Crop Outlook Pro Ag Fall 2011 Outlook Seminar

Crop Outlook Pro Ag Fall 2011 Outlook Seminar Fort Dodge, Iowa Nov. 9, 2011 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 86. 0 86. 4 88. 2 91. 9 Area Planted (mil. acres) Yield (bu. /acre) 153. 9 164. 7 152. 8 146. 7 Production (mil. bu. ) 12, 092 13, 092 12, 447 12, 310 Beg. Stocks (mil. bu. ) 1, 624 1, 673 1, 708 1, 128 Imports (mil. bu. ) 14 8 28 15 Total Supply (mil. bu. ) 13, 729 14, 774 14, 182 13, 453 Feed & Residual (mil. bu. ) 5, 182 5, 125 4, 792 4, 600 Ethanol (mil. bu. ) 3, 709 4, 591 5, 021 5, 000 Food, Seed, & Other (mil. bu. ) 1, 316 1, 370 1, 407 1, 410 Exports (mil. bu. ) 1, 849 1, 980 1, 835 1, 600 Total Use (mil. bu. ) 12, 056 13, 066 13, 054 12, 610 Ending Stocks (mil. bu. ) 1, 673 1, 708 1, 128 843 4. 06 3. 55 5. 18 6. 70 Season-Average Price ($/bu. ) Source: USDA-WAOB Extension and Outreach/Department of Economics

U. S. Soybean Supply and Use 2008 2009 2010 2011 Area Planted (mil. acres) 75. 7 77. 5 77. 4 75. 0 Yield (bu. /acre) 39. 7 44. 0 43. 5 41. 3 Production (mil. bu. ) 2, 967 3, 359 3, 329 3, 046 Beg. Stocks (mil. bu. ) 205 138 151 215 Imports (mil. bu. ) 13 15 14 15 Total Supply (mil. bu. ) 3, 185 3, 512 3, 495 3, 275 Crush (mil. bu. ) 1, 662 1, 752 1, 648 1, 635 Seed & Residual (mil. bu. ) 106 110 130 120 Exports (mil. bu. ) 1, 279 1, 499 1, 501 1, 325 Total Use (mil. bu. ) 3, 047 3, 361 3, 280 3, 080 Ending Stocks (mil. bu. ) 138 151 215 195 9. 97 9. 59 11. 30 12. 60 Season-Average Price ($/bu. ) Source: USDA-WAOB Extension and Outreach/Department of Economics

Projected Corn Yields Source: USDA-NASS Extension and Outreach/Department of Economics

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

Projected Soybean Yields Source: USDA-NASS Extension and Outreach/Department of Economics

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

Corn vs. Wheat Source: CME Group, 11/8/2011 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

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

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

Renewable Fuels Standard (RFS) Crop Year Billion Bushels 2011 4. 64 2012 4. 86 2013 5. 07 2014 5. 29 Extension and Outreach/Department of Economics

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

Ethanol Margins Source: CARD Extension and Outreach/Department of Economics

Ethanol Blending Advantage Extension and Outreach/Department of Economics

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

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

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

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

Iowa Corn Prices vs. Costs Extension and Outreach/Department of Economics

Iowa Soybean Prices vs. Costs Extension and Outreach/Department of Economics

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

States with Room to Grow Number is the difference in planted acres between 2008 and 2011 Extension and Outreach/Department of Economics

Iowa Crop Margins Extension and Outreach/Department of Economics

Extension and Outreach/Department of Economics

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, Chinese inflation ØSupply/demand concerns ØSmaller than anticipated U. S. crops ØBiofuel growth and energy demand ØCorn still has the upper hand in the acreage competition ØWill supply be able to keep pace with demand? Ø 2011/12: USDA: Corn $6. 70; Soy $12. 60 Futures (as of 11/8/11): Corn $6. 32; Soy $11. 71 Ø 2012/13: Futures (as of 11/8/11): Corn $5. 95; Soy $11. 85 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