2012 Crop Market Outlook Northeast Iowa Research Farm

2012 Crop Market Outlook Northeast Iowa Research Farm Field Day Nashua, Iowa June 28, 2012 Chad Hart Assistant 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 95. 9 Area Planted (mil. acres) Yield (bu. /acre) 153. 9 164. 7 152. 8 147. 2 166. 0 Production (mil. bu. ) 12, 092 13, 092 12, 447 12, 358 14, 790 Beg. Stocks (mil. bu. ) 1, 624 1, 673 1, 708 1, 128 851 Imports (mil. bu. ) 14 8 28 20 15 Total Supply (mil. bu. ) 13, 729 14, 774 14, 182 13, 506 15, 656 Feed & Residual (mil. bu. ) 5, 182 5, 125 4, 793 4, 550 5, 450 Ethanol (mil. bu. ) 3, 709 4, 591 5, 021 5, 050 5, 000 Food, Seed, & Other (mil. bu. ) 1, 316 1, 370 1, 407 1, 405 1, 425 Exports (mil. bu. ) 1, 849 1, 980 1, 835 1, 650 1, 900 Total Use (mil. bu. ) 12, 056 13, 066 13, 055 12, 655 13, 775 Ending Stocks (mil. bu. ) 1, 673 1, 708 1, 128 851 1, 881 4. 06 3. 55 5. 18 6. 10 4. 60 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 73. 9 Yield (bu. /acre) 39. 7 44. 0 43. 5 41. 5 43. 9 Production (mil. bu. ) 2, 967 3, 359 3, 329 3, 056 3, 205 Beg. Stocks (mil. bu. ) 205 138 151 215 175 Imports (mil. bu. ) 13 15 14 15 15 Total Supply (mil. bu. ) 3, 185 3, 512 3, 495 3, 286 3, 395 Crush (mil. bu. ) 1, 662 1, 752 1, 648 1, 660 1, 645 Seed & Residual (mil. bu. ) 106 110 130 116 125 Exports (mil. bu. ) 1, 279 1, 499 1, 501 1, 335 1, 485 Total Use (mil. bu. ) 3, 047 3, 361 3, 280 3, 111 3, 255 Ending Stocks (mil. bu. ) 138 151 215 175 140 9. 97 9. 59 11. 30 12. 30 13. 00 Season-Average Price ($/bu. ) Source: USDA-WAOB Extension and Outreach/Department of Economics

Crop Conditions Source: USDA-NASS Extension and Outreach/Department of Economics

Projection from Corn Conditions Extension and Outreach/Department of Economics

Projection from Soy Conditions Extension and Outreach/Department of Economics

Source: NOAA-CPC Extension and Outreach/Department of Economics

World Corn Production Source: USDA-WAOB Extension and Outreach/Department of Economics

World Soybean Production Source: USDA-WAOB Extension and Outreach/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 and Outreach/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 and Outreach/Department of Economics

Change of Export Pace Extension and Outreach/Department of Economics

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

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

Corn Grind for Ethanol Source: DOE-EIA Extension and Outreach/Department of Economics

Ethanol Stocks Source: DOE-EIA 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

Projected 2012 Season-Average Corn Price Cost Extension and Outreach/Department of Economics

Projected 2012 Season-Average Soy Price Cost Extension and Outreach/Department of Economics

Iowa Crop Margins Extension and Outreach/Department of Economics

2012 Crop Prices Extension and Outreach/Department of Economics

Current Corn Futures 6. 06 5. 92 5. 38 5. 03 Source: CME Group, 6/27/2012 Extension and Outreach/Department of Economics

Current Soybean Futures 13. 13 12. 34 11. 79 11. 63 Source: CME Group, 6/27/2012 Extension and Outreach/Department of Economics

Thoughts for 2012 and Beyond ØGeneral economic conditions ØContinued worldwide economic recovery is a major key for crop prices ØUS job recovery, European financial concerns, China? ØSupply/demand concerns ØHow about some rain? ØBiofuel growth and energy demand ØWill supply be able to keep pace with demand? Ø Nearly 96 million acres of corn might do the trick Ø Roughly 74 million acres of soybeans might not Ø 2011/12: USDA: Corn $6. 10; Soy $12. 30 Futures (as of 6/27/12): Corn $6. 06; Soy $12. 34 Ø 2012/13: USDA: Corn $4. 60; Soy $13. 00 Futures (as of 6/27/12): Corn $5. 92; Soy $13. 13 Extension and Outreach/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/ Extension and Outreach/Department of Economics