Crop Outlook

University Extension/Department of Economics

Crop Outlook

Farm Management In-ServiceAmes, Iowa

Oct. 11, 2010

Chad HartAssistant Professor/Grain Markets Specialist

[email protected]


U.S. Corn Supply and Use

Source: USDA

2007 2008 2009 2010

Area Planted (mil. acres) 93.5 86.0 86.5 88.3

Yield (bu./acre) 150.7 153.9 164.7 155.8

Production (mil. bu.) 13,038 12,092 13,110 12,664

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 14,791 14,382

Feed & Residual (mil. bu.) 5,913 5,182 5,167 5,400

Ethanol (mil. bu.) 3,049 3,709 4,560 4,700

Food, Seed, & Other (mil. bu.) 1,338 1,316 1,370 1,380

Exports (mil. bu.) 2,437 1,849 1,987 2,000

Total Use (mil. bu.) 12,737 12,056 13,084 13,480

Ending Stocks (mil. bu.) 1,624 1,673 1,708 902

Season-Average Price ($/bu.) 4.20 4.06 3.55 5.00

University Extension/Department of EconomicsSource: USDA-NASS


Translates to a yield in the 170-175 bu. range

Translates to a yield around 160 bu.

Source: USDA-NASS


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 44.4

Production (mil. bu.) 2,677 2,967 3,359 3,408

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 3,569

Crush (mil. bu.) 1,803 1,662 1,752 1,665

Seed & Residual (mil. bu.) 93 106 111 140

Exports (mil. bu.) 1,159 1,279 1,498 1,520

Total Use (mil. bu.) 3,056 3,047 3,361 3,305

Ending Stocks (mil. bu.) 205 138 151 265

Season-Average Price ($/bu.) 10.10 9.97 9.59 10.75

Source: USDA


Within a bushel of each other


World Corn Production

Source: USDA


Corn – Argentina & Brazil

Source: USDA

35

37

39

41

43

45M

illio

n a

cres

1800

2100

2400

2700

3000

3300

Mill

ion b

ush

els

Area Harvested Production


World Soybean Production

Source: USDA


Soybeans – Argentina & Brazil

Source: USDA

65

75

85

95

105M

illio

n a

cres

2700

3200

3700

4200

4700

Mill

ion b

ush

els

Area Harvested Production


La Niña Winter

Source: NOAA


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.


0

100

200

300

400

500

600

700

800

900

1,000

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Mill

ion b

ush

els

Corn Soybeans

Historical Export Levels

Source: USDA, FAS

Week 5 of marketing year


Corn Export Shifts

Source: USDA, FAS

Japan

Mexico

South Korea

Taiwan

Egypt

China

Unknown

Other

Total

-60

-40

-20

0

20

40

60

80

100

Mill

ion b

ush

els

39.4%

-11.5%

-40.7%

-21.3%

97.9%

71.5%

-14.7%

12.6%


Soy Export Shifts

Source: USDA, FAS

China

EUJapan

Mexico

Taiwan

Indonesia

Unknown

Other

Total

-20

-10

0

10

20

30

40

50

60

70

Mill

ion b

ush

els

6.1%

-82.1%-21.5%

42.9%

24.8%

-4.7%

58.6%

7.8%

252.1%


0

2

4

6

8

10

12

14

16

2010 2011 2012

Bill

ion

ga

llon

s

Conventional Biofuels Cellulosic Biofuels

Biodiesel Additional Advanced Biofuels

Renewable Fuels Standard (RFS)

CropYear

Billion Bushels

2009 4.11

2010 4.43

2011 4.64

2012 4.86


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

/20

07

4/3

/20

07

7/3

/20

07

10/3

/20

07

1/3

/20

08

4/3

/20

08

7/3

/20

08

10/3

/20

08

1/3

/20

09

4/3

/20

09

7/3

/20

09

10/3

/20

09

1/3

/20

10

4/3

/20

10

7/3

/20

10

10/3

/20

10

$ p

er

gallo

n


Projected 2010 Season-Average Corn Price

3.00

3.50

4.00

4.50

5.00

5.50

6/8

/20

09

7/8

/20

09

8/8

/20

09

9/8

/20

09

10/8

/20

09

11/8

/20

09

12/8

/20

09

1/8

/20

10

2/8

/20

10

3/8

/20

10

4/8

/20

10

5/8

/20

10

6/8

/20

10

7/8

/20

10

8/8

/20

10

9/8

/20

10

10/8

/20

10

$ p

er

bush

el

Futures USDA


Projected 2010 Season-Average Soy Price

8.00

8.50

9.00

9.50

10.00

10.50

11.00

6/8

/20

09

7/8

/20

09

8/8

/20

09

9/8

/20

09

10/8

/20

09

11/8

/20

09

12/8

/20

09

1/8

/20

10

2/8

/20

10

3/8

/20

10

4/8

/20

10

5/8

/20

10

6/8

/20

10

7/8

/20

10

8/8

/20

10

9/8

/20

10

10/8

/20

10

$ p

er

bush

el

Futures USDA


Projected 2011 Season-Average Corn Price

3.50

3.75

4.00

4.25

4.50

4.75

5.00

12/1

4/2

00

9

1/1

4/2

010

2/1

4/2

010

3/1

4/2

010

4/1

4/2

010

5/1

4/2

010

6/1

4/2

010

7/1

4/2

010

8/1

4/2

010

9/1

4/2

010

$ p

er

bush

el

Futures USDA


Projected 2011 Season-Average Soy Price

8.50

9.00

9.50

10.00

10.50

11.00

12/1

4/2

00

9

1/1

4/2

010

2/1

4/2

010

3/1

4/2

010

4/1

4/2

010

5/1

4/2

010

6/1

4/2

010

7/1

4/2

010

8/1

4/2

010

9/1

4/2

010

$ p

er

bush

el

Futures USDA


1.00

1.50

2.00

2.50

3.00

3.50

4.00

4.50

5.00$ p

er

Bush

el

Season-average Price Cost per Bushel

Iowa Corn Prices vs. CostsRight now, futures are in $5 range for 2010 and 2011 corn


2.00

3.00

4.00

5.00

6.00

7.00

8.00

9.00

10.00

11.00

$ p

er

Bu

shel

Season-average Price Cost per Bushel

Iowa Soybean Prices vs. CostsFutures are nearly $11 for 2010 and 2011 beans


3.40

3.60

3.80

4.00

4.20

4.40

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

$ p

er

bush

el

9.20

9.40

9.60

9.80

10.00

10.20

$ p

er

bush

el

Corn Soy

This YearCorn $4.70Soy $10.51


Thoughts for 2010 and BeyondGeneral economic conditions

Continued economic recovery is a major key for crop pricesLong-term oil price remain in the $90 range

Supply/demand concernsYield and production effects of Midwestern moisture and temperatureStocks: 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 $5.00, Soy $10.75Futures: Corn $5.01, Soy $10.96

2011/12: Futures: Corn $4.93, Soy $10.88


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/

Crop Outlook

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