2013 Agricultural Commodity Outlook

transcript

Extension and Outreach/Department of Economics

Iowa Chapter of ASFMRA Annual MeetingAmes, IowaFeb. 7, 2013

Chad HartAssociate Professor/Grain Markets Specialist

chart@iastate.edu515-294-9911

Cattle Crush Margin

Source: ISU Extension

The Crush Margin is the return after the feeder steer and corn costs.Live weight: 1250 pounds Feeder weight: 750 pounds Corn: 50 bushels per head

Hog Crush Margin

Source: ISU Extension

The Crush Margin is the return after the pig, corn and soybean meal costs.Carcass weight: 200 pounds Pig price: 50% of 5 mth out lean hog futuresCorn: 10 bushels per pig Soybean meal: 150 pounds per pig

U.S. Meat Production & Prices

Source: USDA-WAOB

U.S. Corn Supply and Use2008 2009 2010 2011 2012

Area Planted (mil. acres) 86.0 86.4 88.2 91.9 97.2

Yield (bu./acre) 153.9 164.7 152.8 147.2 123.4

Production (mil. bu.) 12,092 13,092 12,447 12,360 10,780

Beg. Stocks (mil. bu.) 1,624 1,673 1,708 1,128 989

Imports (mil. bu.) 14 8 28 29 100

Total Supply (mil. bu.) 13,729 14,774 14,182 13,516 11,869

Feed & Residual (mil. bu.) 5,182 5,125 4,795 4,548 4,450

Ethanol (mil. bu.) 3,709 4,591 5,019 5,011 4,500

Food, Seed, & Other (mil. bu.) 1,316 1,370 1,407 1,426 1,367

Exports (mil. bu.) 1,849 1,980 1,834 1,543 950

Total Use (mil. bu.) 12,056 13,066 13,055 12,527 11,267

Ending Stocks (mil. bu.) 1,673 1,708 1,128 989 602

Season-Average Price ($/bu.) 4.06 3.55 5.18 6.22 7.40

Source: USDA-WAOB

U.S. Soybean Supply and Use2008 2009 2010 2011 2012

Area Planted (mil. acres) 75.7 77.5 77.4 75.0 77.2

Yield (bu./acre) 39.7 44.0 43.5 41.9 39.6

Production (mil. bu.) 2,967 3,359 3,329 3,094 3,015

Beg. Stocks (mil. bu.) 205 138 151 215 169

Imports (mil. bu.) 13 15 14 16 20

Total Supply (mil. bu.) 3,185 3,512 3,495 3,325 3,204

Crush (mil. bu.) 1,662 1,752 1,648 1,703 1,605

Seed & Residual (mil. bu.) 106 110 130 91 119

Exports (mil. bu.) 1,279 1,499 1,501 1,362 1,345

Total Use (mil. bu.) 3,047 3,361 3,280 3,155 3,070

Ending Stocks (mil. bu.) 138 151 215 169 135

Season-Average Price ($/bu.) 9.97 9.59 11.30 12.50 14.25

Source: USDA-WAOB

Prices

Corn Soybeans

Projected Corn Yields

Top: 2012 YieldBottom: Change from 2011Units: Bushels/acre

Projected Soybean Yields

Top: 2012 YieldBottom: Change from 2011Units: Bushels/acre

World Corn Production

Source: USDA-WAOB

World Soybean Production

Source: USDA-WAOB

World Weather

Source: USDC and USDA

Corn Export Shifts

Source: USDA-FAS

9/1 10/1 11/1 12/1 1/1 2/1 3/1 4/1 5/1 6/1 7/1 8/1

2010 2011 2012

Soy Export Shifts

Source: USDA-FAS

9/1 10/1 11/1 12/1 1/1 2/1 3/1 4/1 5/1 6/1 7/1 8/1

2010 2011 2012

Corn Grind for Ethanol

Sep-10 Jan-11 May-11 Sep-11 Jan-12 May-12 Sep-12 Jan-13

Ethanol Stocks

Sep-10 Jan-11 May-11 Sep-11 Jan-12 May-12 Sep-12 Jan-13

Ethanol Gasoline

Fuel Prices

U.S. Blended Gasoline Consumption

Source: DOE-EIA, via USDA-ERS

7.6 bil. gal.

7.4 bil. gal.

Current Corn Futures

Source: CME Group, 2/5/2013

Current Soybean Futures

Source: CME Group, 2/5/2013

12.8212.44

Total Acreage Shift

Source: USDA-NASS

Acreage Shift by Crop

Source: USDA-NASS

Acreage change from 2011Units: 1,000 acres

Acreage Shift by State

Source: USDA-NASS

Top: Planted in 2012Bottom: Change from 2011Units: 1,000 acres

Thoughts for 2013 and BeyondSupply/demand concerns

Soil moisture issuesBiofuel and export strengthWorldwide response to drought-induced pricing

2012/13

Futures

(2/5/13)

2013/14

Futures

(2/5/13)

Corn $7.40 $6.78 $5.57

Soybeans $14.25 $14.18 $12.82

Risk managementCrop insurancePrice protection

Thank you for your time!

Any questions?

My web site:http://www.econ.iastate.edu/~chart/

Iowa Farm Outlook:http://www.econ.iastate.edu/ifo/

Ag Decision Maker:http://www.extension.iastate.edu/agdm/

2013 Agricultural Commodity Outlook

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