2012 Crop Market Outlook ISU Extension Farm Management

2012 Crop Market Outlook ISU Extension Farm Management In-Service Ames, Iowa Oct. 3, 2012 Chad Hart Associate Professor/Grain Markets Specialist chart@iastate. edu 515 -294 -9911 Extension and Outreach/Department of Economics

U. S. Corn Supply and Use 2008 2009 2010 2011 2012 86. 0 86. 4 88. 2 91. 9 96. 4 Area Planted (mil. acres) Yield (bu. /acre) 153. 9 164. 7 152. 8 147. 2 122. 8 Production (mil. bu. ) 12, 092 13, 092 12, 447 12, 358 10, 727 Beg. Stocks (mil. bu. ) 1, 624 1, 673 1, 708 1, 128 988 Imports (mil. bu. ) 14 8 28 25 75 Total Supply (mil. bu. ) 13, 729 14, 774 14, 182 13, 511 11, 790 Feed & Residual (mil. bu. ) 5, 182 5, 125 4, 793 Ethanol (mil. bu. ) 3, 709 4, 591 5, 021 4, 400 ? 4, 150 5, 000 ? 4, 500 Food, Seed, & Other (mil. bu. ) 1, 316 1, 370 1, 407 1, 390 ? 1, 350 Exports (mil. bu. ) 1, 849 1, 980 1, 835 1, 540 ? 1, 250 Total Use (mil. bu. ) 12, 056 13, 066 13, 055 12, 330 11, 250 Ending Stocks (mil. bu. ) 1, 673 1, 708 1, 128 988 540 4. 06 3. 55 5. 18 6. 25 7. 90 Season-Average Price ($/bu. ) Source: USDA-WAOB Extension and Outreach/Department of Economics

U. S. Soybean Supply and Use 2008 2009 2010 2011 2012 Area Planted (mil. acres) 75. 7 77. 5 77. 4 75. 0 76. 1 Yield (bu. /acre) 39. 7 44. 0 43. 5 41. 9 35. 3 Production (mil. bu. ) 2, 967 3, 359 3, 329 3, 094 2, 634 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 2, 824 Crush (mil. bu. ) 1, 662 1, 752 1, 648 1, 705 1, 500 Seed & Residual (mil. bu. ) 106 110 130 90 114 Exports (mil. bu. ) 1, 279 1, 499 1, 501 1, 360 1, 055 Total Use (mil. bu. ) 3, 047 3, 361 3, 280 3, 156 2, 670 Ending Stocks (mil. bu. ) 138 151 215 169 154 9. 97 9. 59 11. 30 12. 45 16. 00 Season-Average Price ($/bu. ) Source: USDA-WAOB Extension and Outreach/Department of Economics

Corn Export Sales Source: USDA-FAS Extension and Outreach/Department of Economics

Soy Export Sales Source: USDA-FAS Extension and Outreach/Department of Economics

Corn Grind for Ethanol Extension and Outreach/Department of Economics

U. S. DDG Supply and Use 2008 2009 2010 2011 2012 Production (mil. metric tons) 28. 6 35. 4 38. 7 38. 6 34. 7 Imports (mil. metric tons) 0. 3 0. 4 0. 3 Total Supply (mil. metric tons) 28. 9 35. 8 39. 2 38. 9 35. 0 Domestic (mil. metric tons) 23. 9 27. 5 30. 9 31. 2 28. 1 Exports (mil. metric tons) 5. 0 8. 3 7. 7 6. 9 Total Use (mil. metric tons) 28. 9 35. 8 39. 1 38. 9 35. 0 Average Price ($/ton) 126 114 188 222 275 My estimates, so take with a grain (or pound) of salt Extension and Outreach/Department of Economics

U. S. DDG Trade Extension and Outreach/Department of Economics

U. S. Blended Gasoline Consumption 7. 6 bil. gal. 7. 4 bil. gal. Source: DOE-EIA, via USDA-ERS Extension and Outreach/Department of Economics

Current Corn Futures 7. 08 5. 96 5. 60 Source: CME Group, 10/3/2012 Extension and Outreach/Department of Economics

Current Soybean Futures 14. 48 12. 61 12. 17 Source: CME Group, 10/3/2012 Extension and Outreach/Department of Economics

Total Acreage Shift Source: USDA-NASS Extension and Outreach/Department of Economics

Acreage Shift by State Top: Planted in 2012 Bottom: Change from 2011 Units: 1, 000 acres Source: USDA-NASS Extension and Outreach/Department of Economics

Acreage Shift by Crop Acreage change from 2011 Units: 1, 000 acres Source: USDA-NASS Extension and Outreach/Department of Economics

Thoughts for 2013 and Beyond ØSupply/demand concerns ØSoil moisture ØSouth America gets 1 st chance to respond to drought pricing ØWill supply be able to keep pace with demand? Ø Drought pulled supply down, but some better yield reports are coming in Ø High prices are diminishing demand ØGeneral economic conditions ØContinued worldwide economic recovery is a key for crop prices ØUS job recovery, European financial concerns, China? Ø 2012/13: USDA: Futures (as of 10/3/12): Ø 2013/14: Futures Ø 2014/15: Futures Extension and Outreach/Department of Economics Corn $7. 90; Soy $16. 00 Corn $7. 08; Soy $14. 48 Corn $5. 96; Soy $12. 61 Corn $5. 60; Soy $12. 17

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/ Extension and Outreach/Department of Economics