Search
Displaying 61 - 70 of 98
March 17, 2015
Grain Market Outlook
14.897 bb, total use of 13.510 bb, ending stocks of 1.387 bb, 10.27% S/U, & $4.25 /bu U.S.
corn MYA prices.
World Corn Supply‐Demand: World total supplies of 1,162 mmt are projected for “current crop” MY 2014/15,
up from 1,125 mmt in MY 2013/14, and 1,000 mmt in MY 2012/13. Projected World corn ending stocks of
185.3 mmt (19.0% S/U) in “current crop” MY 2014/15 are up from 172.1 mmt (18.1% S/U) in MY 2013/14, and
from 138 mmt (15.7% S/U) in MY 2012/13. With closing CME NOV‐2015 soybean futures of $9.51 ¼ and CME
DEC‐2015 corn futures of $4.04 ¼ on 3/17/2015, the soybean/corn price ratio of 2.35 continues to be neutral
for the two crops in the United States. That said, a lack of profitability for U.S. corn at expected 2015 harvest
prices is likely to limit 2015 U.S. corn planted acres and 2015 corn production potential, and to provide at least
a moderate amount of support for U.S. corn prices in “next crop” MY 2015/16 in the spring and early summer.
Page | 2
I. U.S. Corn Market Situation and Outlook
I‐A. March USDA Reports & “Current Crop” MY 2014/15 Projections
On March 10th the USDA World Agricultural Outlook Board (WAOB) released its March 2015 World
Agricultural Supply and Demand Estimates (WASDE) report – containing U.S. and World corn supply‐demand
and price projections for both the 2013/14 as well as for “current crop” 2014/15 marketing years. The 2013/14
marketing year ended on August 31, 2014, while the “current crop” 2014/15 U.S. corn marketing year began
on September 1, 2014 and will last through August 31, 2015.
I‐B. Corn Futures Trends for Spring 2014‐March 2015 Period
A time of seasonal market weakness for feed grains typically has occurred during the months of January‐
February in large crop – low price years. And that was largely the case in January‐February 2015. After a low
on December 3rd of $3.77 ¼, the CME MARCH 2015 corn contract climbed to a high of $4.12 ¾ on December
29th (corresponding to a high of $4.25 ¼ for the CME MAY 2015 corn contract that same day) before declining
to a low of $3.65 ¾ by January 30th. Then after trading higher to $3.91 ¾ on February 9th, the CME MARCH
2015 corn contract closed on February 27th at $3.84 ½. During this same period of time the CME MAY corn
futures contract traded as high as to $4.00 on February 9th before closing at $3.93 ¼ on February 27th. After
the December 9th highs, neither the MARCH 2015 nor the MAY 2015 corn futures contracts have traded above
$4.00 per bushel – at least through Friday, March 13th.
The CME MAY 2015 corn contract is now the “lead” corn futures contract, representing current grain
market price prospects through late April 2015. Local basis adjustments are currently being made off MAY
2015 corn futures for spot cash corn and grain sorghum price bids in North America as well as other World
grain markets. The “current crop” MAY 2015 corn futures market contract initially responded in a neutral‐to‐
negative manner to the information in the March 10th USDA reports, but since then has trended “sideways‐to‐
lower”. On the day of the report – Tuesday, March 10th – Chicago Mercantile Exchange (CME) MARCH 2015
corn futures prices opened at $3.88 per bushel, and traded in a range of $3.83 ¼ ‐ $3.91 ¼ during the session,
before settling at $3.88 – down $0.00 ¾ for the day (Figure 1). The USDA report findings were publicly
released at approximately mid‐session, i.e., 12:00 noon eastern time (11:00 a.m. central) that day. Since then,
MAY 2015 has traded from a high of $3.93 ¾ on Wednesday, March 11th to a low of $3.80 ¼ on Friday, March
13th before closing at $3.80 ½ that same day.
The CME DECEMBER 2015 corn contract is now the “next crop” corn futures contract, representing grain
market price prospects for the mid‐October through late‐November 2015 time period. DEC 2015 is the futures
contract which local basis adjustments are made off of for “fall harvest 2015” corn and grain sorghum forward
contract price bids or hedges in North American and other World grain markets. The “next crop” DECEMBER
2015 corn futures market contract also initially responded in a “neutral‐to‐negative” manner to the
information in the March 10th USDA reports, but since then has trended “sideways‐to‐lower”. On the day of
the report CME DECEMBER 2015 corn futures prices opened at $4.12 per bushel, trading within the range of
$4.07 ¾ ‐ $4.14 ¾ during the session, before settling at $4.12 ½ – down $0.00 ½ per bushel for the day (Figure
1). Since then, DECEMBER 2015 corn futures prices has traded from a high of $4.17 ½ on Wednesday, March
11th to a low of $4.04 ½ on Friday, March 13th before closing at $4.04 ¾ that same day.
Page | 3
Figure 1. MAY 2015 and DECEMBER 2015 CME Corn Futures Price Charts (electronic trade) …
September 1, 2015
Grain Market Outlook
…
Also, IF major geopolitical conflicts in key World ag production and usage area … in lower input costs for U.S. and Foreign livestock feeding and
bioenergy users ‐ have helped to increase profitability for corn‐using industries, and led to increased feedgrain
usage. A combination of these production and demand impacts over time are likely to eventually cause a
change in the prevailing “large crop – low price” market scenario in U.S. and World coarse grain markets.
USDA U.S. Corn Market Forecast: The USDA projected lower U.S. corn production, higher usage, moderately
tighter ending stocks and stocks‐to‐use, and marginally lower U.S. corn prices for “new crop” MY 2015/16 than
for “old crop” MY 2014/15. Projected 2015 U.S. corn production of 13.686 billion bushels (bb) is up 156 million
bushels (mb) from July, but still down from 14.216 bb in 2014, with total supplies of 15.488 bb in “new crop”
MY 2015/16 being up from 15.477 bb in “old crop” MY 2014/15. Record forecast MY 2015/16 total corn usage
of 13.775 bb (up from 13.705 bb in MY 2014/15), includes ethanol use of 5.250 bb (up 50 mb vs MY 2014/15),
non‐ethanol FSI use of 1.375 bb (up 20 mb vs last year), exports of 1.850 bb, and feed and residual use of 5.300
bb. Ending stocks are forecast at 1.713 bb (12.4% S/U) in “new crop” MY 2015/16 – down from 1.772 bb
(12.9% S/U) in “old crop” MY 2014/15, but still up from 1.232 bb (9.2% S/U) in MY 2013/14, and 821 mb (7.4%
S/U) in MY 2012/13. “New crop” MY 2015/16 U.S. avg. cash prices are forecast in the range of $3.35‐$3.95
/bu. (midpoint of $3.65) versus to $3.65‐$3.75 /bu ($3.70 midpoint) in MY 2014/15, and $4.46 in MY 2013/14.
KSU U.S. Corn Market Forecasts: Projected supply‐demand and price scenarios by KSU for “new crop” MY
2015/16 are as follows: a) “2015 Normal Crop 13.568 bb Production” Scenario (40% prob.): 88.897 ma
planted, 81.000 ma harvested, yield of 167.5 bu/ac, 2015 U.S. corn production of 13.568 bb, total supplies of
15.370 bb, total use of 13.775 bb, ending stocks of 1.595 bb, 11.6% S/U, & $4.25 /bu U.S. corn MYA prices; b)
“2015 Smaller Normal Crop 13.365 bb Production” Scenario (50% prob.): 88.897 ma planted, 81.000 ma
harvested, yield of 165.0 bu/ac, 2015 U.S. corn production of 13.365 bb, total supplies of 15.167 bb, total use
of 13.700 bb, ending stocks of 1.467 bb, 10.7% S/U, & $4.35 /bu U.S. corn MYA prices; and c) “2015 Short Crop
12.555 bb Production” Scenario (10% prob.): Planted / harvested acres same as scenarios (a) & (b), but with a
KSU low yield of 155.0 bu/ac, U.S. corn production of 12.555 bb, total supplies of 14.317 bb, total use of
13.415 bb, ending stocks of 902 mb, 6.72% S/U, & $6.90 /bu U.S. corn MYA prices.
World Corn Supply‐Demand: World total supplies of 1,183 million metric tons (mmt) are projected for “new
crop” MY 2015/16, up from 1,181 mmt in “old crop” MY 2014/15, and 1,128 mmt in MY 2013/14. Projected
World corn ending stocks of 195.1 mmt (19.8% S/U) in “new crop” MY 2015/16 are down marginally from
197.4 mmt (20.1% S/U) in “old crop” MY 2014/15, but up from 175.0 mmt (18.4% S/U) in MY 2013/14.
Page | 2
I. U.S. Corn Market Situation and Outlook
I‐A. August USDA Reports & “New Crop” MY 2015/16 Projections
On August 12th the USDA National Agricultural Statistics Service (NASS) in its Crop Production report
made its’ first projection of 2015 U.S. corn production as of August 1, 2015 that was based on actual farmer
surveys and field trials. On the same day the USDA World Agricultural Outlook Board (WAOB) released its
August 2015 World Agricultural Supply and Demand Estimates (WASDE) report – containing U.S. and World
corn supply‐demand and price projections for the 2013/14, “old crop” 2014/15, as well as the “new crop”
2015/16 marketing years. The “new crop” 2015/16 marketing year for U.S. corn began on September 1, 2015
and will last through August 31, 2016.
I‐B. CME DEC 2015 & MAY 2016 Corn Futures Trends
The CME DECEMBER 2015 corn contract is now the “lead” corn futures contract – representing “new crop”
2015 corn market price prospects. Local basis adjustments are now being made off DEC 2015 corn futures for
spot cash corn and grain sorghum price bids in North America as well as other World grain markets. The “new
crop” DECEMBER 2015 corn futures market contract initially responded in a “very negative” manner to the
information in the August 12th USDA reports, but in the days afterward have trended “first higher then
sideways”. The USDA report findings were publicly released at approximately mid‐session, i.e., 12:00 noon
eastern time (11:00 a.m. central) that day.
On the day of the report – Wednesday, August 12th – Chicago Mercantile Exchange (CME) DECEMBER 2015
corn futures prices opened at $3.87 ¾ per bushel, and traded in a range of $3.57 ½ ‐ $3.93 ½ during the
session, before settling at $3.68 – down $0.19 ½ for the day (Figure 1). Since then, DECEMBER 2015 Corn has
traded from a low of $3.65 ½ on Monday, August 24th to a high of $3.86 ¾ on Tuesday, August 25th to before
closing at $3.75 ¼ on Monday, August 31st.
Figure 1. DECEMBER 2015 & MAY 2016 CME Corn Futures Price Charts …
April 30, 2015
Grain Market Outlook
al use of 13.550 bb, ending stocks of 966 mb, 7.13% S/U, & $6.75 /bu U.S. corn MYA prices.
World Corn Supply‐Demand: World total supplies of 1,163 mmt are projected for “current crop” MY 2014/15,
up from 1,124 mmt in MY 2013/14, and 1,000 mmt in MY 2012/13. Projected World corn ending stocks of
188.5 mmt (19.3% S/U) in “current crop” MY 2014/15 are up from 170.8 mmt (17.9% S/U) in MY 2013/14, and
from 135.4 mmt (15.7% S/U) in MY 2012/13. With closing CME NOV‐2015 soybean futures of $9.53 and CME
DEC‐2015 corn futures of $3.83 ¼ on 4/30/2015, the soybean/corn price ratio of 2.48 favors the planting of
soybeans in the United States in 2015. A lack of profitability for U.S. corn at expected 2015 harvest prices is
likely to limit 2015 U.S. corn planted acres and 2015 corn production potential, and to provide at least a
moderate amount of support for U.S. corn prices in “new crop” MY 2015/16 in the spring and early summer.
Page | 2
I. U.S. Corn Market Situation and Outlook
I‐A. March USDA Reports & “Current Crop” MY 2014/15 Projections
On April 9th the USDA World Agricultural Outlook Board (WAOB) released its April 2015 World
Agricultural Supply and Demand Estimates (WASDE) report – containing U.S. and World corn supply‐demand
and price projections for the 2012/13, 2013/14, as well as for “current crop” 2014/15 marketing years. The
2013/14 marketing year ended on August 31, 2014, while the “current crop” 2014/15 U.S. corn marketing year
began on September 1, 2014 and will last through August 31, 2015. In its upcoming 12th WASDE report the
USDA will release projections for the “new crop” 2015/16 marketing year for corn, grain sorghum, wheat,
soybeans and other major crops.
I‐B. Corn Futures Trends for Spring 2014‐March 2015 Period
During January‐April 2015 U.S. corn futures prices have generally declined, with the lowest prices coming
in late April. The market’s response since the April 9th USDA WASDE report has mirror and exacerbated this
trend. After a low on December 3rd of $3.77 ¼, the CME MARCH 2015 corn contract climbed to a high of
$4.12 ¾ on December 29th (corresponding to a high of $4.25 ¼ for the CME MAY 2015 corn contract that same
day) before declining to a low of $3.65 ¾ by January 30th. Then after trading higher to $3.91 ¾ on February 9th,
the CME MARCH 2015 corn contract closed on February 27th at $3.84 ½, and eventually closed out at $3.74 on
March 13th. During this same period of time the CME MAY 2015 corn futures contract traded as high as to
$4.00 on February 9th before closing at $3.93 ¼ on February 27th, and $3.80 ½ on March 13th. After the
December 9th highs, neither the MARCH 2015 nor the MAY 2015 corn futures contracts have traded above
$4.00 per bushel – at least through Wednesday, April 29th.
The CME MAY 2015 corn contract is now the “lead” corn futures contract, representing current grain
market price prospects through late April 2015, when the CME JULY 2015 corn contract will assume market
leadership. Local basis adjustments are still currently being made off MAY 2015 corn futures for spot cash corn
and grain sorghum price bids in North America as well as other World grain markets. The “current crop” MAY
2015 corn futures market contract initially responded in a neutral‐to‐negative manner to the information in
the April 9th USDA reports, but since then has trended “sideways‐to‐lower”. On the day of the report –
Thursday, April 9th – Chicago Mercantile Exchange (CME) MAY 2015 corn futures prices opened at $3.79 per
bushel, and traded in a range of $3.75 ‐ $3.80 during the session, before settling at $3.78 – down $0.01 ¼ for
the day (Figure 1). The USDA report findings were publicly released at approximately mid‐session, i.e., 12:00
noon eastern time (11:00 a.m. central) that day. Since then, MAY 2015 has traded from a high of $3.81 ¾ on
Monday, April 20th to a low of $3.59 on Tuesday, April 28th before closing at $3.63 ¾ on Wednesday, April 29th.
In early May 2015, CME JUNE 2015 corn futures will become the lead corn futures contract. On Wednesday,
April 29th the CME June corn futures contract closed at $3.67 ¾.
The CME DECEMBER 2015 corn contract is now the “new crop” corn futures contract, representing grain
market price prospects for the mid‐October through late‐November 2015 time period. DEC 2015 is the futures
contract which local basis adjustments are made off of for “fall harvest 2015” corn and grain sorghum forward
contract price bids or hedges in North American and other World grain markets. The “new crop” DECEMBER
2015 corn futures market contract also initially responded in a “neutral‐to‐negative” manner to the
Page | 3
information in the April 9th USDA reports, but since then has trended “sideways‐to‐lower”. On the day of the
report CME DECEMBER 2015 corn futures prices opened at $4.04 ½ per bushel, trading within the range of
$4.00 ½ ‐ $4.05 ¼ during the session, before settling at $4.03 ½ – down $0.01 ¼ per bushel for the day (Figure
1). Since then, DECEMBER 2015 corn futures prices has traded from a high of $4.04 ¾ on Monday, April 20th
to a low of $3.80 ¾ on Tuesday, April 28th before closing at $3.85 ½ that on Wednesday, April 29th.
Figure 1. MAY 2015 and DECEMBER 2015 CME Corn Futures Price Charts (electronic trade) …
January 1, 2009
Animal ID & Traceability
The first set of scenarios compare doing nothing (status quo) to adopting
full animal tracing for just the bovine sector. The bovine sector is the
focus here because it is it the sector among bovine, porcine, ovine, and
poultry that would incur the largest adoption cost of NAIS practices.
Under the status quo scenarios, we further explore what the impacts are
if by doing nothing we also lose export market access. We are likely to
lose export market access over time if we do not adopt NAIS practices,
even without any major market or major animal disease event, because
the international marketplace is making animal identification and tracing
systems the norm and any country that does not conform will have less
market access.
Table 2 summarizes the total loss per head to producers in the beef
sector, after all markets adjust as a result of not adopting NAIS practices
(i.e., status quo) under 0%, 10%, 25%, and 50% permanent export
market losses for beef. If we do nothing to adopt NAIS, and nothing
happens to export markets, the result is no cost, no market loss. If we do
nothing and we lose market access, which we believe is likely, the beef
industry will suffer losses. The losses would amount to $18.25 per head if
we do not adopt NAIS and we lose 25% of export market share. To put
this into perspective, this would be about like losing access to the South
Korean export market at 2003 export market shares.
Table 2. Net Annual Loss in Beef Producer Surplus from Status Quo
with Varying Export Market Losses
Export Market Loss Incurred
0% …
December 28, 2016
Grain Market Outlook
r U.S.
and Foreign economic and/or financial system disruptions impacting grain, energy, and other commodity
markets in 2017.
For example, U.S. financial policy announcements by the U.S. Federal Reserve in 2017 could lead to increases
in U.S. interest rates and the value of the U.S. dollar relative to other World currencies, which could in turn
have a negative impact on U.S. corn exports. Also, World geo‐political events could provide an unantici …
August 15, 2022
Ag Law Issues
retaliatory tariffs placed on U.S. ag goods by China in response … their average yields from 2008-
2012. All farm owners also … attribution rule originated in the 2008 Farm Bill and operates as …
September 5, 2017
Grain Market Outlook
s for “new crop” MY 2017/18 have been up to 2.370 bb rather than down to 1.000 bb.
Second, it is anticipated that low prices for U.S. corn will help maintain strong usage for domestic U.S.
ethanol and wet milling production, as well as livestock feeding through at least fall‐winter 2017.
Third, at least moderate continued strength is expected in U.S. corn exports due to low U.S. corn prices
and a moderate weakening of the U.S. dollar against other World currencies. Exports of U.S. corn are expected
to continue at a “decent” pace of 1.850 bb for “new crop” MY 2017/18 even though South American corn
production will continue to be a competitive factor in World trade through at least the end of 2017. Also,
preliminary forecasts for 2018 are that Brazilian corn acreage will be lower due to low prices and poor
profitability in 2017 – which may h …
July 19, 2017
Grain Market Outlook
heat is typically less so. This factor helps exports of U.S. Hard Red Spring (HRS) wheat (higher protein – good
quality) relative to World wheat export competitors. The drought conditions now occurring in the U.S. and
Canadian hard red spring wheat producing regions has raised the demand and price premiums offered for high
protein wheat supplies – whether they are from hard red winter wheat supplies or elsewhere.
Second, while the aggregate supply of wheat in World markets has grown, the supply of wheat from a “World
Less China” perspective is projected to have actually “contracted” or “diminished” further in “new crop” MY
2017/18. “World Less China” wheat percent stocks‐to‐use have declined to the tightest level since at least MY
2008/09 when U.S. wheat cash prices averaged $5.70 /bu. If this “China supply isolation factor” eventually
leads to noticeably tighter global supplies of available‐exportable wheat in coming months, then it will likely
have a significant positive impact U.S. wheat market prices in “new crop” MY 2017/18.
However, unless there is this change in the broader, overriding focus of the World wheat market away from
aggregate global supplies to available “World Less China” supplies – it is likely that significant World wheat
production problems and/or trade disruptions would need to occur in year 2017 in order to have wheat prices
recover significantly in later 2017. Such disruptions elsewhere would likely cause the market to then focus on
the limited availability of food quality wheat outside of China in the World market. Also, ongoing strength in
the U.S. dollar exchange rate continues to be a negative factor limiting the competitive affordability of U.S.
wheat exports in World markets.
USDA U.S. Wheat Supply/Demand Forecast for “New Crop” MY 2017/18
The USDA released their wheat production, supply‐demand and price projections for “new crop” MY 2017/18
in the July 12th Crop Production & World Agricultural Supply and Demand Estimates (WASDE) reports.
United States’ wheat plantings are projected to be 46.567 million acres (ma) – down from 50.154 ma in “old
crop” MY 2016/17 to the lowest level since the early 1900s. Harvested acres are forecast to be 38.115 ma
(83.72% harvested‐to‐planted) – down from 43.890 ma a year ago. The 2017 U.S. average wheat yield is
projected at 46.2 bu/ac, down from the 2016 record of 52.6 bu/acre.
Wheat production in the U.S. in 2017 is forecast to be 1.760 billion bushels (bb), down from 2.310 bb in 2015.
Projected “new crop” MY 2017/18 total supplies are 3.084 bb (down from 3.403 bb in “old crop” MY 2016/17),
with total use of 2.146 bb (down from 2.219 bb in “old crop” MY 2016/17).
The USDA projected “new crop” MY 2017/18 ending stocks to be 938 million bushels (mb) (vs 1.184 bb a year
ago), with percent ending stocks‐to‐use of 43.7% S/U (vs 53.4% last year and 50.0% the previous year). United
States’ wheat prices are projected to average $4.80 /bu – up from $3.89 in “old crop” MY 2016/17, but down
from $4.89 /bu in MY 2015/16, and $5.99 /bu in MY 2014/15. It is estimated by Kansas State University that
these USDA projections for “new crop” MY 2016/17 have a 50% probability of occurring.
Three Alternative KSU U.S. Wheat S/D Forecast for “New Crop” MY 2017/18
To represent possible alternative outcomes from the USDA’s July 12th projection, three potential KSU‐
Scenarios for U.S. wheat supply‐demand and prices are presented for “new crop” MY 2017/18.
Page | 3
KSU Scenario 1) “5 Year Avg Yield” Scenario (20% probability) assumes for “new crop” MY 2017/18 that the
following occurs. This scenario assumes that there will be 46.657 ma planted, 83.72% harvested‐to‐planted,
38.115 ma harvested, 45.8 bu/ac 5‐year average yield, 1.746 bb production, 3.030 bb total supplies, 975 mb
exports, 150 mb feed & residual use, 2.146 bb total use, 884 mb ending stocks, 41.19% S/U, & $5.05 /bu U.S.
wheat average price.
KSU Scenario 2) “Higher U.S. Wheat Exports” Scenario (20% probability) assumes the following for “new
crop” MY 2017/18. Planted acres of 46.657 ma are associated with 38.115 ma harvested, 45.8 bu/ac 5‐year
average yield, 1.746 bb production, 3.030 bb total supplies, 1.200 bb exports (due to foreign crop problems),
125 mb feed & residual use, 2.346 bb total use, 684 mb ending stocks, 29.16% S/U, & $6.00 /bu U.S. wheat
average price;
KSU Scenario 3) “Short U.S. Wheat Crop” Scenario (10% probability) assumes the following for “new crop” MY
2017/18. Planted acres of 46.657 ma, 83.72% harvested‐to‐planted, 38.115 ma harvested, 40.2 bu/ac low
“crop stress” yield, 1.633 bb production, 2.917 bb total supplies, 975 mb exports, 125 mb feed & residual use,
2.121 bb total use, 796 mb ending stocks, 37.53% S/U, & $5.35 /bu U.S. wheat average price.
…
March 1, 2015
USDA METSS Project
expenditure on U.S. goods, an event that increases during recessionary … economic stimulant. When these events shift the demand for U.S … trade that influence
the profitability of arbitrage opportunities …
August 22, 2018
Grain Marketing Presentations
for 2018 - 2019
Western KS Ag Research Center Field Day
Hays … KCOmaha Branch
Grain Market Events to Come ….
1) 2018 U.S … HRW wheat $’s in 2018?
o Profits for 2018 Kansas HRW Wheat …