Ag Market Outlook Dec 19 2018 Chad Hart

Ag Market Outlook Dec. 19, 2018 Chad Hart Associate Professor/Crop Marketing Specialist chart@iastate. edu 515 -294 -9911 Extension and Outreach/Department of Economics

U. S. Corn Supply and Use 2015 2016 2017 2018 2019 88. 0 94. 0 90. 2 89. 1 92. 0 Area Planted (mil. acres) Yield (bu. /acre) 168. 4 174. 6 176. 6 178. 9 176. 5 Production (mil. bu. ) 13, 602 15, 148 14, 604 14, 626 14, 930 Beg. Stocks (mil. bu. ) 1, 731 1, 737 2, 293 2, 140 1, 781 Imports (mil. bu. ) 67 57 36 45 50 Total Supply (mil. bu. ) 15, 401 16, 942 16, 934 16, 811 16, 751 Feed & Residual (mil. bu. ) 5, 120 5, 470 5, 298 5, 500 5, 575 Ethanol (mil. bu. ) 5, 224 5, 432 5, 605 5, 600 5, 700 Food, Seed, & Other (mil. bu. ) 1, 422 1, 453 1, 480 1, 490 Exports (mil. bu. ) 1, 898 2, 294 2, 438 2, 450 2, 425 Total Use (mil. bu. ) 13, 664 14, 649 14, 793 15, 030 15, 190 Ending Stocks (mil. bu. ) 1, 737 2, 293 2, 140 1, 781 1, 571 3. 61 3. 36 3. 60 3. 90 Season-Average Price ($/bu. ) Source: USDA-WAOB, w/ adjustment for Dec. reports Extension and Outreach/Department of Economics

U. S. Soybean Supply and Use 2015 2016 2017 2018 2019 Area Planted (mil. acres) 82. 7 83. 4 90. 1 89. 1 82. 5 Yield (bu. /acre) 48. 0 52. 0 49. 3 52. 1 50. 0 Production (mil. bu. ) 3, 926 4, 296 4, 411 4, 600 4, 090 Beg. Stocks (mil. bu. ) 191 197 302 438 955 Imports (mil. bu. ) 24 22 22 25 25 Total Supply (mil. bu. ) 4, 140 4, 515 4, 734 5, 063 5, 070 Crush (mil. bu. ) 1, 886 1, 901 2, 055 2, 080 2, 075 Seed & Residual (mil. bu. ) 122 146 112 128 127 Exports (mil. bu. ) 1, 936 2, 166 2, 129 1, 900 2, 075 Total Use (mil. bu. ) 3, 944 4, 214 4, 296 4, 107 4, 277 Ending Stocks (mil. bu. ) 197 302 438 955 793 Season-Average Price ($/bu. ) 8. 95 9. 47 9. 33 8. 60 8. 75 Source: USDA-WAOB, w/ adjustment for Dec. reports Extension and Outreach/Department of Economics

Projected Corn Yields Top: 2018 Yield Estimate Bottom: Change from last month Units: Bushels per acre Source: USDA-NASS Extension and Outreach/Department of Economics

Projected Soybean Yields Top: 2018 Yield Estimate Bottom: Change from last month Units: Bushels per acre Source: USDA-NASS 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

Extension and Outreach/Department of Economics

Arable land Extension and Outreach/Department of Economics

Extension and Outreach/Department of Economics

U. S. Meat Production & Prices Source: USDA-WAOB Extension and Outreach/Department of Economics

+12% +4% +10% +16% +12% Data Source: USDA-NASS, Compiled & Forecasts by LMIC Livestock Marketing Information Center Extension and Outreach/Department of Economics

+12% +4% +10% +16% +12% Data Source: USDA-NASS, Compiled & Forecasts by LMIC Livestock Marketing Information Center Extension and Outreach/Department of Economics

+9% +4% +11% +6% Data Source: USDA-NASS and USDA-ERS, Compiled & Analysis by LMIC Livestock Marketing Information Center Extension and Outreach/Department of Economics

+9% +4% +11% +6% Data Source: USDA-NASS and USDA-ERS, Compiled & Analysis by LMIC Livestock Marketing Information Center Extension and Outreach/Department of Economics

U. S. Meat Trade Source: USDA-WAOB Extension and Outreach/Department of Economics

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

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

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

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

Soybean Market Shares Sales for 2018 2017 crop Sales for 2016 crop Source: USDA-FAS Extension and Outreach/Department of Economics

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

Ethanol Production Source: EIA Extension and Outreach/Department of Economics

Ethanol Exports Source: EIA Extension and Outreach/Department of Economics

Current Corn Futures 4. 01 3. 70 Source: CME Group, 12/18/2018 Extension and Outreach/Department of Economics

Current Soybean Futures 9. 45 8. 83 Source: CME Group, 12/18/2018 Extension and Outreach/Department of Economics

2018/19 Crop Margins Based on futures prices Extension and Outreach/Department of Economics

2019/20 Crop Margins Based on futures prices Extension and Outreach/Department of Economics

Iowa Corn Prices vs. Costs Based on USDA prices and ISU costs Extension and Outreach/Department of Economics

Iowa Soybean Prices vs. Costs Based on USDA prices and ISU costs Extension and Outreach/Department of Economics

Want to provide feedback on my presentation? https: //www. surveymonkey. com/r/Chad. Hart Extension and Outreach/Department of Economics

Thank you for your time! Any questions? My web site: http: //www 2. econ. iastate. edu/faculty/hart/ Iowa Farm Outlook: http: //www 2. econ. iastate. edu/ifo/ Ag Decision Maker: http: //www. extension. iastate. edu/agdm/ Extension and Outreach/Department of Economics

Data Source: USDA-NASS Livestock Marketing Information Center Extension and Outreach/Department of Economics

Data Source: USDA-NASS Livestock Marketing Information Center Extension and Outreach/Department of Economics

Pressure on Dairy Moving Forward • Exports are Good, but… • Shipping at lower prices • Tariffs • Larger Dairies Still Above COP, but… • Regional Differences Exist • Prices expected to be systemically lower for the next 2 -3 years Extension and Outreach/Department of Economics

LMIC Dairy Production and Price Quarterly Forecasts Sources: USDA/NASS; USDA/AMS Livestock Market News; Projections and Forecasts by LMIC Extension and Outreach/Department of Economics (10/25/18)