The Outlook for 2010 Big Crops Big Demands
The Outlook for 2010: Big Crops, Big Demands CFNB Crop Insurance Meeting Storm Lake, Iowa Feb. 25, 2010 Chad Hart Assistant Professor/Grain Markets Specialist chart@iastate. edu 515 -294 -9911 Department of Economics
U. S. Corn Supply and Use 2007 2008 2009 2010 93. 5 86. 0 86. 5 89. 0 Area Planted (mil. acres) Yield (bu. /acre) 150. 7 153. 9 165. 2 160. 9 Production (mil. bu. ) 13, 038 12, 092 13, 151 13, 160 Beg. Stocks (mil. bu. ) 1, 304 1, 624 1, 673 1, 719 Imports (mil. bu. ) 20 14 10 15 Total Supply (mil. bu. ) 14, 362 13, 729 14, 834 14, 894 Feed & Residual (mil. bu. ) 5, 913 5, 246 5, 550 5, 350 Ethanol (mil. bu. ) 3, 049 3, 677 4, 300 4, 500 Food, Seed, & Other (mil. bu. ) 1, 338 1, 276 1, 265 1, 290 Exports (mil. bu. ) 2, 437 1, 858 2, 000 2, 100 Total Use (mil. bu. ) 12, 737 12, 056 13, 115 13, 240 Ending Stocks (mil. bu. ) 1, 624 1, 673 1, 719 1, 654 4. 20 4. 06 3. 70 3. 60 Season-Average Price ($/bu. ) Department of Economics Source: USDA
Department of Economics Source: USDA
U. S. Corn Harvest Progress Department of Economics Source: USDA
U. S. Soybean Supply and Use 2007 2008 2009 2010 Area Planted (mil. acres) 64. 7 75. 7 77. 5 77. 0 Yield (bu. /acre) 41. 7 39. 7 44. 0 42. 9 Production (mil. bu. ) 2, 677 2, 967 3, 361 3, 260 Beg. Stocks (mil. bu. ) 574 205 138 210 Imports (mil. bu. ) 10 13 8 8 Total Supply (mil. bu. ) 3, 261 3, 185 3, 507 3, 478 Crush (mil. bu. ) 1, 803 1, 662 1, 720 1, 655 Seed & Residual (mil. bu. ) 93 101 177 168 Exports (mil. bu. ) 1, 159 1, 283 1, 400 1, 325 Total Use (mil. bu. ) 3, 056 3, 047 3, 297 3, 147 Ending Stocks (mil. bu. ) 205 138 210 330 10. 10 9. 97 9. 45 8. 80 Season-Average Price ($/bu. ) Department of Economics Source: USDA
Department of Economics Source: USDA
U. S. Soybean Harvest Progress Department of Economics Source: USDA
Storage Issues Department of Economics Source: Hurburgh and Elmore, ICM News, 10/15/09
World Corn Production Department of Economics Source: USDA
Corn – Argentina & Brazil Department of Economics Source: USDA
World Soybean Production Department of Economics Source: USDA
Soybeans – Argentina & Brazil Department of Economics Source: USDA
Hog Returns vs. Corn Prices Department of Economics Sources: ISU Extension, Farrow-to-Finish; USDA-NASS
Cattle Returns vs. Corn Prices Department of Economics Sources: ISU Extension, Yearling Steers; USDA-NASS
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 Department of Economics Source: Dr. John Lawrence, ISU Extension
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 Department of Economics Source: Dr. John Lawrence, ISU Extension
Exchange Rates (Jan. 2003 = 1) Department of Economics Source: USDA, ERS
Corn Export Sales Department of Economics Source: USDA, FAS
2009 U. S. Corn Exports Department of Economics Source: USDA, FAS
Soybean Export Sales Department of Economics Source: USDA, FAS
2009 U. S. Soybean Exports Department of Economics Source: USDA, FAS
Renewable Fuels Standard (RFS) Department of Economics Crop Year Billion Bushels 2008 3. 57 2009 4. 11 2010 4. 43 2011 4. 64
Ethanol Margins Source: ISU, CARD Department of Economics
Ethanol Blending Advantage Department of Economics
Crude Oil Prices Sources: EIA, NYMEX Department of Economics
Outside Influences (Jan. 2007 = 1) Department of Economics
Corn 1990 - 2006 Department of Economics
Corn Department of Economics
Soybeans Department of Economics
Corn Futures Trade Department of Economics Source: CFTC
Soybean Futures Trade Department of Economics Source: CFTC
Iowa Crop Basis Department of Economics
Projected 2009 Season-Average Corn Price Department of Economics
Projected 2009 Season-Average Soy Price Department of Economics
Corn Futures Department of Economics Source: CBOT, 2/23/10
Soybean Futures Department of Economics Source: CBOT, 2/23/10
Feb. Prices on Dec. Corn ’ 09 Ave. $4. 04 ’ 10 Ave. $3. 96, so far Department of Economics
Feb. Prices on Nov. Corn ’ 10 Ave. $9. 21, so far ’ 09 Ave. $8. 80 Department of Economics
Ratio: Nov. 2010 Soy/Dec. 2010 Corn Department of Economics Source: CBOT
Input Costs Department of Economics Source: USDA, Agricultural Prices, Jan. 29, 2010
Iowa Corn Prices vs. Costs Department of Economics
Iowa Soybean Prices vs. Costs Department of Economics
Thoughts for 2009/10 and Beyond ØGeneral economic conditions ØProjected economic recovery is a major key for crop prices ØWeakness in the dollar helps exports, but dollar may fight back ØNearby crude oil prices floating in mid to upper $70’s ØSupply/demand concerns ØLivestock numbers continue to decline ØSouth America: Record soybean crop and large corn crop Ø 2009/10: USDA: Corn $3. 70, Soy $9. 45 Futures: Corn $3. 52, Soy $9. 32 Ø 2010/11: USDA: Corn $3. 60, Soy $8. 80 Futures: Corn $3. 87, Soy $8. 94 Department of Economics
Thank you for your time! Any questions? My web site: http: //www. econ. iastate. edu/faculty/hart/ Iowa Farm Outlook: http: //www. econ. iastate. edu/outreach/agriculture/periodicals/ifo/ Ag Decision Maker: http: //www. extension. iastate. edu/agdm/ Department of Economics
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