Fall 2016 Crop Outlook Center for Commercial Ag Webinar 9 ... ·...

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Fall 2016 Crop Outlook Webinar September 13, 2016 Fall 2016 Crop Outlook Webinar Chris Hurt, Professor & Extension Ag. Economist Michael Langemeier, Professor & Associate Director James Mintert, Professor & Director

Transcript of Fall 2016 Crop Outlook Center for Commercial Ag Webinar 9 ... ·...

Page 1: Fall 2016 Crop Outlook Center for Commercial Ag Webinar 9 ... · Fall$2016$Crop$Outlook$Webinar,$September$13,$2016$ 164.7 171 174.4 100 110 120 130 140 150 160 170 180 90 92 94 96

Fall  2016  Crop  Outlook  Webinar  September  13,  2016  

Fall  2016  Crop  Outlook  Webinar    

Chris  Hurt,  Professor  &  Extension  Ag.  Economist    

Michael  Langemeier,  Professor  &  Associate  Director    

James  Mintert,  Professor  &  Director  

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Fall  2016  Crop  Outlook  Webinar,  September  13,  2016  

164.7

171 174.4

100

110

120

130

140

150

160

170

180

90 92 94 96 98 00 2 4 5 6 7 8 9 10 11 12 13 14 15 16

Corn Yield: 1990-2016

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Fall  2016  Crop  Outlook  Webinar,  September  13,  2016  

9.9  9.5  

9.0  

10.1  

11.8  11.1  

10.5  

13.1  

12.1  

13.1  12.4  12.4  

10.8  

13.8  14.2  

13.6  

15.1  

7  

8  

9  

10  

11  

12  

13  

14  

15  

0   1   2   3   4   5   6   7   8   9   10   11   12   13   14   15   16  

Billion

s  Corn  ProducEon  

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Fall  2016  Crop  Outlook  Webinar,  September  13,  2016  

19.5%  16.3%  

11.5%  9.4%  

19.8%  17.5%  

11.6%  12.7%  13.9%  13.1%  

8.6%  7.9%  7.4%  9.2%  

12.6%  12.5%  

16.5%  

8.8%  7.1%  6.4%  

4.4%  

8.6%  

15.6%  

6.7%  4.5%  4.5%  

6.6%  5.4%  4.6%  2.6%  

4.9%  4.9%  

9.0%  

0%  

10%  

20%  

30%  

40%  

50%  

0   1   2   3   4   5   6   7   8   9   10   11   12   13   14   15   16  

U.S.  Ending  Stocks  to  Use:  Corn  &  Soybeans  

Wheat  Corn  Beans  

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Fall  2016  Crop  Outlook  Webinar,  September  13,  2016  

Corn: USDA

9/12/16 USDA 12/13 13/14 14/15 15/16 16/17

Carry In 989 821 1,232 1,731 1,716 (+10)

Production 10,755 13,829 14,216 13,601 15,093 (-60) Total Supply 11,932 14,686 15,479 15,397 16,859

Feed 4,336 5,036 5,317 5,200 5,650 (-25) FSI Non-Fuel 1,396 1,367 1,359 1,367 1,375

Ethanol 4,648 5,134 5,207 5,200 5,275 Exports 731 1,917 1,824 1,915(-10) 2,175

Total Use 11,111 13,454 13,748 13,682 14,475 Carry over 821 1,232 1,731 1,716 (+10) 2,384 (-25) U.S. Price $6.89 $4.46 $3.70 $3.60 $3.20 (+.05)

$2.90-$3.50

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Fall  2016  Crop  Outlook  Webinar,  September  13,  2016  

       Equaled  10  Year  Lows:  BoNom???  

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Fall  2016  Crop  Outlook  Webinar,  September  13,  2016  

Corn  Summary  •  -­‐Record  large  crop,  but  Record  large  usage  

•  -­‐Growing  inventories-­‐highest  in  11  years.  USDA  MYA  price  $3.20  

•  -­‐Indiana  storage  fully  uElized  

•  -­‐Some  basis  erosion  if  storage  is  short  at  harvest  

•  -­‐Farmers  expected  to  hold  Eghtly  at  harvest  

•  -­‐Market  carry  of  about  37  cents  per  bushel  into  spring/summer  

•  -­‐On-­‐farm  storage  returns  expected  to  be  favorable    

•  -­‐Price  range  of  cash  price  from  low-­‐$3.00  to  $3.70  

•  -­‐Less  corn  in  2017  and  30-­‐40  cent  higher  prices  

•  -­‐Short  Storage??  Corn  storage  returns  expected  to  be  higher  for  corn  than  soybeans  

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Fall  2016  Crop  Outlook  Webinar,  September  13,  2016  

34.1 34.2

37.6

32.6

41.4

35.3

37.6 38.9 38.9

36.6 38.1

39.6 38.0

33.9

42.2 43.0 42.7 41.7

39.7

44 43.5 41.9

40

44

47.5 48

50.6

y = 0.4666x + 33.675 R² = 0.6843

30 32 34 36 38 40 42 44 46 48 50

90 91 92 93 94 95 96 97 98 99 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16

U.S. Bean Yield 1990-2016

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Fall  2016  Crop  Outlook  Webinar,  September  13,  2016  

2.76  2.89  

2.76  2.45  

3.12  3.06  3.19  

2.68  2.97  

3.51  3.33  

3.09  3.03  

3.36  

3.93  3.93  4.20  

1.0  

1.5  

2.0  

2.5  

3.0  

3.5  

4.0  

4.5  

0   1   2   3   4   5   6   7   8   9   10   11   12   13   14   15   16  

Billion

s  Soybean  ProducEon  

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Fall  2016  Crop  Outlook  Webinar,  September  13,  2016  

Soybeans: USDA

9/12/16 USDA 12/13 13/14 14/15 15/16 16/17

Carry In 169 141 92 191 195 (-60) Production 3,034 3,358 3,927 3,930 4,201 (+141)

Total Supply 3,239 3,570 4,052 4,145 4,426 (+80) Seed & Res. 89 97 143 110 126

Crush 1,689 1,734 1,875 1,900 1,950 (+10) Exports 1,320 1,647 1,843 1,940 (+60) 1,985 (+35)

Total Use 3,098 3,478 3,861 3,949 4,061 (+35) Carry Over 141 92 191 195 (-60) 365 (+35) U.S. Price $14.40 $13.00 $10.10 $8.95 $9.05 (-.05)

$8.30-$9.80

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Fall  2016  Crop  Outlook  Webinar,  September  13,  2016  

       BoNom???  

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Fall  2016  Crop  Outlook  Webinar,  September  13,  2016  

68%  

81%  85%  

72%  

100%  

95%  

104%  

87%  86%  

92%  

101%   101%  

108%  

116%  

90%  

96%  

114%  110%  

99%  

102%  

97%  

87%  

69%  

101%  

107%  

87%  

103%  

60%  

70%  

80%  

90%  

100%  

110%  

120%  

88   90   92   94   96   98   00   2   4   6   8   10   12   14   16  

Indiana  Grain  Capacity  UOlizaOon  

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Fall  2016  Crop  Outlook  Webinar,  September  13,  2016  

3.15   3.15  3.20  

3.30   3.32   3.32  

3.41   3.43  

3.52   3.50   3.49  

3.15   3.16   3.17   3.18   3.19   3.20   3.21   3.23   3.24   3.25   3.26  

$3.05  $3.10  $3.15  $3.20  $3.25  $3.30  $3.35  $3.40  $3.45  $3.50  $3.55  $3.60  

Oct   Nov   Dec   Jan   Feb   Mar   Apr   May   Jun     Jul   Aug  

Corn  Bids  Roughly  based  on  Central  Indiana  Sept  12,  2016  

Expected  Bid   Harvest  Bid  +  Interest  Costs  

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Fall  2016  Crop  Outlook  Webinar,  September  13,  2016  

0.12   0.12  

0.20  0.20  0.28  0.25  

0.23  

-­‐0.09   -­‐0.08  

-­‐$0.30  

-­‐$0.20  

-­‐$0.10  

$0.00  

$0.10  

$0.20  

$0.30  

$0.40  

O   N   D   J   F   M   A   M   J   J   A  

EsOmated  Net  Corn  Storage  Returns:    

On-­‐Farm  Storage   Commercial  Storage  

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Fall  2016  Crop  Outlook  Webinar,  September  13,  2016  

9.36  9.39  

9.48  9.52  

9.58   9.59  9.63  

9.67  

9.72   9.71  

9.60  

9.36  9.39  

9.42  9.45  

9.49  9.52  

9.55  9.58  

9.61  9.65  

9.68  

$9.30  

$9.35  

$9.40  

$9.45  

$9.50  

$9.55  

$9.60  

$9.65  

$9.70  

$9.75  

$9.80  

Oct   Nov   Dec   Jan   Feb   Mar   Apr   May   Jun     Jul   Aug  

Bean  Bids  Roughly  based  on  Central  Indiana:  Sept  12,  2016:    

Cash  Bid   Current  Bid  +  Interest  

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Fall  2016  Crop  Outlook  Webinar,  September  13,  2016  

0.00   0.00  0.06   0.07  

0.09   0.07   0.08   0.09  0.11  

0.06  

-­‐$0.50  

-­‐$0.40  

-­‐$0.30  

-­‐$0.20  

-­‐$0.10  

$0.00  

$0.10  

$0.20  

O   N   D   J   F   M   A   M   J   J   A  

EsOmated  Net  Soybean  Storage  Returns:    

On-­‐Farm  Storage   Commercial  Storage  

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Fall  2016  Crop  Outlook  Webinar,  September  13,  2016  

0.28  

0.11  

-­‐$0.10  

$0.00  

$0.10  

$0.20  

$0.30  

$0.40  

O   N   D   J   F   M   A   M   J   J   A  

EsOmated  Corn  versus  Bean  Storage  Returns:    On-­‐Farm  Storage:      September    2016      

Corn   Soybeans  

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Fall  2016  Crop  Outlook  Webinar,  September  13,  2016  

•  -­‐Huge  record  yield,  record  crop,  and  record  usage  

•  -­‐Inventories  growing  to  highest  level  in  10  years  

•  -­‐USDA  MYA  U.S.  price  at  $9.05  

•  -­‐Exports  will  be  front  end  loaded:  Compensate  for  S.A.  losses  

•  -­‐If  S.  American  crop  is  normal  bean  prices  could  struggle  ader  Feb  

•  -­‐Market  carry  in  soybeans  about  35  cents  to  spring/summer  

•  -­‐Current  expected  storage  returns  for  on-­‐farm  storage  modest  

•  -­‐Possible  price  range  high-­‐$8.00’s  to  $10.25  

•  -­‐More  bean  acres  in  2017  and  20  to  30  cents  lower  prices    

Soybean  Summary  

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Fall  2016  Crop  Outlook  Webinar,  September  13,  2016  

FerOlizer  Prices  ($  per  Ton)  Source:  USDA’s  Illinois  Produc-on  Cost  Items  Report  

Item   9/3/15   9/1/16   %  Change  

Anhydrous  Ammonia  

673.00   502.84   -­‐25.3%  

Urea   447.70   314.73   -­‐29.7%  

18-­‐46-­‐0    

546.96   423.11   -­‐22.6%  

Potash   447.22   287.61   -­‐35.7%  

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Fall  2016  Crop  Outlook  Webinar,  September  13,  2016  

$0.00  

$1.00  

$2.00  

$3.00  

$4.00  

$5.00  

$6.00  

$7.00  

2007   2008   2009   2010   2011   2012   2013   2014   2015   2016   2017  

Variable  Cost,  Overhead  Cost,  and  Gross  Revenue  per  Bushel  RotaOon  Corn  in  Indiana  

Variable  Cost   Overhead  Cost   Gross  Revenue  

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Fall  2016  Crop  Outlook  Webinar,  September  13,  2016  

-­‐150  

-­‐100  

-­‐50  

0  

50  

100  

150  

200  

250  

2008   2009   2010   2011   2012   2013   2014   2015   2016   2017  

Dollars  per  Acre  

Earnings  per  Acre  for  Corn/Soybean  RotaOon  (Average  ProducOvity  Soil)  

Annual   Average  

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Fall  2016  Crop  Outlook  Webinar,  September  13,  2016  

Corn  Price  Required  to  Generate  Equivalent  Corn  and  Soybean  Returns  @  Given  Soybean  Prices  

Soybean  Price   Low  ProducOvity  

(C=132;  SB=40)  

Avg.  ProducOvity  

(C=165;  SB=50)  

High  ProducOvity  

(C=198;  SB=60)  

$8.50   $3.80   $3.74   $3.58  

$9.00   $3.95   $3.89   $3.73  

$9.50   $4.11   $4.04   $3.88  

$10.00   $4.26   $4.19   $4.04  

$10.50   $4.41   $4.35   $4.19  

$11.00   $4.56   $4.50   $4.34  

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Fall  2016  Crop  Outlook  Webinar  September  13,  2016  

purdue.edu/commercialag  

purdue.edu/agbarometer