201314 Crop Market Outlook Oct 13 2013 Chad

2013/14 Crop Market Outlook Oct. 13, 2013 Chad Hart Associate Professor/Crop Markets Specialist chart@iastate. edu 515 -294 -9911 Extension and Outreach/Department of Economics

U. S. Corn Supply and Use 2009 2010 2011 2012 2013 86. 4 88. 2 91. 9 97. 2 97. 4 Area Planted (mil. acres) Yield (bu. /acre) 164. 7 152. 8 147. 2 123. 4 155. 3 Production (mil. bu. ) 13, 092 12, 447 12, 360 10, 780 13, 843 Beg. Stocks (mil. bu. ) 1, 673 1, 708 1, 128 989 824 Imports (mil. bu. ) 8 28 29 162 25 Total Supply (mil. bu. ) 14, 774 14, 182 13, 517 11, 931 14, 593 Feed & Residual (mil. bu. ) 5, 125 4, 795 4, 546 4, 475 5, 100 Ethanol (mil. bu. ) 4, 591 5, 019 5, 011 4, 665 4, 900 Food, Seed, & Other (mil. bu. ) 1, 370 1, 407 1, 428 1, 395 1, 450 Exports (mil. bu. ) 1, 980 1, 834 1, 543 735 1, 225 Total Use (mil. bu. ) 13, 066 13, 055 12, 528 11, 270 12, 675 Ending Stocks (mil. bu. ) 1, 708 1, 128 989 824 2, 018 3. 55 5. 18 6. 22 6. 90 4. 80 Season-Average Price ($/bu. ) Source: USDA-WAOB Extension and Outreach/Department of Economics

Objective Yield Data Source: USDA-NASS Extension and Outreach/Department of Economics

Projected Corn Yields Top: 2013 Projected Yield Bottom: Change from last month Units: Bushels/acre Source: USDA-NASS Extension and Outreach/Department of Economics

Early Reports on Corn Yields Source: Ag. Web. com Extension and Outreach/Department of Economics

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

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

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

Corn Grind for Ethanol Extension and Outreach/Department of Economics

Source: DOE-EIA, Annual Energy Outlook Extension and Outreach/Department of Economics

Current Corn Futures 4. 54 4. 40 4. 04 Source: CME Group, 10/11/2013 Extension and Outreach/Department of Economics

New Crop Prices Extension and Outreach/Department of Economics

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

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

Thoughts for 2014 and Beyond ØSupply/demand concerns ØA lot of production uncertainty for harvest time ØCorn demand rebounding? ØAcreage allocation for 2014: Where do the extra corn acres go? ØMarkets favoring soybeans in the short term and corn longer term Corn Soybeans 2012/13 USDA 2013/14 USDA $6. 90 $14. 40 $4. 80 $12. 50 Extension and Outreach/Department of Economics 2013/14 Futures (10/11/13) $4. 04 $12. 01

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

2014 Corn Sweeteners Prepared by Stephen P. Nicholson, Economist International Food Products 17

Daily December Corn Futures ($/bu. ) 18

Weekly Corn Futures ($/bu. ) 19

Comparison July ‘ 13 Futures (ZCN 13) vs. July ‘ 14 Futures (ZCH 14) 20

Corn Sweetener Highlights • 2014 corn sweetener negotiations have not begun. • • Some early price discussions have been futile. Not expecting negotiations to begin until after Nov. USDA reports. • 2013 business has been soft. • Some major corn wet millers have seen substantial declines in volume • While sugar prices are off their lows, cheap sugar is going to keep pressure on corn sweetener prices. • Future in Mexico? • • Proposal to tax sugary beverages—aimed at soft drinks. Future of U. S. HFCS exports to Mexico? • Corn futures prices are down significantly from year ago levels--$2. 20$2. 50 per bu. • • In 2014 basis values will be down from 2013, but will be supported by strong demand—ethanol industry and exports. Net corns will also be down, as co-product prices are also declining. • Surprisingly, capacity utilization rates still remain historically high. 21

Projections for 2013 Corn Sweeteners Prices • There have been no “official” pricing announcements • Market talk is that there will be no price announcements until Nov. • Individual pricing will depend largely on where your price was in 2013. • 2014 Pricing Indications (over 2013 contract prices) • Liquid corn sweeteners: down $3. 00 -$6. 00 per CWT • Dextrose: down $3. 00 -$6. 00 per CWT • Corn Syrup Solids: down $2. 00 -$4. 00 per CWT • Maltodextrins: down $2. 00 -$4. 00 per CWT • Crystalline Fructose: $4. 00 -$6. 00 per CWT • PFP Corn Starch: $4. 00 -$6. 00 per CWT 22