Economic Research Service USDA Grains & Oilseeds Outlook Agricultural Outlook Forum 2012 Edward W....

Economic Research Service

USDA Grains & Oilseeds OutlookAgricultural Outlook Forum 2012

Edward W. AllenU.S. Department of AgricultureEconomic Research Service

[email protected]


U.S. Producer Prices Are High

Monthly Prices Recieved

23456789

1011121314

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

U.S. $/bushel

Soybean

Wheat

Corn

Source: NASS, USDA


More Acres Going to Corn and Wheat in 2012

280276


Corn Price To Slip More Than Soy

2000 2002 2004 2006 2008 20102012

1

6

11

Season Average Price Recieved

U.S. $/bushel

Soybean

Wheat

Corn

Source: NASS, USDA


Key Drivers of USDA Projections

• Expanding U.S. and world area and production

• U.S. corn yield recovers after 2 years below trend • U.S. corn use for ethanol declines slightly • China’s import demand uncertain.

• South America’s 2011/12 problems support U.S. 2012/13 demand prospects.

• Record World wheat supplies overhang the market.



World Corn Production and Consumption

600

650

700

750

800

850

2002/03 2005/06 2008/09 2011/12Year

Million tonnes

Production

Consumption

Source: USDA


U.S. Corn Area Up, Yields Fall For 2 Years

50000

55000

60000

65000

70000

75000

80000

85000

90000

1990/91 1993/94 1996/97 1999/00 2002/03 2005/06 2008/09 2011/12

1000 acres

100

125

150

175

200

bushels/acreCorn area harvested (left axis) Yield (right axis)

Source: NASS, USDA


World Corn Area Expanding

100

125

150

175

1981/1982 1986/1987 1991/1992 1996/1997 2001/2002 2006/2007 2011/2012

Year

Million hectares

World Corn Area Harvested

Source: USDA


0

5

10

15

20

25

2

2.2

2.4

2.6

2.8

3

3.2

3.4

3.6

3.8

Production (left axis) Area (right axis)

Argentina: Corn Production Stagnates

Million tonsMillion hectares

Source: USDA


0

5

10

15

20

25

0.5

1

1.5

2

2.5

3

3.5

4

Production (left axis) Area (right axis)

Ukraine: Corn Production Skyrockets

Million tons Million hectares

Source: USDA


U.S. Corn Yield Trend

100

120

140

160

180

Bushels/acreYield -1 STE Trd 90-10 +1 STE

Source: NASS, USDA


0

1

2

3

4

5

1990/91 1997/98 2004/05 2011/12

Crop year

U.S. Ethanol: Corn Use to Decline Slightly

Billion bushels

Source: USDA



Ethanol and RBOB Nearby Futures Prices

Note: Ethanol prices based on CBOT nearby futures. RBOB (Reformulated Gasoline Blend Stock) based on NYME nearby futures.

Reformulate Gasoline Blend Stock (RBOB)

Ethanol

$0.852/16/12


Weekly Ethanol Stocks

Source: DOE-Energy Information Administration, Weekly Petroleum Status Report.


Ethanol Producer Net Returns Above Variable Costs / Spot prices

Note: USDA-WAOB estimates based on USDA-AMS plant reports and DOE-EIA estimates and forecasts for natural gas and electricity prices.

+ 86 cents / gal. (11/23/11)

- 14 cents / gal. (2/17/12)


U.S. Blended Gasoline Consumption

Source: DOE-Energy Information Administration, Short-term Energy Outlook (STEO) and Annual Energy Outlook (AEO).

7.6 bil. gal.

7.4 bil. gal.


China’s Soybean Import Growth Leads World

Soybean Imports

Corn Imports

0

10

20

30

40

50

60

1997/98 1999/00 2001/02 2003/04 2005/06 2007/08 2009/10 2011/12

Million tonnes

Economic Research ServiceSource: USDA


0

20

40

60

80

100

120

Corn Soymeal Swine meat

China: Data Issues Increase Uncertainty, Corn and Soymeal Feed and Residual Use Do Not

Track Well With Swine Production

Million tonnes

Soybean Meal

Source: USDA


China’s High Corn Prices Support Imports


U.S. Soybean Production Takes a Backseat, Drought Hits Brazil and Argentina in 2011/12

30

40

50

60

70

80

90

100

110

120

130

Million tonnes

U.S.

Argentina and Brazil

Source: USDA


Brazil: Double Cropping to Boost Corn Area With Soybeans

9,000

11,000

13,000

15,000

17,000

19,000

21,000

23,000

25,000

1990 1993 1996 1999 2002 2005 2008 2011

Corn Soybeans

1000 hectares

Harvested area

Harvested area

Source: USDA


South American October 1, Soybean Beginning Stocks

0

10

20

30

40

50

60Million Tonnes

-8 million tons


World Wheat Production and Consumption

500

550

600

650

700

1995/96 1997/98 1999/00 2001/02 2003/04 2005/06 2007/08 2009/10 2011/12

Million tonnes

ProductionConsumption

Source: USDA


Record World Wheat Stocks

0

50

100

150

200

250

Mill

ion

tonn

es

Rest of the World

United States

China

Source: USDA


Russia’s Wheat Yields Highly Variable

1

1.5

2

2.5

3

3.5

1987/88 1989/90 1991/92 1993/94 1995/96 1997/98 1999/00 2001/02 2003/04 2005/06 2007/08 2009/10 2011/12

Tonnes per hectare

Russia CV=.181United States CV= .096

Source: USDA


Key Developments To Watch

• Soybean and corn crops currently growing in South America,

• Prices and weather ahead of U.S. spring planting,

• China’s soybean and corn import growth,

• Gas prices, gasoline consumption, and ethanol margins,

• Global macro-economic growth,

• U.S. dollar.


Economic Research Service USDA Grains & Oilseeds Outlook Agricultural Outlook Forum 2012 Edward W....

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