Crop Markets

Extension and Outreach/Department of Economics

Crop Markets

Denison, IowaAugust 25, 2011

Chad HartAssistant Professor/Grain Markets Specialist

[email protected]


U.S. Corn Supply and Use2008 2009 2010 2011

Area Planted (mil. acres) 86.0 86.4 88.2 92.3

Yield (bu./acre) 153.9 164.7 152.8 153.0

Production (mil. bu.) 12,092 13,092 12,447 12,914

Beg. Stocks (mil. bu.) 1,624 1,673 1,708 940

Imports (mil. bu.) 14 8 30 20

Total Supply (mil. bu.) 13,729 14,774 14,185 13,874

Feed & Residual (mil. bu.) 5,182 5,140 5,000 4,900

Ethanol (mil. bu.) 3,709 4,568 5,020 5,100

Food, Seed, & Other (mil. bu.) 1,316 1,371 1,400 1,410

Exports (mil. bu.) 1,849 1,987 1,825 1,750

Total Use (mil. bu.) 12,056 13,066 13,245 13,160

Ending Stocks (mil. bu.) 1,673 1,708 910 714

Season-Average Price ($/bu.) 4.06 3.55 5.25 6.70


U.S. Soybean Supply and Use2008 2009 2010 2011

Area Planted (mil. acres) 75.7 77.5 77.4 75.0

Yield (bu./acre) 39.7 44.0 43.5 41.4

Production (mil. bu.) 2,967 3,359 3,329 3,056

Beg. Stocks (mil. bu.) 205 138 151 230

Imports (mil. bu.) 13 15 15 15

Total Supply (mil. bu.) 3,185 3,512 3,495 3,301

Crush (mil. bu.) 1,662 1,752 1,645 1,635

Seed & Residual (mil. bu.) 106 110 125 111

Exports (mil. bu.) 1,279 1,499 1,495 1,400

Total Use (mil. bu.) 3,047 3,361 3,265 3,146

Ending Stocks (mil. bu.) 138 151 230 155

Season-Average Price ($/bu.) 9.97 9.59 11.35 13.50


Corn Area

Source: USDA-NASS


Soybean Area

Source: USDA-NASS



Projected Corn Yields

Source: USDA-NASS


Projected Soybean Yields

Source: USDA-NASS


Crop Conditions

Source: USDA-NASS

55

58

61

64

67

70

% G

oo

d t

o E

xcelle

nt

Corn Soybeans


Crop Conditions & Corn Yields

80

90

100

110

120

130

140

150

160

170

Bu

she

ls p

er

acr

e

Actual Yield Projected Yield 20-yr Trend


Crop Conditions & Corn Yields

157

158

159

160

161

162

24 25 26 27 28 29 30 31 32

Week

Bu

she

ls p

er

acr

e

50

55

60

65

70

75

%

Projected Yield % Good to Excellent


Crop Conditions & Soybean Yields

25

27

29

31

33

35

37

39

41

43

45

Bush

els

per

acr

e

Actual Yield Projected Yield 20-yr Trend


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

77

89

101

113M

illio

n a

cres

2700

3200

3700

4200

4700

Mill

ion b

ush

els

Area Harvested Production


Hog Crush Margin

Source: Shane Ellis, 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


Cattle Crush Margin

Source: Shane Ellis, 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


Corn vs. Wheat

Source: CME Group, 8/25/2011

6.00

6.50

7.00

7.50

8.00

8.50

9.00$ p

er

bush

el

Corn Wheat


0.4

0.5

0.6

0.7

0.8

0.9

1.0

1.1

1.2

1.3

1.4

Jan-03

Jan-04

Jan-05

Jan-06

Jan-07

Jan-08

Jan-09

Jan-10

Jan-11

Canada Mexico Brazil EU China South KoreaJapan Australia

Exchange Rates (Jan. 2003 = 1)

Source: USDA, ERS


Export Pace vs. Last Year

Source: USDA, FAS

-10%

-5%

0%

5%

10%

15%

20%

25%

30%

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

Corn Soy


Corn Export Shifts

Source: USDA, FAS

Japan Mexico

Taiwan

Egypt

Unknown

Other

South Korea

Total

China

-200

-150

-100

-50

0

50

100

Mill

ion b

ush

els

-7.8% -13.9%

-21.4%

-14.5%

3.4%

258.6%

-2.6%

-7.6%

-35.0%


Soybean Export Shifts

Source: USDA, FAS

China

EUJapan

Mexico Taiwan

Total

Other

Indonesia

Unknown

-60

-40

-20

0

20

40

60

80

100

Mill

ion b

ush

els

10.5%

-3.8%-13.6%

-1.6% -6.8% -8.2%

-19.3%

2.3%

21.9%


Corn Advance Export Sales

Source: USDA, FAS

0

100

200

300

400

500

600

700

12/3

0

1/1

3

1/2

7

2/1

0

2/2

4

3/1

0

3/2

4

4/7

4/2

1

5/5

5/1

9

6/2

6/1

6

6/3

0

7/1

4

7/2

8

8/1

1

8/2

5

Mill

ion b

ush

els

2011 Crop 2010 Crop


Corn Advance Export Sales

Source: USDA, FAS

Unknown37%

Other11%

Japan15%

Mexico24%

Egypt1%

South Korea5%

Taiwan1%

China6%


Soy Advance Export Sales

Source: USDA, FAS

0

100

200

300

400

500

600

700

12/3

0

1/1

3

1/2

7

2/1

0

2/2

4

3/1

0

3/2

4

4/7

4/2

1

5/5

5/1

9

6/2

6/1

6

6/3

0

7/1

4

7/2

8

8/1

1

8/2

5

Mill

ion b

ush

els

2011 Crop 2010 Crop


Soy Advance Export Sales

Source: USDA, FAS

Unknown13%

Other2%

Indonesia2%

Mexico2%

Japan1%

Taiwan0%

EU1%

China79%


Nearby Futures (Jan. 3, 2011 = 1)

0.90

1.00

1.10

1.20

1.30

1.40

1.501/3

/2011

1/1

7/2

011

1/3

1/2

011

2/1

4/2

011

2/2

8/2

011

3/1

4/2

011

3/2

8/2

011

4/1

1/2

011

4/2

5/2

011

5/9

/2011

5/2

3/2

011

6/6

/2011

6/2

0/2

011

7/4

/2011

7/1

8/2

011

8/1

/2011

8/1

5/2

011

Corn Ethanol Gasoline


Ethanol Margin

Source: CARD


-0.04

-0.02

0.00

0.02

0.04

0.06

0.08

0.10

0.12

0.14

0.16

1/3

/200

7

5/3

/200

7

9/3

/200

7

1/3

/200

8

5/3

/200

8

9/3

/200

8

1/3

/200

9

5/3

/200

9

9/3

/200

9

1/3

/201

0

5/3

/201

0

9/3

/201

0

1/3

/201

1

5/3

/201

1

$ p

er

gallo

nEthanol Blending Advantage


Corn Grind for Ethanol

86

88

90

92

94

96

98

100

Sep-10

Oct-10

Nov-10

Dec-10

Jan-11

Feb-11

Mar-11

Apr-11

May-11

Jun-11

Jul-11

Aug-11

Mill

ion b

ush

els

Source: DOE, EIA


Ethanol Stocks

650

700

750

800

850

900

Sep-10

Oct-10

Nov-10

Dec-10

Jan-11

Feb-11

Mar-11

Apr-11

May-11

Jun-11

Jul-11

Aug-11

Mill

ion g

allo

ns

Source: DOE, EIA


Supply vs. Demand

0

2

4

6

8

10

12

14

Supply Demand

Bill

ion

bush

els

Production FeedEthanol ExportOther

0

0.5

1

1.5

2

2.5

3

3.5

Supply Demand

Production CrushExport Other

Corn Soy


Supply vs. DemandCorn Soy

12.8

12.9

13

13.1

13.2

Supply Demand

Bill

ion

bush

els

Production FeedEthanol ExportOther

3

3.05

3.1

3.15

3.2

Supply Demand

Production CrushExport Other


Projected 2011 Season-Average Corn Price

3.50

4.00

4.50

5.00

5.50

6.00

6.50

7.00

7.50

12/1

4/2

00

9

2/1

4/2

010

4/1

4/2

010

6/1

4/2

010

8/1

4/2

010

10/1

4/2

01

0

12/1

4/2

01

0

2/1

4/2

011

4/1

4/2

011

6/1

4/2

011

8/1

4/2

011

$ p

er

bush

el

Futures USDA


Projected 2011 Season-Average Soy Price

8.50

9.00

9.50

10.00

10.50

11.00

11.50

12.00

12.50

13.00

13.50

14.00

12/1

4/2

00

9

2/1

4/2

010

4/1

4/2

010

6/1

4/2

010

8/1

4/2

010

10/1

4/2

01

0

12/1

4/2

01

0

2/1

4/2

011

4/1

4/2

011

6/1

4/2

011

8/1

4/2

011

$ p

er

bush

el

Futures USDA


Corn Prices vs. Costs

1.00

1.50

2.00

2.50

3.00

3.50

4.00

4.50

5.00

5.50

6.00

6.50

7.00

7.50$ p

er

Bush

el

Season-average Price Cost per Bushel


Soybean Prices vs. Costs

2.00

3.00

4.00

5.00

6.00

7.00

8.00

9.00

10.00

11.00

12.00

13.00

14.00$ p

er

Bush

el

Season-average Price Cost per Bushel


Thoughts for 2011 and BeyondGeneral economic conditions

Continued worldwide economic recovery is a major key for crop pricesDebt limit, US credit ratingUS job recovery, European financial concerns, Chinese inflation

Supply/demand concernsPrevented planting, flooding, heat wave, nighttime temps?Biofuel growth and energy demandWill supply be able to keep pace with demand?

2010/11: USDA: Corn $5.25, Soy $11.35

2011/12: USDA: Corn $6.70, Soy $13.50 Futures (as of 8/25/2011): Corn $7.17, Soy $13.50


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/

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