2011 Grain Market Outlook Soil Management Land Valuation

2011 Grain Market Outlook Soil Management & Land Valuation Conference 2011 Ames, Iowa May 11, 2011 Chad Hart Assistant Professor/Grain Markets Specialist chart@iastate. edu 515 -294 -9911 University Extension/Department of Economics

U. S. Corn Supply and Use 2008 2009 2010 2011 86. 0 86. 4 88. 2 92. 2 Area Planted (mil. acres) Yield (bu. /acre) 153. 9 164. 7 152. 8 158. 7 Production (mil. bu. ) 12, 092 13, 092 12, 447 13, 505 Beg. Stocks (mil. bu. ) 1, 624 1, 673 1, 708 730 Imports (mil. bu. ) 14 8 25 20 Total Supply (mil. bu. ) 13, 729 14, 774 14, 180 14, 255 Feed & Residual (mil. bu. ) 5, 182 5, 140 5, 150 5, 100 Ethanol (mil. bu. ) 3, 709 4, 568 5, 000 5, 050 Food, Seed, & Other (mil. bu. ) 1, 316 1, 371 1, 400 1, 405 Exports (mil. bu. ) 1, 849 1, 987 1, 900 1, 800 Total Use (mil. bu. ) 12, 056 13, 066 13, 450 13, 355 Ending Stocks (mil. bu. ) 1, 673 1, 708 730 900 4. 06 3. 55 5. 25 6. 00 Season-Average Price ($/bu. ) University Extension/Department of Economics

U. S. Soybean Supply and Use 2008 2009 2010 2011 Area Planted (mil. acres) 75. 7 77. 5 77. 4 76. 6 Yield (bu. /acre) 39. 7 44. 0 43. 5 43. 4 Production (mil. bu. ) 2, 967 3, 359 3, 329 3, 285 Beg. Stocks (mil. bu. ) 205 138 151 170 Imports (mil. bu. ) 13 15 15 15 Total Supply (mil. bu. ) 3, 185 3, 512 3, 495 3, 470 Crush (mil. bu. ) 1, 662 1, 752 1, 650 1, 655 Seed & Residual (mil. bu. ) 106 108 125 115 Exports (mil. bu. ) 1, 279 1, 501 1, 550 1, 540 Total Use (mil. bu. ) 3, 047 3, 361 3, 325 3, 310 Ending Stocks (mil. bu. ) 138 151 170 160 9. 97 9. 59 11. 40 13. 00 Season-Average Price ($/bu. ) University Extension/Department of Economics

Corn Area Source: USDA-NASS University Extension/Department of Economics

Corn Planting Progress Source: USDA-NASS University Extension/Department of Economics

Soybean Area Source: USDA-NASS University Extension/Department of Economics

Soybean Planting Progress Source: USDA-NASS University Extension/Department of Economics

World Corn Production Source: USDA University Extension/Department of Economics

World Soybean Production Source: USDA University Extension/Department of Economics

Hog Crush Margin 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 futures Corn: 10 bushels per pig Soybean meal: 150 pounds per pig Source: Shane Ellis, ISU Extension University Extension/Department of Economics

Cattle Crush Margin 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 Source: Shane Ellis, ISU Extension University Extension/Department of Economics

Wheat Crop Condition Source: USDA-NASS University Extension/Department of Economics

Corn vs. Wheat (CME July 2011 futures) University Extension/Department of Economics

Export Pace vs. Last Year Source: USDA, FAS University Extension/Department of Economics

Corn Export Shifts Source: USDA, FAS University Extension/Department of Economics

Corn Advance Export Sales Source: USDA, FAS University Extension/Department of Economics

Soybean Export Shifts Source: USDA, FAS University Extension/Department of Economics

Soy Advance Export Sales Source: USDA, FAS University Extension/Department of Economics

Nearby Futures (Jan. 3, 2011 = 1) University Extension/Department of Economics

Ethanol Margin Source: CARD University Extension/Department of Economics

Ethanol Blending Advantage University Extension/Department of Economics

Corn Grind for Ethanol University Extension/Department of Economics

Ethanol Stocks University Extension/Department of Economics

Projected Ethanol Margin Source: CARD University Extension/Department of Economics

Proj. Ethanol Blending Advantage University Extension/Department of Economics

Projected 2011 Season-Average Corn Price University Extension/Department of Economics

Projected 2011 Season-Average Soy Price University Extension/Department of Economics

Projected Harvest Time Crop Margins University Extension/Department of Economics

Corn Prices vs. Costs University Extension/Department of Economics

Soybean Prices vs. Costs University Extension/Department of Economics

Thoughts for 2011 and Beyond ØGeneral economic conditions ØContinued worldwide economic recovery is a major key for crop prices ØEnergy prices limiting recovery ØJapanese recovery, European financial concerns, Chinese inflation ØSupply/demand concerns ØPlanting intentions vs. realizations (A good week puts in 30% of crop) ØBiofuel growth and energy demand ØWill supply be able to keep pace with demand? Ø 2010/11: USDA: Corn $5. 25, Soy $11. 40 Ø 2011/12: USDA: Corn $6. 00, Soy $13. 00 Futures (as of 5/10/2011): Corn $6. 34, Soy $12. 79 University Extension/Department of Economics

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/ University Extension/Department of Economics