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June 22, 2016
Grain Market Outlook
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I. U.S. Wheat Market Situation & Outlook
I‐A. June 10th USDA Crop Production & WASDE Reports
On June 10th the USDA National Agricultural Statistics Service (NASS) released its June 2016 Crop
Production report – containing U.S. winter wheat harvested acreage, yield and production forecasts for 2016 –
with information specific to the 2016 U.S. hard red winter (HRW) wheat, soft red winter (SRW) wheat, and
white winter (WW) wheat crops.
The NASS 2016 U.S. winter wheat production forecast was derived by USDA using a combination of a) an
objective yield survey, and b) a farmer operator survey – both conducted during the May 25 – June 7 period.
The objective yield survey was conducted in 10 states that accounted for 68% of 2015 U.S. winter wheat
production. Farm operators were interviewed to update previously reported acreage data, and to seek
permission to randomly locate sample plots in selected winter wheat fields. Projected biological yields were
calculated from these farmer plots – assessing number of wheat stalks, heads in late boot stage, and the
number of emerged heads to develop a count of the number of heads that would be harvested. These same
plots had been originally surveyed in late April – early May to monitor wheat development and update the
USDA’s yield projections on a plot‐by‐plot basis, and will be revisited again on a monthly basis through and
after harvest – to eventually obtain estimates of 2016 wheat harvest losses.
The farm operator survey included a sample of approximately 4,500 wheat producers representing all
major U.S. wheat producing areas. Producers were contacted by a combination of mail correspondence,
internet and personal interviews, and were asked about likely wheat yields on their farms in 2016.
On June 10th the USDA World Agricultural Outlook Board (WAOB) also released its June 2016 World
Agricultural Supply and Demand Estimates (WASDE) report – containing U.S. and World wheat supply‐
demand and price projections for the 2014/15, “old crop” 2015/16, and “new crop” 2016/17 marketing years.
The “old crop” 2015/16 marketing year for U.S. wheat began on 6/1/2015 and lasted through 5/31/2016, with
“new crop” MY 2016/17 beginning 6/1/2016 and continuing through 5/31/2017.
However, more current farmer survey‐based information on 2016 planted and harvested acreage for U.S.
wheat and other major and minor crops will be made available by USDA NASS in its’ June 30th 2016 Acreage
report. The findings of the USDA 2016 Acreage report will provide information from surveys of nearly 70,000
U.S. farm operators that were conducted the first two weeks in June 2016, supplemented with historical
planted‐to‐harvested acreage relationships and the historic accuracy of past USDA Acreage report projections.
I‐B. CME Kansas Hard Red Winter Wheat JULY & DECEMBER 2016 Futures
Since a low of $4.52 ¾ on April 11, 2016, JULY 2016 Chicago Mercantile Exchange (CME) Kansas
hard red winter wheat futures prices traded up to a high of $5.09 ¼ on April 21st. Then after falling to
lows of $4.41 ¼ on May 11th and 12th, JULY 2016 CME KS HRW Wheat futures traded higher again to
$4.95 ½ on June 8th before moving lower again to a low of $4.77 ½ on June 21st before closing at
$4.78 on that same day (Figure 1).
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Similarly, since a low of $4.88 on April 11, 2016, DECEMBER 2016 CME Kansas hard red winter
wheat futures prices traded up to a high of $5.45 on April 21st. Then after falling to a low of $4.83 ½
on May 11th, DECEMBER 2016 CME KS HRW Wheat futures traded sideways then higher again to
$5.35 ½ on June 8th before moving lower again to to a high of $4.34 ½ on June 21st before closing at
$4.35 on that same day (Figure 1).
Figure 1. JULY 2016 & DECEMBER 2016 CME Kansas Wheat Futures Price Charts …
March 4, 2025
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September 17, 2015
Grain Market Outlook
I‐C. U.S. Corn Supply‐Demand
U.S. Corn Acreage, Yield & Production
The USDA’s projections of 2015 U.S. corn planted acres from the March 31st Prospective Plantings report
were adjusted downward in the USDA June 30th Acreage report, and have since been used without adjustment
in the July 10th, August 12th, and September 11 USDA Crop Production and WASDE reports. In the June 30,
2015 USDA Acreage report and subsequent July, August, and September Crop Production reports the USDA
projected that 2015 U.S. corn total planted acreage would be 88.897 million acres (ma), down 302,000 acres
from 89.199 ma projected earlier in the March 31st USDA Prospective Plantings report. This projection of
88.897 ma of 2015 U.S. corn planted is down 1.700 ma (‐1.9%) from 90.597 ma in 2014, down 6.468 ma (‐
6.8%) from 95.365 ma in 2013, down 8.394 ma (‐8.6%) from the record high of 97.291 ma in 2012, and also
down from 91.921 ma in 2011 (Table 1 and Figure 3).
The USDA projected that 2015 U.S. corn harvested acreage would be 81.101 million acres (ma), down
2.035 ma (‐2.4%) from 83.136 ma in 2014, down 6.350 ma (‐7.3%) from the record high of 87.451 ma in 2013,
down 6.534 ma (‐7.2%) from 87.365 ma in 2012, and down from 83.981 ma in 2011 (Table 1 and Figure 3).
The USDA implicitly projected that the proportion of harvested‐to‐planted acreage in 2015 is 91.2%, down
from 91.8% in 2014, and from 91.7% in 2013, but up from 89.9% in drought‐stricken 2012.
The USDA forecast 2015 U.S. average corn yields to be 167.5 bushels per acre (bu/ac) – down 1.3 bu/ac
from the USDA’s August projection, but still less than the record high of 171.0 bu/ac in 2014 (Table 1 and
Figure 4). Although this September 2015 USDA projection of 2015 U.S. corn yields of 167.5 bu/ac is down from
the record 171.0 bu/ac in 2014, it would still be the second highest U.S. corn yield to date, being up from 158.1
bu/ac in 2013, the drought affected 2012 low yield of 123.1 bu/ac., 147.2 bu/ac in 2011, 152.8 bu/ac in 2010,
and still up from the previous historic record high of …
September 1, 2015
Grain Market Outlook
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I‐C. U.S. Corn Supply‐Demand
U.S. Corn Acreage, Yield & Production
The USDA’s projections of 2015 U.S. corn planted acres from the March 31st Prospective Plantings report
were adjusted downward in the USDA June 30th Acreage report, and have since been used without adjustment
in the July 10th and August 12th USDA Crop Production and WASDE reports. In the June 30, 2015 USDA
Acreage report and subsequent July and August Crop Production reports the USDA projected that 2015 U.S.
corn total planted acreage would be 88.897 million acres (ma), down 302,000 acres from 89.199 ma projected
earlier in the March 31st USDA Prospective Plantings report. This projection of 88.897 ma of 2015 U.S. corn
planted is down 1.700 ma (‐1.9%) from 90.597 ma in 2014, down 6.468 ma (‐6.8%) from 95.365 ma in 2013,
down 8.394 ma (‐8.6%) from the record high of 97.291 ma in 2012, and also down from 91.921 ma in 2011
(Table 1 and Figure 3).
The USDA projected that 2015 U.S. corn harvested acreage would be 81.101 million acres (ma), down
2.035 ma (‐2.4%) from 83.136 ma in 2014, down 6.350 ma (‐7.3%) from the record high of 87.451 ma in 2013,
down 6.534 ma (‐7.2%) from 87.365 ma in 2012, and down from 83.981 ma in 2011 (Table 1 and Figure 3).
The USDA implicitly projected that the proportion of harvested‐to‐planted acreage in 2015 is 91.2%, down
from 91.8% in 2014, and from 91.7% in 2013, but up from 89.9% in drought‐stricken 2012.
The USDA forecast 2015 U.S. average corn yields to be 168.8 bushels per acre (bu/ac) – up 2.0 bu/ac from
the USDA’s July projection, but still less than the record high of 171.0 bu/ac in 2014 (Table 1 and Figure 4).
Although this August 2015 USDA projection of 2015 U.S. corn yields of 168.8 bu/ac is down from the record
171.0 bu/ac in 2014, it would still be the second highest U.S. corn yield to date, being up from 158.1 bu/ac in
2013, the drought affected 2012 low yield of 123.1 bu/ac., 147.2 bu/ac in 2011, 152.8 bu/ac in 2010, and still
up from the previous historic record high of …
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 …
October 20, 2016
Grain Market Outlook
orecast for “Current Crop” MY 2016/17: The USDA projected 2016 U.S.
wheat plantings of 50.154 million acres (ma) – down 4.845 ma (‐8.8%) from 2015. The USDA also forecast
2016 harvested acres of 43.890 ma which would be down 3.428 ma (‐7.2%) vs 2015. Based on record high
projected 2016 U.S. wheat yields of 52.6 bu/ac (up from 43.6 bu/ac in 2015), 2016 U.S. wheat production is
forecast to be 2.310 bb (vs 2.062 bb in 2015), with total supplies of 3.410 bb (up from 2.927 bb in “old crop”
MY 2015/16), and total use of 2.272 bb (up from 1.952 bb in “old crop” MY 2015/16).
Given these numbers, the USDA projected “current crop” MY 2016/17 ending stocks of 1.138 bb (vs 976 mb a
year ago), with percent ending stocks‐to‐use of 50.09% S/U (vs 50.0% last year and 37.2% the previous year).
U.S. wheat average prices are projected to be in the range of $3.50 to $3.90 (midpoint = $3.70 /bu) – down
from $4.89 /bu in “old crop” MY 2015/16 and $5.99 /bu in MY 2014/15. It is assumed by Kansas State
University that these USDA projections for “current crop” MY 2016/17 have an 80% probability of occurring.
Alternative KSU U.S. Wheat S/D Forecast for “Current Crop” MY 2016/17: As an alternative to the USDA’s
projection, one potential KSU‐Scenario for U.S. wheat supply‐demand and prices is presented for “current
crop” MY 2016/17 – and is given a 20% probability of occurring. Assuming the same 2016 acreage, yields,
imports, and production as USDA, as well as food and seed use, the alternative scenarios assumes a) higher
U.S. wheat exports (1.125 bb vs 975 mb by USDA), and b) lower feed and residual use (240 mb vs 260 mb by
USDA).
The resulting KSU “Higher Exports with Spring 2017 U.S. Wheat Development Problems” Scenario (20%
probability) assumes for “current crop” MY 2016/17: 2.310 bb production, 3.410 bb total supplies, 1.125 bb
exports, 240 mb feed & residual use, 1.008 bb ending stocks, 41.97% S/U, & $4.35 /bu U.S. wheat avg. price.
KSU U.S. Wheat S/D Forecasts for “Next Crop” MY 2017/18: Two alternative KSU‐Scenarios for U.S. wheat
supply‐demand and prices are presented for “next crop” MY 2017/18. These scenarios assume a 5% decline in
U.S. wheat planted and harvested acreage in 2017 (with a 7% decline for U.S. winter wheat, and no changes
for other spring wheat and durum wheat classes. These KSU projections also assume at least a continued
moderation in the value of the U.S. dollar during the “next crop” 2017/18 marketing year, with some
improvement in U.S. wheat exports as a result.
KSU Scenario A) “Trend Yield, Moderately Higher Exports” Scenario (65% probability) assumes for “next crop”
MY 2017/18: 47.624 ma planted, 41.696 ma harvested, 47.0 bu/ac trend yield, 2.063 bb production, 3.326 bb
total supplies, 1.000 bb exports, 250 mb feed & residual use, 2.286 bb total use, 1.040 bb ending stocks,
45.49% S/U, & $4.10 /bu U.S. wheat average price; and
KSU Scenario B) “Lower Yield, Average Exports” Scenario (35% probability) assumes for “next crop” MY
2017/18: 47.624 ma planted, 41.696 ma harvested, 43.6 bu/ac lower yield, 1.914 bb production, 3.177 bb total
supplies, 980 mb exports, 240 mb feed & residual use, 2.256 bb total use, 921 mb ending stocks, 40.82% S/U,
& $4.50 /bu U.S. wheat average price.
…
May 22, 2017
Grain Market Outlook
… Harvested of Planted
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An early 2017 KSU projection is for All U.S. Wheat Harvested Acres in 2017 to decline 13.4% to 37.999 ma
from 43.890 ma in 2016. This estimate is calculated by multiplying the earlier USDA projection of 2017 U.S.
wheat planted acres (i.e., 46.059 ma) by 0.8250, i.e., a lower percentage than was used by the USDA in it’s
May 10, 2017 WASDE report – reflecting moderately higher wheat freeze, flooding, disease and abandonment
than the USDA. This KSU estimate is lower than the 2007‐2016 average of U.S. harvested‐to‐planted wheat
acres of 85.4%. This U.S. wheat harvested acreage scenario is given a combined 40% probability of occurring
in “next crop” MY 2017/18 by KSU.
An alternative “low yield‐low harvested acreage” scenario is assumed with percent U.S. harvested‐to‐
planted acres matching the 2013 low of 80.6% ‐ reflecting the added crop damage and abandonment that
would occur in a large scale short crop scenario. Given U.S. planted acres of 46.059 ma, 80.6% harvested‐to‐
planted acres would equal 2017 U.S. harvested acres of 37.124 ma. This “short crop” scenario is given a 10%
probability of occurring in “next crop” MY 2017/18 by KSU.
U.S. Wheat Yields
In the May 10, 2017 WASDE report, the USDA projected 2017 U.S. wheat yields to be 47.2 bu/ac, which
would be tied for the 2nd highest on record. This 2017 projection would be down from the record high 52.6
bu/ac in 2016, up from 43.6 bu/ac in 2015, and 43.7 bu/ac in 2014, equal to 2nd highest yield on record of 47.1
bu/ac in 2013, and up from the 3rd highest yield previously on record of 46.2 bu/ac in 2012 (Table 1 and Figure
6). This USDA projection is given a 50% probability of occurring by KSU.
An early pair of KSU projections for 2017 U.S. Wheat Yields include the following forecasts (Table 1a):
a) a 40% probability of a trend line U.S. wheat yield in 2017 of 47.0 bu/ac, and
b) a 10% probability of a lower U.S. wheat yield in 2017 of 40.0 bu/ac – essentially equal to U.S. wheat
yields in 2007 (40.2 bu/ac) – the most recent 10 year low.
Figure 6. U.S. All Wheat Yield (2000‐2017) and KSU 2017 Yield Projections as of the May 10, 2017 WASDE
report
42.0 …
January 1, 2013
Land Leasing
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If the water supply … In the event that it becomes necessary … on the property. In the event of any legally-
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August 15, 2022
Ag Law Issues
equals 86 percent of the previous five-year average national … less than 76 percent of the previous five-year … discussion.
Monetary Limit
As previously noted, the Farm Bill established …
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% …