.4 176.4 169.5 166 160

Total Production(mill. Bu.) 14,420 14,420 13,901 13,612 13,120

Beginning Stocks(mill. Bu.) 2,140 2,140 2,360 2,400 2,400

Imports (mill. Bu.) 30 30 50 50 50

Total Supply (mill. Bu.) 16,590 16,590 16,311 16,062 15,570

Consumption: Feed and Residual (mill. Bu.) 5,275 5,275 5,175 5,175 5,140

Food, Seed, and Industrial (mill. Bu.) 6,855 6,855 6,905 6,880 6,880

Ethanol (mill. Bu.) 5,425 5,425 5,475 5,450 5,450

Exports (mill. Bu.) 2,100 2,060 2,050 2,010 1,975

Total Consumption (mill. Bu.) 14,230 14,190 14,130 14,065 13,995

Ending Stocks (mill. Bu.) 2,360 2,400 2,181 1,997 1,575Stocks-to-Use 16.6% 16.9% 15.4% 14.1% 11.2%

Average Price ($/bu.) $3.60 $3.60 $3.60 $3.85 $4.25

Monthly Corn Price Index for Comparable Years

80

100

120

140

160

180

200

May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Ind

ex

on

Ma

y P

revio

us

MY

1993-94 1995-96

1993: Carry In 2.11 Billion Bushels; Stocks/Use 92/93 = 25%

93/94 Stocks/Use ended at 11.1%

1995: Carry In 1.56 Billion Bushels; Stocks/Use 94/95 = 16.6%

95/96 Stocks/Use ended at 5%

2019: May U.S. Avg. Corn Price = $3.63

http://www.farmdoc.Illinois.edu http://farmdocdaily.illinois.edu

Illinois Monthly Average Corn Price

http://www.farmdoc.Illinois.edu http://farmdocdaily.illinois.edu

$0

$1

$2

$3

$4

$5

$6

$7

$8

Jan

-60

Mar

-61

May

-62

Jul-

63

Sep

-64

No

v-6

5

Jan

-67

Mar

-68

May

-69

Jul-

70

Sep

-71

No

v-7

2

Jan

-74

Mar

-75

May

-76

Jul-

77

Sep

-78

No

v-7

9

Jan

-81

Mar

-82

May

-83

Jul-

84

Sep

-85

No

v-8

6

Jan

-88

Mar

-89

May

-90

Jul-

91

Sep

-92

No

v-9

3

Jan

-95

Mar

-96

May

-97

Jul-

98

Sep

-99

No

v-0

0

Jan

-02

Mar

-03

May

-04

Jul-

05

Sep

-06

No

v-0

7

Jan

-09

Mar

-10

May

-11

Jul-

12

Sep

-13

No

v-14

Jan

-16

Mar

-17

May

-18

Do

llars

pe

r B

ush

el

Mean Price: $4.36Standard Deviation 29% of the mean

Mean Price: $1.14Standard deviation 12% of mean

Mean Price: $2.44Standard Deviation 20% of mean

•Thank You

•Questions?