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![Page 1: “Implication of 2012 drought for US, Ukraine and global markets: the FAPRI outlook By William H. Meyers and Kateryna Goychuk Howard Cowden Professor and.](https://reader036.fdocuments.in/reader036/viewer/2022062412/5a4d1afe7f8b9ab059985bd9/html5/thumbnails/1.jpg)
“Implication of 2012 drought for US , Ukraine and global markets: the
FAPRI outlookBy
William H. Meyers and Kateryna GoychukHoward Cowden Professor and PhD Candidate
Agricultural and Applied EconomicsFAPRI at MU
Grain Congress 16 OctoberKyiv, Ukraine
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AgendaWhat is the FAPRI market outlook?
Implications for Grain markets
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What is a baseline and how is it used?
It is not a forecastIt is a projection based on a set of reasonable assumptions aboutMacroeconomic outlookTechnology outlook Policy outlook
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Ethanol growth slows, Jan 2012
Source: USDA FAPRI-MU baseline, January 2012
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So what happened this year?US and Kaz-Rus-Ukr drought greatly changed market outlook
FAPRI updated the baseline in August
Briefly review that change A taste of August 2012 outlook
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Not just maize, but wheat too (USDA WASDE Oct 11, 2012)
Production (mil mt)
2011/12 2012/13 change
Coarse Grains 1148.9 1110.1 -38.8 USA 323.7 284.2 -39.5 Rus + Ukr 66.1 56.9 -9.2Wheat 695.0 653.0 -42 Kaz+Rus + Ukr 101.1 64.0 -37.1 USA 54.4 61.8 7.4
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U.S. maize farm price projections, Jan 2012
Sources: FAPRI-MU baseline, Jan. 2012; USDA, May 2012; CME Dec. contracts, June 8, 2012
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U.S. maize farm price projections, August 2012
0
50
100
150
200
250
300
350
05/06 07/08 09/10 11/12 13/14 15/16 17/18 19/20 21/22
Dol
lars
per
met
ric to
n
FAPRI Jan USDA Oct Dec fut. Sept 8 FAPRI Aug
Sources: FAPRI-MU baseline, Jan. and Aug 2012; USDA, Oct 2012; CME Dec. contracts, Oct 11 2012
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Ethanol also adjusts to high price
Source: USDA FAPRI-MU baseline, January 2012 and August 2012 update
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World Grain Prices, Aug update
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World Oilseed Prices, Aug update
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Source: FAPRI-MU August 2012 stochastic baseline, Refiners’ acquisition price
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Price volatility to continue
Source: FAPRI-MU August 2012 stochastic baseline. Maize FOB Gulf prices
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Maize price uncertainty
Source: FAPRI-MU August 2012 stochastic baseline, US FOB GULF PRICE
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Source: FAPRI-MU August 2012 stochastic baseline, HRW WHEAT US FOB GULF
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Source: FAPRI-MU August 2012 stochastic baseline
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AgendaWhat is the FAPRI market outlook?
Implications for Grain markets
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What to expectContinued prices higher than before
the 2007/08 price surgeContinued price volatility from year
to year and from week to weekBeware of many uncertainties that
can impact markets at any time.
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Unknowns and uncertaintiesHigh volatility likely to continueMajor uncertainties in the markets
Policy proposals and policy reactions Oil/Energy pricesExchange ratesWorld price surgesFinancial crisesWeather events/climate change
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Diakuju!!