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August 1, 2025
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What we know from KFMA data 2002‐2024
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May 15, 2014
Grain Market Outlook
p from 1,117 mmt in “current year”
MY 2012/13, and up from 1,003 mmt in MY 2011/12. Projected World corn ending stocks of 181.7 mmt
(18.8% S/U) in “new crop” MY 2014/15 are up from 168.4 mmt (17.8% S/U) in “current year” MY 2013/14, and
up from 138.2 mmt (16.0% S/U) in MY 2011/12. Forecast total MY 2014/15 corn production for major export
competitors Brazil (74.0 mmt – down 1.0) and Argentina (26.0 mmt – up 2.0) is projected to be 1.0% higher in
the coming year – with harvests available for use in the early months of 2015 to compete with the U.S. in
World grain export markets. However, these projections are still uncertain given the possibility of a strong El
Nino event beginning in mid‐2014. Ongoing geopolitical problems in the Black Sea region is reported to have
not had an appreciable impact on the availability of Ukraine corn to World markets, but would be a disrupting
market factor in World corn and coarse grain markets if it did so. …
May 14, 2014
Grain Market Outlook
Low
April 11th
$8.55 ½ High
May 6th
$8.24 ½ Close
May 12th
Page | 3
Futures trended generally higher since the low, moving as high as $8.55 ½ on May 6th prior to the lower closes
following the May 9th USDA reports.
I‐C. U.S. Wheat Production
U.S. All Wheat Acreage, Yield & Production
Following the results of March 31st USDA NASS Prospective Plantings Report, the USDA projected that
2014 U.S. wheat total planted acreage would be 55.815 million acres (ma), down from 56.156 ma in 2013 and
55.666 ma in 2012, but up from 54.409 ma in 2011 (Table 1 and Figures 1‐2). In addition, the USDA projected
2014 U.S. wheat harvested acreage to be 47.2 ma, up from 45.157 ma in 2013, down from 48.921 ma in 2012,
and up from 45.705 ma in 2011.
The forecast 2014 proportion of harvested‐to‐planted acreage for all U.S. wheat is projected to be 82.2%,
up from 80.4% in 2013, but down from 87.9% in 2012 and 84.0% in 2011. The proportion of harvested‐to‐
planted U.S. wheat acreage in 2013 of 80.4% was the lowest since 81.6% in 2006 and 76.0% in 2002.
The projected 2014 U.S. average wheat yield of 42.7 bushels per acre (bu/ac) is down from the record high
of 47.2 bu/ac in 2013, the previous records of 46.3 bu/ac in 2012 and 2010, and 43.7 bu/ac in 2011 (Table 1
and Figure 3). The USDA projected 2014 U.S. wheat production to be 1.963 billion bushels (bb) – which is
down from 2.130 bb in 2013, 2.266 bb in 2012, and 1.999 bb in 2011 (Table 1).
U.S. Winter Wheat Acreage, Yield, and Production for 2014
In its May 9th USDA Crop Production report the USDA projected U.S. winter wheat planted acreage to be
42.007 million acres (ma). These acres of winter wheat were seeded in the fall of 2013 with the intention of
harvesting them in the summer of 2014. This projection of 42.007 ma planted in the U.S. in 2014 is down from
43.090 ma in 2013, but greater than 41.224 ma in 2012, and 40.646 ma in 2011 (Figure 1). Winter wheat
harvested acreage in the U.S. in 2014 is projected to be 32.572 ma – with an implicit 2014 U.S. winter wheat
percent harvested‐to‐planted acres of 77.5%. This compares to U.S. winter wheat harvested acreage in 2013
of 32.402 ma – with an implicit 2013 U.S. winter wheat percent harvested‐to‐planted acres of 75.2%. IF
extreme drought conditions continue in the U.S. Great Plains states of Texas, Oklahoma, Kansas, Colorado and
Nebraska in coming weeks and months – the five states of which make up the primary U.S. hard red winter
wheat production area – then the proportion of harvested‐to‐planted acres in 2014 could decline even further,
possibly even below the 75.2% level of 2013.
Winter wheat yields in 2014 in the U.S. are projected to be 43.1 bu/ac, down from the record high of 47.4
bu/ac in 2013. United States’ 2014 winter wheat production is forecast to be 1.403 bb, down from 1.534 bb in
2013. Of the 2014 total of 1.963 bb, 2014 U.S. hard red winter wheat production is forecast to be 746 million
bushels (mb), up marginally from 744 mb in 2013. U.S. 2014 soft red winter wheat production is forecast to
be 447 million bushels (mb), down from 565 mb a year ago – primarily due to lower planted acreage in 2014.
White winter wheat production in the U.S. in 2014 is projected to be 209 mb, down 7% from 2013.
U.S. Other Spring & Durum Wheat Acreage, Yield and Production for 2014
The USDA projection of 2014 U.S. other spring wheat planted acreage is equal to the March 31st USDA
Prospective Plantings report forecast of 12.009 ma. Similarly, 2014 U.S. durum wheat planted acreage is
forecast to be 1.799 ma. The USDA’s estimate of 2014 U.S. other spring wheat planted acreage to 12.009 ma is
Page | 4
down from both 12.289 ma in 2012, and 12.394 ma in 2011. The USDA’s estimate of 2013 U.S. durum wheat
planted acreage to 1.799 ma is down from 2.153 ma in 2012, but up from 1.369 ma in 2011.
Based on its internal projections that have not been formally released to the public, the USDA World
Agricultural Outlook Board has calculated 2014 U.S. other spring wheat and durum harvested acres using 10‐
year harvested‐to‐planted ratios by state off of its state‐level planted acreage projections. Similarly, spring
wheat and durum wheat yields were estimated using 1985‐2013 yield trends by state (except for durum wheat
in Arizona, California, and Idaho). The combined 2014 production forecast for U.S. spring and durum wheat
together is approximately 560.5 mb, down from 595.4 mb (533.5 mb of other spring wheat, and 61.9 mb or
durum wheat) in 2013.
I‐D. U.S. Wheat Total Supplies
The USDA projected that total supplies of U.S. wheat for “new crop” MY 2014/15 would be 2.706 bb – the
lowest amount of U.S. wheat supplies since the 2006/07 and 2007/08 marketing years. Projected total
supplies of 2.706 bb in “next crop” MY 2014/15 is comparable to 2.501 bb in MY 2006/07, 2.620 bb in MY
2007/08, 2.932 bb in MY 2008/09, 2.993 bb in MY 2009/10, 3.279 bb in MY 2010/11, 2.974 bb in MY 2011/12,
3.131 bb in MY 2012/13, and 3.023 bb in “current year” MY 2013/14.
Total supplies of 2.706 bb resulted from beginning stocks of 583 mb, projected 2014 production of 1.963
bb, and projected imports of 160 mb (Table 1).
Forecast U.S. wheat beginning stocks of 583 mb in “next crop” MY 2014/15 would be down 18.8% from
718 mb beginning stocks in “current” MY 2013/14, and down from 743 mb in MY 2013/14. This would be the
lowest level of U.S. wheat beginning stocks since 306 mb in MY 2008/09 (following the tight ending stocks
situation that developed in MY 2007/08. This projected decline in U.S. wheat ending stocks into the “new
crop” 2014/15 marketing year is a continuance of the steadily increasing tightness of U.S. wheat supplies that
has occurred over the last four marketing years (since the recent high in beginning stocks of 976 mb in MY
2010/11).
Projected U.S. wheat imports of 160 mb for “new crop” MY 2014/15 would be the second highest amount
on record, down from the record high of 170 mb in “current” MY 2013/14. The next highest amounts since MY
1973/74 have been: 1) 127 mb in MY 2008/09; 2) 123 mb in MY 2012/13; 3) 122 mb in MY 2006/07; and 4) 119
mb in MY 2009/10. Record large 2013 Canadian wheat production of 37.5 million metric tons (mmt) (or
1,377.5 million bushels in 60 lb/bu units) has had and likely will continue to have an impact on U.S. wheat
imports until the 2014 U.S. wheat harvest period. The next largest Canadian wheat crops since 1960 that were
over 30.0 mmt were in 1990 (32.098 mmt), 1991 (31.946 mmt), and 1986 (31.359 mmt). Projected Canadian
wheat production in the “new crop” 2014/15 marketing year is lower – down to 28.5 mmt.
I‐E. U.S. Wheat Total Use & Use by Category
Food Use: Projected U.S. wheat food use of 970 mb in “new crop” MY 2014/15 has been trending steadily
higher over time due to steady growth in the U.S. population and associated food demand for processed
wheat products. This projected amount of 970 mb food use in “new crop” MY 2014/15 is up 10 mb or 1.04%
from 960 mb in “current” MY 2013/14, from 945 mb in MY 2012/13, and from 941 mb in MY 2011/12 (Table 1
and Figure 4).
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Seed Use: Forecast seed use of 76 mb in “new crop” MY 2014/15 is up marginally from 74 mb in “current”
MY 2013/14, and from 73 mb in “last year’s” MY 2012/13, but equal to 76 mb in MY 2011/12 (Table 1 and
Figure 4). The USDA forecast U.S. wheat seed use of approximately 76 mb for “next year” MY 2014/15 extends
the historic pattern of the existence of a relatively small but inelastic demand for U.S. wheat seed. Seed wheat
demand is driven primarily by the amount of U.S. wheat seed needed to plant adequate U.S. wheat acreage
each year (from on‐farm and commercial seed sources) and also the need for adequate wheat seed stocks to
cover possible seed wheat production shortfalls.
Exports: Projected U.S. wheat exports of 950 mb in “new crop” MY 2014/15 are down sharply from 1.185
bb for “current” MY 2013/14 (which is up 10 mb from April). This amount of U.S. wheat exports would be the
lowest since 879 mb in MY 2009/10. The anticipation of lower available supplies of U.S. hard red winter wheat
for export sales in 2014/15 along with the likelihood of more than adequate foreign wheat supplies are factors
in this lower U.S. export projection of 950 mb in “new crop” MY 2014/15 (Table 1 and Figure 4). That said, the
risk of lower “new crop” MY 2014/15 Australian wheat production with the forecast onset of an El Nino
weather pattern in coming months, as well as the uncertain impact on World wheat trade in the future from
geopolitical conflicts in the Black Sea Region (between Russian and Ukraine) are factors that may support
World wheat prices in the new crop marketing year.
On May 1st cumulative U.S. wheat export shipments for the “current” 2013/14 marketing year totaled
1.021 bb, which is 86.2% of the USDA’s projected “current” MY 2013/14 exports of 1.185 bb with 92.3% (48 of
52 weeks) of the marketing year completed. “Current year” MY 2013/14 ends on May 31, 2014. United States’
export shipments will need to average 41.0 mb per week through the remainder of the “current” 2013/14
marketing year to attain the USDA’s May WASDE projection of 1.185 bb. Wheat export shipments by the U.S.
of 24.9 mb and 19.3 mb occurred during the weeks ending March 24th and May 1st, respectively, were “behind
pace” to meet the USDA forecast of 1.185 bb in the “current” 2013/14 marketing year. (Source: USDA Foreign
Agricultural Service U.S. Weekly Export Sales report ‐ http://apps.fas.usda.gov/export‐sales/esrd1.html).
However, accounting for unshipped forward sales of exports of 139.1 mb in U.S. wheat for “current” MY
2013/14 (that had not yet been shipped as of May 1st), total U.S. wheat shipped plus outstanding shipments
added up to 1.161 bb (i.e., 1.021 bb shipped plus 139.1 mb forward sales with rounding) for “current” MY
2013/14. This amounts to 98.0% of the USDA’s projection of 1.185 bb for “current” MY 2013/14 with 92.3% of
the marketing year having already occurred (i.e., 48 of 52 weeks).
There are also 114.9 mb of forward sales of U.S. wheat in the “new crop” 2014/15 marketing year as of
May 1st. It is possible if not likely that some of the unshipped forward sales remaining in “current year” MY
2013/14 will be cancelled and possibly “rolled forward” into “new crop” MY 2014/15 (beginning on June 1st).
Feed & Residual Use: The USDA projected that U.S. feed and residual use would be 170 mb in “next crop”
MY 2014/15, down from 220 mb for “current” MY 2013/14, from the recent high of 388 mb in MY 2012/13,
while still being up from 162 mb in MY 2011/12 (Table 1 and Figure 4). Domestic U.S. wheat feeding has
declined due to sizable 2013 U.S. corn and grain sorghum crops – leading to more abundant U.S. feedgrain
supplies at lower market prices than during the “drought stricken” MY 2012/13. Subsequently, there is now
lower cross‐market demand for U.S. wheat in livestock feed rations – in both domestic or foreign markets.
Total U.S. Wheat Use: Summing the categories together, total use of U.S. wheat for “new crop” MY
2014/15 is projected to be 2.166 bb (Table 1 and Figure 4). U.S. wheat total use of 2.166 bb in “new crop” MY
2014/15 would be the 4th smallest amount of U.S. wheat total usage over the last decade (since MY 2005/06).
Total U.S. wheat use of 2.166 bb in “new crop” MY 2014/15 compares to 2.154 bb in MY 2005/06, 2.045 bb in
Page | 6
MY 2006/07, 2.314 bb in MY 2007/08, 2.275 bb in MY 2008/09, 2.018 bb in MY 2009/10, 2.417 bb in MY
2010/11 (the 2nd largest amount during the 8 year period), 2.231 bb in MY 2011/12, 2.414 bb in “last year’s”
MY 2012/13 (the 3rd largest amount during the 8 year period) and the largest amount in this period of 2.439 bb
in “current” MY 2013/14. Total usage of U.S. wheat in “last year’s” MY 2012/13 and “current” MY 2013/14
were boosted by higher than usual livestock feeding of wheat in reaction to extremely tight U.S. corn and grain
sorghum supplies which led to substitutionary demand for U.S. wheat feeding.
I‐F. U.S. Wheat Ending Stocks, % Stocks‐to‐Use, and Prices
United States’ wheat ending stocks for the “new crop” 2014/15 marketing year were projected to be 540
mb (Table 1 and Figure 4). The USDA’s May 9th projection of “new crop” MY 2014/15 ending stocks of 540 mb
is still uncertain, but are still markedly larger than 306 mb in MY 2007/08 – the historic “tight stocks”
marketing year in recent times. Over the last eight marketing years, U.S. wheat ending stocks have been 306
mb in MY 2007/08, 657 mb in MY 2008/09, 976 mb in MY 2009/10, 862 in MY 2010/11, 743 mb in MY
2011/12, 718 mb in MY 2012/13, with a projection of 583 mb in “current” MY 2013/14.
Percent (%) ending stocks‐to‐use for U.S. wheat of 24.9% in “next crop” MY 2014/15 are up from 23.9% in
“current” MY 2013/14 (Table 1 and Figures 5‐6). This projection of U.S. wheat % ending stocks‐to‐use would
be the second lowest in the last seven (7) years, and is comparable to the historic 67 year low of 13.2% in MY
2007/08, 28.9% in MY 2008/09, 48.4% in MY 2009/10, 35.7% in MY 2010/11, 33.3% in MY 2011/12, 29.7% in
MY 2012/13, and now the May 2014 projection of 23.9% for the “current” 2013/14 marketing year.
U.S. average wheat prices for “new crop” MY 2014/15 are projected to be in the range of $6.65‐$7.95 per
bushel (“/bu”) (midpoint = $7.30 /bu). This compares to $6.85 /bu in “current” MY 2013/14 and the record
high of $7.77 /bu for MY 2012/13 (Table 2 and Figures 5‐6). Since the record tight U.S. and World wheat
ending stocks marketing year of 2007/08, U.S. wheat prices have varied in the following manner over time:
$6.48 per bushel in MY 2007/08, $6.78 in MY 2008/09, $4.87 in MY 2009/10, $5.70 in MY 2010/11, $7.24 in
MY 2011/12, $7.77 in MY 2012/13, $6.85 in “current year” MY 2013/14, and now a forecast range of $6.65‐
$7.95 /bu in “new crop” MY 2014/15. It should be noted that the top end of the “new crop” price range of
$7.95 /bu would be a new record high U.S. wheat price.
An indicator of inflation that has occurred in U.S. wheat prices is found by comparing the situation in the
historical “tight stocks” year of MY 2007/08 with the “current” MY 2013/14. In MY 2007/08, U.S. wheat %
ending stocks‐to‐use were a record low 13.2% with an average U.S. wheat price of $6.48 per bushel – at that
time a record high. In comparison, in “current” MY 2013/14 U.S. wheat % ending stocks‐to‐use are estimated
to be higher at 23.9%, but with U.S. wheat prices being moderately higher as well at $6.85 /bu.
I‐G. KSU U.S. Wheat Supply‐Demand Scenarios for “New Crop” MY 2014/15
These early 2014 projections by Kansas State University of U.S. wheat production and U.S. wheat supply‐
demand balances and prices for the “coming” or “next crop” 2014/15 marketing year reveal the importance of
planted and harvested acreage, yields, beginning stocks, export and feed use prospects will have on wheat
markets in the coming year. As of the May 9th USDA Crop Production and WASDE reports, information is now
available in regards to the development of the U.S. winter wheat crop, planting prospects for spring and
durum wheat, initial observations on prospects of the 2014/15 wheat crops of major foreign export
competitors, and the USDA’s initial forecast of U.S. wheat supply‐demand and price prospects for “new crop”
Page | 7
MY 2014/15. There are still a wide array of possible U.S. wheat production, supply‐demand balance, and price
outcomes for the “next crop” 2014/15 marketing year – due to the uncertainty of associated with supply‐
demand prospects at this point in time.
KSU Probability‐Based Projections U.S. Wheat Supply‐Demand & Price Scenarios for MY 2014/15
KSU projections of 2014 U.S. wheat planted and harvested acreage for alternative production scenarios are
found in Table 1 and Figure 5. Projections of U.S. wheat planted and harvested acres follow the forecast
uncertainty measures provided in the USDA May 9th WASDE forecasts – which in turn were based largely on
the results of the March 31st USDA Prospective Plantings report. As mentioned earlier, the USDA harvested
acreage projections are subject to change – especially if drought conditions persist in the U.S. hard red winter
wheat production areas.
Varying projections of 2014 U.S. wheat yields are found in Table 1 and Figure 3. Probability‐weighted KSU
forecasts of U.S. wheat average prices for “new crop” MY 2014/15 that are based on projections of U.S. wheat
% ending stocks‐to‐use provided Table 1 and Figures 5‐6.
Three probability‐weighted KSU U.S. wheat supply‐demand and price scenarios for “next crop” MY
2014/15 are shown below.
1 …
June 18, 2014
Grain Market Outlook
“new crop” MY 2014/15 are up from 1,120 mmt in MY 2012/13,
and up from 1,003 mmt in MY 2011/12. Projected World corn ending stocks of 182.7 mmt (18.9% S/U) in MY
2014/15 are up from 169.1 mmt (17.8% S/U) in MY 2013/14, and up from 138.1 mmt (16.0% S/U) in MY
2011/12. Combined “new crop” MY 2014/15 corn production for major export competitors Brazil (74.0 mmt –
down 2.0) and Argentina (26.0 mmt – up 2.0) is projected to be unchanged – with harvests with the U.S. in
World grain export markets in late winter‐spring 2015. However, these projections are still uncertain given the
possibility of a strong El Nino event beginning in mid‐2014.
A number of key corn market factors in “new crop” MY 2014/15 are still unknown, including a) final 2014 U.S.
corn planted acreage, b) uncertainty regarding 2014 U.S. and World corn production prospects should an El
Nino‐related weather patterns occur in 2014 as is now forecast, and c) the potential impact of ongoing and
escalating geopolitical conflicts in the Black Sea Region between major World coarse grain and wheat
exporters Russia and the Ukraine, as well as in the Middle East. Escalating conflict in the Middle East could
impact World oil and U.S. bioenergy market prices, and have a corresponding impact on feedgrain markets.
Page | 2
I. U.S. Corn Market Situation and Outlook
I‐A. June 2014 USDA Reports & Projections for “New Crop” MY 2014/15
On June 11, 2014 the USDA World Agricultural Outlook Board (WAOB) released its June 2014 World
Agricultural Supply and Demand Estimates (WASDE) report – containing U.S. and World corn supply‐demand
and price projections for both the “old crop” 2013/14 marketing year as well as for “new crop” MY 2014/15.
The “old crop” 2013/14 marketing year will end on August 31, 2014, while the “new crop” 2014/15 U.S. wheat
marketing year will last from September 1, 2014 through August 31, 2015.
The USDA National Agricultural Statistics Service (NASS) will release its 2014 Acreage and June 1st
Quarterly Stocks reports on Friday, June 30. The 2014 Acreage report will provide a survey‐based update of
2014 planted and harvested acreage of U.S. corn and other crops. The June 1st Quarterly Stocks report will
provide information on the pace of U.S. corn usage during the March‐April‐May 2014 quarter, and allow for
increased accuracy in projecting U.S. corn “old crop” MY 2013/14 ending stocks on August 31, 2014.
I‐B. Corn Futures Trends Since the June 11th USDA Reports
The “old crop” JULY 2014 corn futures market contract responded in a volatile and ultimately negative
manner to the information in the June 11th USDA reports. On the day of the report – Wednesday, June 11th –
Chicago Board of Trade (CBOT) JULY 2014 corn futures prices opened at $4.45 ½ per bushel, and traded as
high as $4.49 ¾ and as low as $4.39 ½ during the session, before settling at $4.41 – down $0.04 ½ 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 JULY 2014 corn futures prices have traded first higher
and then lower – ranging from a high of $4.49 ¾ on Friday, June 13th to a low of $4.35 ½ on Tuesday, June 17th
before closing at $4.38 ¾ on the same day.
Figure 1. July 2014 and December 2014 CME Corn Futures Price Charts (electronic trade) …
July 16, 2014
Grain Market Outlook
roduction in North America or other major wheat producing regions of the World, or geopolitically‐driven
disruptions to trade World wheat markets in such places as the Middle East or the Black Sea region. Unless or
until such disruptive events as these would occur, World wheat market prospects are pointing to steady‐to‐
lower World wheat prices.
USDA U.S. Wheat Forecast for “New Crop” MY 2014/15: Compared to a year earlier, the USDA projected
lower 2014 U.S. wheat production, reduced wheat usage, an increase in U.S. wheat ending stocks and %
stocks‐to‐use, and lower prices in “new crop” MY 2014/15. The USDA’s projected “new crop” market scenario
is: 56.5 million acres (ma) planted, 46.2 ma harvested, 81.9% harvested‐to‐planted acres, 43.1 bu/ac yield (up
from 42.3 bu/ac a month ago), a 1.992 billion bushel (bb) 2014 U.S. wheat crop (up 50 million bushels or ‘mb’),
2.741 bb total supplies (up 46 mb), 900 mb exports (down 25 mb), 2.081 bb total use (down 40 mb), 660 mb
ending stocks (up 86 mb), 31.7% ending stocks‐to‐use (up from 27.1%), and $6.60 average price per bu. (range
of $6.00 to $7.20) – down from $7.00 /bu.
KSU U.S. Wheat Forecast for “New Crop” MY 2014/15: KSU projections of “new crop” MY 2014/15 supply‐
demand balances and prices are as follows: a) “Likely Production” Scenario: 65% prob. of 46.2 ma harvested,
43.1 bu/ac, 1.992 bb 2014 U.S. wheat production, 2.741 bb U.S. wheat supplies, 900 mb exports, 2.081 bb total
use, 660 mb ending stocks, 31.7% S/U, & $6.10 /bu; b) “Low Production” Scenario: 20% prob. of 45.4 ma
harvested, low yields of 41.1 bu/ac (both harvested acres and yield lower than USDA), 1.868 bb 2014 U.S.
wheat production, 2.628 bb U.S. wheat supplies, 890 mb exports, 2.061 bb total use, 567 mb ending stocks,
27.5% S/U, & $6.55 /bu; and c) “Expected Production – Higher Exports” Scenario: 15% prob. of 46.2 ma
harvested, yields of 43.1 bu/ac, 1.992 bb 2014 U.S. wheat production, 2.741 bb U.S. wheat supplies, 1.050 bb
exports (up 150 mb from USDA forecast), 2.231 bb total use, 510 mb ending stocks, 22.9% S/U, & $7.50 /bu.
USDA World Wheat: World wheat total supplies of 889.5 mmt in “new crop” MY 2014/15 are down marginally
from 889.8 mmt in “old crop” MY 2013/14, but up from 854.9 mmt in MY 2012/13. Projected World wheat
ending stocks in “new crop” MY 2014/15 of 189.5 mmt (27.0% S/U) are up from 184.3 mmt (26.1% S/U) in MY
2013/14, and from 175.6 mmt (25.9% S/U) in MY 2012/13.
For market perspective these levels of World wheat stocks need to be analyzed relative to the historic World
wheat stocks minimum of 129.4 mmt (21.0% S/U) in MY 2007/08. Year‐over‐year increases are projected for
wheat exports in “new crop” MY 2014/15 for Argentina (+4.5 mmt), Brazil (+0.4 mmt), and Russia (+1.0 mmt),
with decreases forecast for the U.S. (‐7.7 mmt), Australia (‐0.5 mmt), Canada (‐1.5 mmt), the EU (‐2.5 mmt),
India (‐2.4 mmt), Kazakhstan (‐2.4 mmt), and Ukraine (‐0.5 mmt). …
October 19, 2016
Grain Market Outlook
… prospects in 2017 could be a major factor impacting U.S. and World corn prices in the
coming spring and summer months of 2017.
China corn production in “new crop” MY 2016/17 (harvested in September‐October 2016) is estimated to be
216.0 mmt, down 8.6 mmt (down 3.8%) from 224.6 mmt in MY 2015/16, but marginally higher than 215.65
mmt in MY 2014/15. A major focus in World corn markets is on the size of Chinese ending stocks and on
recent changes in China’s domestic corn stock management policies. Ending stocks of corn in China are
projected to be 103.7 mmt (45.9% SU) in “new crop” MY 2016/17, down from 110.7 mmt (50.9% S/U) in “old
crop” MY 2015/16, but up from 100.5 mmt (49.7% S/U) in MY 2014/15. Over the last three marketing years,
percent ending stocks‐to‐use of corn for China ranging from 49.7% to 50.9% are the highest since MY 2002/03
(51.6%). During the interim MY 2003/04 to MY 2013/14 period, Chinese corn percent ending stocks‐to‐use
averaged 30.5%, ranging from 25.2% to 39.1%.
…
May 19, 2017
Grain Market Outlook
for sale through the winter into at least early‐spring and some into summer 2017. Second,
anticipation of continued strong use of 2016 crop U.S. corn for domestic U.S. ethanol production and livestock
feeding through spring‐summer 2017. Third, at least moderate continued strength in U.S. corn exports – at
least until what is forecast to be a sizable 2nd crop of corn from South America becomes available on global
markets during Summer 2017. And fourth, the always present possibility of broader U.S. and Foreign
economic and/or financial system disruptions that could impact grain, energy, and other commodity markets
in 2017. World geo‐political events have the potential to provide “shocks” to U.S. and World energy and grain
markets – with the impact on the direction of U.S. and World corn markets being difficult to anticipate
depending on which countries may be involved and their role in global corn export trade.
Page | 2
USDA Supply‐Demand & Price Forecast for “Next Crop” MY 2017/18
Early USDA projections are for 2017 U.S. corn plantings of 89.996 million acres or ‘ma’ (down 4.0 ma).
Harvested acres of approximately 82.4 ma (down 4.35 ma) are forecast, with projected yields of 170.7 bu/ac
(vs the record high of 174.6 in 2016), leading to a 2017 U.S. corn production is forecast of 14.065 bb – down
from the record high of 15.148 bb in 2016.
The USDA forecast “next crop” MY 2017/18 total supplies to be 16.410 bb – down 530 mb from last year’s
record high. Total use is forecast at 14.300 bb – down 345 mb from last year’s record high. Ending stocks are
projected to be 2.110 bb (14.76% S/U) – down from 2.295 bb (15.67% S/U) in “current” MY 2016/17. United
States’ corn prices are projected to average $3.40 /bu (range of $3.00‐$3.80). This equals the midpoint
estimate of $3.40 /bu from “current” MY 2016/17. This scenario is given a 45% likelihood of occurring by KSU
Extension Ag Economist D. O’Brien.
Alternative KSU Supply‐Demand & Price Forecast for “Next Crop” MY 2017/18
Three alternative KSU‐Scenarios for U.S. corn supply‐demand and prices are presented for “next crop” MY
2017/18. Each forecast scenario presents the likelihood of lower U.S. corn acreage, yields and production than
projected by the USDA in the May 10, 2017 WASDE report for “next crop” MY 2017/18.
KSU “Next Crop” MY 2017/18 Scenario #1) “167.3 bu/ac – 13.556 bb” Scenario (25% probability) assumes:
88.500 ma planted, 81.031 ma harvested, 167.3 bu/ac trend yield, 13.556 bb production, 15.901 bb total
supplies, 14.255 bb total use, 1.646 bb ending stocks, 11.55% S/U, & $3.95 /bu U.S. corn average price for
“next crop” MY 2017/18;
KSU “Next Crop” MY 2017/18 Scenario #2) “165.0 bu/ac – 13.370 bb” Scenario (15% probability) assumes:
88.500 ma planted, 81.031 ma harvested, 165.0 bu/ac yield, 13.370 bb production, 15.715 bb total supplies,
14.155 bb total use, 1.560 bb ending stocks, 11.02% S/U, & $4.10 /bu U.S. corn average price for “next crop”
MY 2017/18;
KSU “Next Crop” MY 2017/18 Scenario #3) “150.0 bu/ac – 12.155 bb” Scenario (5% probability) assumes:
88.500 ma planted, 80.535 ma harvested, 150.0 bu/ac yield, 12.080 bb production, 14.375 bb total supplies,
13.460 bb total use, 915 million bushels (mb) ending stocks, 6.80% S/U, & $6.00 /bu U.S. corn average price for
“next crop” MY 2017/18;
World Corn Supply‐Demand: World corn production of 1,033.7 million metric tons (mmt) is projected for
“next crop” MY 2017/18, down 3.0% from the record high of 1,065.1 mmt in “current” MY 2016/17, but still up
6.8% from 968.1 mmt in MY 2015/16. Near record World corn total supplies of 1,257.6 mmt are projected for
“next crop” MY 2017/18, down marginally from the record high of 1,278.1 mmt in “current” MY 2016/17, but
up from 1,177.5 mmt in MY 2015/16.
World corn exports of a near record 151.9 mmt are projected for “next crop” MY 2017/18, down 4.2% from
the record high of 158.6 mmt in MY 2015/16, and up 26.6% from 119.95 mmt in MY 2015/16. Projected World
corn ending stocks of 195.3 mmt (18.4% S/U) in “next crop” MY 2017/18 are down from the record high 223.9
mmt (21.3% S/U) in “current” MY 2016/17, and from 212.4 mmt (22.0% S/U) in MY 2015/16.
Strong World demand for corn at low prices is expected to continue – especially in the United States,
Argentina, Mexico, Southeast Asia, China, Ukraine, and other Former Soviet Union countries (less Ukraine).
An ongoing, strong demand base for corn could help cause sharply increased corn market volatility in the
summer of 2017 IF any serious threats emerge to the 2017 U.S. corn crop.
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I. U.S. Corn Market Situation and Outlook
May 10th USDA Crop Production & WASDE Reports
On May 10th the USDA World Agricultural Outlook Board (WAOB) released its May 2017 World
Agricultural Supply and Demand Estimates (WASDE) report – containing U.S. and World corn supply‐demand
and price projections for the 2015/16, “current” 2015/16, and “next crop” 2017/18 marketing years (MY) for
corn. The “next crop” MY 2017/18 for U.S. corn will begin on September 1, 2017 and will last through August
31, 2018. Earlier, on March 31st, the USDA National Agricultural Statistics Service (NASS)
(https://www.nass.usda.gov/) had released it’s Prospective Plantings (http://usda.mannlib.cornell.edu/usda/current/ProsPlan/ProsPlan‐
03‐31‐2017.pdf) and Grain Stocks (http://usda.mannlib.cornell.edu/usda/current/GraiStoc/GraiStoc‐03‐31‐2017.pdf) reports. Planted
acreage estimates from the Prospective Plantings report were used by the USDA WAOB to develop the May
10th projection of 2017 U.S. corn production in the WASDE report. The grain stocks estimates released on
March 31st were used to calculate U.S. corn livestock feed and residual usage in “current” MY 2016/17.
Following its normal procedures, the next supply‐demand and price forecasts for “next crop” 2017/18
from the USDA will be released in the June 9, 2017 USDA WASDE report.
CME JULY 2017 & DECEMBER 2017 Corn Futures Trends
JULY 2017 CME Corn Futures
Following a low of $3.40 ¼ on August 31, 2016, JULY 2017 Chicago Mercantile Exchange (CME) corn
futures prices trended up to a high of $3.81 ¾ on October 20, 2016 (Figure 1). Following that high, JULY 2017
corn futures prices declined to a low of $3.57 ¼ on December 1, 2016, before moving to an eventual high of
$3.93 ¾ on February 16, 2017. Since then, JULY 2017 corn futures traded in the range from lows $3.61 ¾ on
March 27th and $3.60 ¾ on April 21st to highs of $3.79 ¼ on April 3rd, $3.79 ¼ on April 13th, and $3.79 on May
1st, before closing at $3.71 ½ on May 17, 2017.
DECEMBER 2017 CME Corn Futures
In a similar trading pattern to JULY 2017 corn futures, following a low of $3.58 1/2 on August 31, 2016,
DECEMBER 2017 Chicago Mercantile Exchange (CME) corn futures prices trended up to a high of $3.95 ¼ on
October 20, 2016 (Figure 1). Following that high, DECEMBER 2017 corn futures prices declined to lows of
$3.74 ¼ on November 15th and $3.74 ½ on December 1, 2016, before moving to an eventual high of $4.03 ¾ on
February 16, 2017 and $4.04 on February 28th. Since then, DECEMBER 2017 corn futures traded in the range
from lows $3.78 ¼ on March 27th and $3.79 ¼ on April 21st to highs of $3.95 on April 3rd, $3.95 ¾ on April 13th,
and $3.95 ¾ on May 1st, before closing at $3.89 on May 17, 2017.
CME Corn Futures 2017 Contract Spreads
The total futures carrying charge or “term spread” between JULY 2017 and SEPTEMBER 2017 corn futures
on Wednesday, May 17th was $0.07 ¾ per bushel (i.e., $3.79 ¼ for SEPTEMBER 2017 Corn less $3.71 ½ for JULY
2017 Corn), or $0.03875 per bushel per month. This compares to commercial grain storage charges in Kansas
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grain elevators in the range of $0.04 to $0.05 per bushel per month – before accounting for interest or
additional handling costs or other discounts.
Figure 1. JULY 2017 & DECEMBER 2017 CME Daily Corn Futures Price Charts (as of May 17, 2017)
ne …
September 5, 2017
Grain Market Outlook
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 have a positive effect on U.S. corn exports and price prospects.
Fourth, a possibility exists of broader U.S. and Foreign economic and/or financial system disruptions that
could impact grain, energy, and other commodity markets in 2017‐2018. World geo‐political events could
provide “shocks” to U.S. and World energy and grain markets which could in turn impact grain prices in either
direction depending on the circumstances and the countries involved and their role in global corn export trade.
4. USDA Supply‐Demand & Price Forecast for “New Crop” MY 2017/18
With the USDA’s projection of 2017 U.S. corn plantings at 90.886 million acres or ‘ma’ (down 3.118 ma
from 2016), harvested acres of 83.496 ma (down 3.252 ma), and projected yields of 169.5 bu/ac (vs the record
high of 174.6 in 2016), 2017 U.S. corn production is forecast to be 14.153 bb – down from the record high of
15.148 bb in 2016.
The USDA forecast “new crop” MY 2017/18 total supplies to be 16.573 bb – down 367 mb from last year’s
record high. Total use is forecast at 14.300 bb – down 270 mb from last year’s record high. Ending stocks are
projected to be 2.273 bb (15.90% S/U) – down from 2.370 bb (16.27% S/U) in “old crop” MY 2016/17. United
States’ corn prices are projected to average $3.30 /bu (range of $2.90‐$3.70). This is down $0.05 /bu from the
midpoint estimate of $3.35 /bu from “old crop” MY 2016/17. This scenario is given a 50% likelihood of
occurring by KSU Extension Agricultural Economist D. O’Brien.
5. Alternative KSU Supply‐Demand & Price Forecast for “New crop” MY 2017/18
Four alternative KSU‐Scenarios for U.S. corn supply‐demand and prices are presented for “new crop” MY
2017/18. Each forecast scenario presents the likelihood of lower U.S. corn acreage, yields and production than
projected by the USDA in the August 10, 2017 WASDE report for “new crop” MY 2017/18.
A ‐ KSU “New crop” MY 2017/18 Scenario #1) “167.3 bu/ac – 13.815 bb” Scenario (35% probability) assumes:
89.886 ma planted, 82.577 ma harvested, 167.3 bu/ac trend yield, 13.815 bb production, 16.235 bb total
supplies, 14.245 bb total use, 1.990 bb ending stocks, 13.97% S/U, & $3.60 /bu U.S. corn average price for
“new crop” MY 2017/18;
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B ‐ KSU “New crop” MY 2017/18 Scenario #2) “164.0 bu/ac – 13.543 bb” Scenario (10% probability) assumes:
89.886 ma planted, 82.577 ma harvested, 164.0 bu/ac yield, 13.543 bb production, 15.963 bb total
supplies, 14.120 bb total use, 1.843 bb ending stocks, 13.05% S/U, & $3.75 /bu U.S. corn average price for
“new crop” MY 2017/18;
C ‐ KSU “New crop” MY 2017/18 Scenario #3) “160.0 bu/ac – 13.212 bb” Scenario (4% probability) assumes:
89.886 ma planted, 82.577 ma harvested, 160.0 bu/ac yield, 13.212 bb production, 15.632 bb total
supplies, 13.920 bb total use, 1.712 bb ending stocks, 12.30% S/U, & $3.85 /bu U.S. corn average price for
“new crop” MY 2017/18;
D ‐ KSU “New crop” MY 2017/18 “Wildcard” Scenario #4) “167.3 bu/ac – 13.815 bb” Scenario (1%
probability) assumes: 89.886 ma planted, 82.577 ma harvested, 167.3 bu/ac trend yield, 13.815 bb
production, 16.235 bb total supplies, 14.085 bb total use, 2.150 bb ending stocks, 15.26% S/U, & $3.45 /bu
U.S. corn average price for “new crop” MY 2017/18;
Note: even with significant reductions in 2017 U.S. corn production as represented in the KSU Scenarios A, B, C
and D above, the presence of large beginning stocks of 2.370 bb in “new crop” MY 2017/18 limit the
“tightness” of corn supply‐demand balances, and hinders any upward price responses.
5. World Corn Supply‐Demand – With & Without China
World corn production of 1,033.5 million metric tons (mmt) is projected for “new crop” MY 2017/18, down
1.7% from the record high of 1,070.5 mmt in “old crop” MY 2016/17, but still up 7.1% from 969.5 mmt in MY
2015/16. Near record World corn total supplies of 1,262.1 mmt are projected for “new crop” MY 2017/18,
down marginally from the record high of 1,284.0 mmt in “old crop” MY 2016/17, but up from 1,178.7 mmt in
MY 2015/16.
World corn exports of a 152.0 mmt are projected for “new crop” MY 2017/18, down 6.4% from the record
high of 162.4 mmt in “old crop” MY 2016/17, and up 27.1% from 119.6 mmt in MY 2015/16. Projected World
corn ending stocks of 200.9 mmt (18.9% S/U) in “new crop” MY 2017/18 are down from the record high 228.6
mmt (21.7% S/U) in “old crop” MY 2016/17, and from 213.5 mmt (22.1% S/U) in MY 2015/16.
An alternative view of the World corn supply‐demand is presented if Chinese corn usage and ending stocks
are isolated from the World market. “World Less China” corn ending stocks are projected to be 119.6 mmt
(14.5% S/U) in “new crop” MY 2017/18, down from 127.3 mmt (15.5% S/U) in “old crop” MY 2016/17, but up
from 102.7 mmt (13.7% S/U). These figures show that World stocks‐to‐use of corn less China’s direct influence
are projected to be down approximately 23% (i.e., 14.5% S/U for the “World Less China” versus 18.9% S/U for
the “World” overall in “new crop” MY 2017/18).
These figures also show that Chinese ending stocks of corn as proportion of the World overall is declining –
down from 51.9% in MY 2015/16 to 44.3% in “old crop” MY 2016/17, and down to 40.5% in “new crop” MY
2017/18. The deliberate actions taken by the Chinese government in recent years to reduce feedgrain
stockpiles is impacting the relative amount of corn stocks they hold in the World corn market.
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December 21, 2017
Grain Market Outlook
new crop” MY 2017/18 U.S. corn exports
because of a) low U.S. corn prices, b) expectations of significantly tighter foreign stocks and percent (%)
stocks‐to‐use for corn, and c) the eventual “using up” of competing South American corn exports in early 2018.
Early forecasts are for 2018 Brazilian corn production to be 95 million metric tons (mmt) in this marketing
year with harvests lasting from February through May. Early forecasts are for 2018 Argentina corn production
to be 42 mmt in this marketing year with harvests lasting from March through May. However, dry conditions
may limit 2018 corn production in Argentina and southern Brazil – and subsequently support U.S. corn exports.
Fourth, a continuing threat exists of U.S. and Foreign economic and/or financial system disruptions that
could impact grain, energy, and other commodity markets in 2018. World geo‐political events could provide
“shocks” to U.S. and World energy and grain markets which could in turn impact grain prices in either direction
depending on the circumstances, the countries involved, and their role in global corn export trade.
4. USDA Supply‐Demand & Price Forecast for “New Crop” MY 2017/18
In the December 12th Crop Production reports, the USDA left unchanged its projections of a) projected
yields up to a record high of 175.4 bu/ac (vs the previous record of 174.6 in 2016), and b) 2017 U.S. corn
production up to 14.578 bb – down from the record high of 15.148 bb in 2016. The also USDA left unchanged
its forecast “new crop” MY 2017/18 total supplies to 16.922 bb – down marginally (20 mb) from last year’s
record high. Total use is forecast at 14.485 bb – raised 50 mb from November on higher ethanol use, but still
down 162 mb from last year’s record high. Ending stocks are projected to be a 2.437 bb (16.8% S/U) – up from
2.295 bb (15.7% S/U) in “old crop” MY 2016/17. United States’ corn prices are projected to average $3.20 /bu
(range of $2.85‐$3.55). This is down $0.16 /bu from $3.36 /bu from “old crop” MY 2016/17. This scenario is
given an 80% likelihood of occurring by KSU Extension Agricultural Economist D. O’Brien.
5. Alternative KSU Supply‐Demand & Price Forecast for “New Crop” MY 2017/18
Two alternative KSU‐Scenarios for U.S. corn supply‐demand and prices are presented for “new crop” MY
2017/18. These projections are to show how varying corn export outcomes could affect the USDA’s projection
in the December 9, 2017 WASDE report.
A ‐ KSU “Higher Exports” MY 2017/18 Scenario: “2.250 bb Exports” Scenario (10% probability) assumes:
90.348 ma planted, 82.890 ma harvested, 175.4 bu/ac trend yield, 14.539 bb production, 16.884 bb total
supplies, 2.250 bb exports, 14.785 bb total use, 2.099 bb ending stocks, 14.20% S/U, & $3.55 /bu U.S. corn
average price;
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B ‐ KSU “Lower Exports” MY 2017/18 Scenario: “1.800 bb Exports” Scenario (10% probability) assumes:
90.348 ma planted, 82.890 ma harvested, 175.4 bu/ac trend yield, 14.539 bb production, 16.884 bb total
supplies, 1.800 bb exports, 14.360 bb total use, 2.524 bb ending stocks, 17.58% S/U, & $3.20 /bu U.S. corn
average price;
6. USDA Supply‐Demand & Price Forecast for “Next Crop” MY 2018/19
In the November 28th Long Term Baseline projections, the USDA forecast for “next crop” MY 2018/19 that
2018 U.S. corn planted and harvested acres would equal 91.0 million acres (ma) and 83.7 ma, respectively,
both up from 90.429 ma planted and 83.119 ma harvested in 2017. Corn yields in 2018 are forecast at 173.5
bu/ac, down from the record high of 175.4 bu/ac in 2017. U.S. corn production is 2018 is projected to be
14.520 bb – down from 14.578 bb now projected for 2017.
The USDA forecast “new crop” MY 2017/18 total supplies to 17.007 bb – adjusted for changes in the
December WASDE report in MY 2017/18 ending stocks. Total use is forecast at 14.450 bb – down 35 mb from
this current marketing year. Ending stocks are projected to be a 2.557 bb (17.7% S/U) – up from 2.437 bb
(16.8% S/U) in “new crop” MY 2017/18. United States’ corn prices are projected to average $3.30 /bu – up
from $3.20 /bu in “new crop” MY 2017/18.
5. World Corn Supply‐Demand – With & Without China
World corn production of 1,044.8 million metric tons (mmt) is projected for “new crop” MY 2017/18, down
2.9% from the record of 1,074.8 mmt in “old crop” MY 2016/17, but still up 7.3% from 973.5 mmt in MY
2015/16. World corn total supplies of 1,272.1 mmt are down marginally from the record high 1,290.5 mmt in
“old crop” MY 2016/17, but up from 1,183.2 mmt in MY 2015/16.
World corn exports of a 151.6 mmt are projected for “new crop” MY 2017/18, down 7.6% from the record
high of 164.1 mmt in “old crop” MY 2016/17, and up 26.7% from 119.7 mmt in MY 2015/16. Projected World
corn ending stocks of 204.1 mmt (19.1% S/U) in “new crop” MY 2017/18 are down from the record high 227.3
mmt (21.4% S/U) in “old crop” MY 2016/17, and from 214.9 mmt (22.2% S/U) in MY 2015/16. Projected
Foreign (Non‐U.S.) corn ending stocks of 142.2 mmt (16.5% S/U) in “new crop” MY 2017/18 are down from
169.0 mmt (19.8% S/U) in “old crop” MY 2016/17, and from 170.8 mmt (23.1% S/U) in MY 2015/16.
An alternative view of the World corn supply‐demand is presented if Chinese corn usage and ending stocks
are isolated from the World market. “World‐Less‐China” corn ending stocks are projected to be 124.5 mmt
(15.0% S/U) in “new crop” MY 2017/18, down from 126.6 mmt (15.2% S/U) in “old crop” MY 2016/17, but up
from 104.1 mmt (13.9% S/U) in MY 2015/16. These figures show that World stocks‐to‐use of corn less China’s
direct influence are projected to be approximately 21% lower (i.e., 15.0% S/U for the “World‐Less‐China”
versus 19.1% S/U for the “World” overall in “new crop” MY 2017/18).
At the same time, these figures also show that Chinese ending stocks of corn as proportion of the World
total are declining – down from 51.5% in MY 2015/16, to 44.3% in “old crop” MY 2016/17, and down to 39.0%
in “new crop” MY 2017/18. The deliberate actions in recent years ‐ taken by the Chinese government to
reduce feedgrain stockpiles – is impacting the relative amount of World total corn stocks they hold. These
actions may increase Chinese import demand for both U.S. corn and grain sorghum.
…