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March 25, 2019
Grain Market Outlook
Wheat Market Overview
Hard red winter wheat market prices in the U.S. have weakened considerably since late January
2019. Ongoing weakness in export shipments of U.S. wheat on the one hand, and declining prospects
for future U.S. wheat export sales on the other, have been the main causes along with general
bearishness across grain futures prices.
In Fall‐Winter 2018 prospects for short wheat crops among some major World wheat exporters
improved prospects for U.S. export sales in the later part of the “current” 2018/19 marketing year
(MY). “Current” MY 2018/19 began on 6/1/2018 and will finish on 5/31/2019. In particular, short
crops in the Black Sea Region countries of Russia, Ukraine and Kazakhstan, parts of the European
Union (France and other countries), and Australia were of concern.
However, a combination of #1) large carryover stocks in World markets from “old crop” MY
2017/18, #2) successful wheat crops in many other exporting and importing countries in the World,
and #3) the willingness of the Black Sea Region countries to sell down their domestic reserve stocks
to maintain their export market shares, worked together to limit any improvement in U.S. wheat
exports, and consequently limit any price gains from such an event.
The selling off of domestic inventories may have allowed Russia and other countries to have
maintained their export market shares in “current” MY 2018/19, but it makes them more vulnerable
to any repeated crop shortfalls that could occur in “new crop” MY 2019/20 – which will begin on June
1, 2019. The risk of tightening stocks is that these countries place themselves at risk to the effect of
market shortfalls in the future – because they have reduced their “buffer” stocks.
Going forward, it seems that wheat production risk in the major exporting countries – including
the United States, Russia, Ukraine, Australia, and the European Union – will be the key driving factor
in U.S. grain markets in year 2019. The possibility of rumored sizable increases in Chinese purchases
of U.S. wheat and other agricultural products IF a trade agreement between the U.S. and China is
completed could provide a surprise boost to U.S. wheat exports in coming months. But it seems
judicious to not count on that occurring until such a trade agreement is finalized.
B. Trends in CME Kansas Hard Red Winter Wheat Futures
Prices for the MAY 2019 Chicago Mercantile Exchange (CME) Kansas Hard Red Winter (HRW)
Wheat futures contract declined from a high of $5.23 per bushel (/bu) on January 25, 2019 to a low of
$4.18 ¼ /bu on March 12th, a drop of $1.04 ¼ or 20%. Since then, MAY 2019 CME HRW wheat has
moved higher to a close of $4.45 on March 22nd – down 15% from late‐Jan. 2019 highs (Figures 1‐2‐
3abc).
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Currently CME MAY 2019 Kansas HRW Wheat futures are trading near historic lows since the
beginning of year 2007. Prices for MAY 2019 futures in the $4.40‐$4.50 range compare to longter
term lows of: a) $4.33 /bu for the MAY 2007 contract on 4/2/2007; b) $3.98 ¾ /bu for MAY 2017 on
4/21/2019; and $4.04 /bu for DEC 2017 on 11/28/2018. IF crop conditions and crop progress for the
2019 U.S. HRW Wheat crop are “good” in April 2019 it is possible that prices could AGAIN decline to
$4.00 /bu or less (Figures 1‐2).
It is notable that a record large net short (or sell) position is held by Management Money
(Speculator) traders in CME HRW wheat according to the most recent March 19th Commodity Futures
Trading Commission (CFTC) Commitment of Traders Report (Figures 3abc). Actual short (sell)
positions held by Management Money (Spec) traders are near record levels, combined with declining
long positions on these contracts. This report can be found at the following web address:
https://www.cftc.gov/MarketReports/CommitmentsofTraders/index.htm
Taken together, these data indicate a predominant “bearishness” among Management Money
(Spec) traders in the CME Kansas HRW Wheat futures contract. This consensus “bearish market
narrative” or “pessimistic group mindset” would have to be overcome or changed by some
combination of World and U.S. wheat supply‐demand factors in the wheat market for CME futures to
begin to move appreciably higher. The key issue to watch in these markets will likely be whether
there continue to be successful aggregate crop production prospects among major World wheat
producing, exporting, and importing countries throughout calendar year 2019.
C. Kansas HRW Wheat Cash Price & Basis Levels
In central Kansas on March 22nd – the 10th trading day a full two weeks after the USDA reports –
Kansas cash wheat price terminal quotes for ordinary U.S. no. 1 HRW ranged from $4.19 to $4.55 per
bushel – with basis ranging from $0.26 under to $0.10 over MAY 2019 KS HRW Wheat futures. Cash
wheat prices in eastern Kansas grain terminals ranged from $4.30 to $4.50 /bu with basis ranging
from $0.15 under to $0.05 over MAY 2019 futures. These prices are still up 19% to 22% from the
range of $3.42 ¼ to $3.83 ¼ /bu in late December 2017 in eastern and central Kansas – with basis at
that time being from $0.80 under to $0.39 under nearby MARCH 2018 futures (Figure 2).
In comparison, in western Kansas on March 22nd, bids for ordinary U.S. no. 1 HRW wheat at
selected grain elevators ranged from $3.92 to $4.19 /bu, with basis being $0.55 under to $0.28 under
MAY 2019 futures. Recent wheat cash price bids in western Kansas are up 13% to 15% from $3.47 to
$3.64 /bu in late December 2017 in this same area – when local basis varied from $0.85 under to
$0.58 under MARCH 2018 futures.
A Hard White Wheat (HWW) grain terminal bid was available in Wichita, Kansas on 3/22/2019
for $4.4000 /bu, with a basis of $0.05 /bu under MAY 2019 Kansas HRW wheat futures.
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D. World Wheat Production
In aggregate, forecast global World wheat production in “current” MY 2018/19 of 733.00 mmt is
down 3.9% from last year’s record high of 763.07 mmt. Lower production has occurred in the
“current” 2018/19 marketing year (which began June 1, 2018) in some major exporting countries
such as Australia (down 18.8% to 17.30 million metric tons or ‘mmt’ from a year ago) and the
European Union (down 9.0% in total to 137.60 mmt). In the Black Sea Region, wheat production is
down in Russia (down 15.6% to 71.69 mmt), Ukraine (down 7.3% to 25.00 mmt), and Kazakhstan
(down 5.5% to 13.95 mmt) (Figures 13, 14a‐b & 15a‐b).
These declines were partially offset by production increases projected for exporters such as the
United States (up 8.3% to 51.29 mmt or 1.884 billion bushels, i.e., ‘bb’), Argentina (up 5.4% to 19.5
mmt), and Canada (up 6.1% to 31.80 mmb). Production in China is projected to be down 2.2% to
134.43 mmt, while India wheat production is forecast to be up 1.2% to 99.70 mmt.
E. World Wheat Ending Stocks & % Stocks‐to‐Use
Record large carryover ending stocks of 279.61 mmt (37.56% stocks‐to‐use) from “old crop” MY
2017/18 have upheld total World supplies and supply‐demand balances – which are projected to be
270.53 mmt (36.45% stocks‐to‐use) in “current” MY 2018/19. Percent ending stocks‐to‐use of
37.56% in “old crop” MY 2017/18 were record high in the modern era since the early 1970s, while
34.46% stocks/use in “current” MY 2018/19 are the 2nd highest since the farm crisis years of the mid‐
1980s, and the 4th highest in the modern era (Figures 13, 14a‐b & 15a‐b).
In response to lower production, Russia has chosen to “sell down” it’s carryover wheat stocks to
maintain market position in global trade. Russia wheat ending stocks are projected to be 6.55 mmt in
“current” MY 2018/19, down from 11.87 mmt in “old crop” MY 2017/18, and from 10.83 mmt in MY
2016/17. In the short run this strategy of “mining” of carryover stocks by Russia DOES allow it to
maintain World export market share in “current” MY 2018/19. HOWEVER, this strategy ALSO may
leave future Russian supply‐demand balances more vulnerable to any domestic crop shortfall that
may occur in “new crop” MY 2019/20 and succeeding years.
F. “World‐Less‐China” Wheat Ending Stocks & % Stocks‐to‐Use
Considering World wheat ending stocks adjusted for Chinese reserves (i.e., “World‐Less‐China”)
provides a much tighter picture of “accessible” or “available” World wheat supply‐demand balances
than the aggregate “World” measure. “World‐Less‐China” wheat carryover ending stocks are
calculated to be 130.53 mmt in “current” MY 2018/19 – down from 148.35 mmt in “old crop” MY
2017/18. These figures compare to World ending stocks of 270.61 mmt in “current” MY 2018/19,
and 249.61 mmt in “old crop” MY 2017/18 (Figure 15ab).
“World‐Less‐China” percent (%) ending stocks‐to‐use are estimated to be and 11 year low of
21.15% in “current” MY 2018/19 – down from 23.80% in “old crop” MY 2017/18. This compares to
aggregate World Stocks‐to‐Use of 36.45% in “current” MY 2017/18, and 37.56% in “old crop” MY
20017/18.
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This “tightness” in “World‐Less‐China” wheat stocks along with tighter exportable supplies in the
European Union and the Black Sea region appear to have provided quiet support to World wheat
market prices, but has not as of yet caused any major rallies.
G. 2019 U.S. Winter Wheat Conditions
Prospects for the 2019 U.S. winter wheat crop are mostly “Fair to Good” at this time in the
southern and central plains region of the country. Reports from the USDA National Agricultural
Statistics Service (NASS) in Kansas for the week ending March 17, 2019 indicated that a survey of
observers in the state of winter wheat acreage rated the crop as 5% “excellent”, 44% “good”, 40%
“fair”, 8% “poor”, and 3% “very poor”. In Oklahoma, the HRW wheat crop was rated as 5%
“excellent”, 55% “good”, 35% “fair”, 5% “poor”, and 0% “very poor”. Similarly, in Texas, the HRW
wheat crop was rated as 6% “excellent”, 27% “good”, 44% “fair”, 17% “poor”, and 6% “very poor”.
As the 2019 hard red winter wheat crop breaks dormancy and begins spring growth in late March‐
early April, the condition in which the crop survived somewhat challenging winter conditions will
become apparent. The USDA’s National Agricultural Statistics Service (NASS) Crop Production
reports first and preliminarily on April 9th, and then especially as the crop is more developed on May
10th, June 11th and July 11th will provide more substantiated information on 2019 U.S. HRW Wheat
production prospects.
H. U.S. Wheat Exports
Export shipments of U.S. wheat have been running behind the pace needed to meet USDA export
projections for U.S. Wheat overall, and for Hard Red Winter (HRW) wheat in particular. According to
USDA Foreign Agricultural Service (FAS) data, through March 14th forward sales of U.S. exports are
still on track to meet USDA forecasts of 965 million bushels (mb) in the “current” 2018/19 marketing
year (MY) – ending on May 31, 2019 (Tables 1‐1a, Figures 9ab‐10ab).
Total shipments to date plus forward sales are projected to have reached 88.1% (850.4 mb) of the
USDA’s forecast on March 14th with 78.8% of the marketing year completed (i.e., 41/52 weeks).
However, actual physical shipments to date of 638.4 mb amount to only 66.1% of the USDA forecast,
with a shipment rate of 29.7 mb per week needed through the end of “current” MY 2018/19 to meet
the USDA target of 965 mb. For the weeks of March 7th and 14th, U.S. Wheat shipments of 27.3 mb
and 13.1 mb were behind the weekly average of 29.7 mb needed to meet the USDA’s projections by
May 31, 2019. Shipments of U.S. HRW Wheat are in a similar situation, as strong weekly shipments
are still needed through August 31st to attain the USDA U.S. export projection of 320 mb in “current”
MY 2018/19.
I. U.S. Wheat Supply‐Demand & Prices
The USDA released their wheat production, supply‐demand, and price projections for the U.S. for
“current” MY 2018/19 in the March 8th WASDE (World Agricultural Supply and Demand Estimates
report) (Tables 1‐1a). The USDA also released its preliminary projections for the “new crop” MY
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2019/20 at it’s February 22nd Agricultural Outlook Conference (Table 1a). The “new crop” 2019/18
marketing year for wheat represents the June 1, 2019 through March 31, 2020 period. These
preliminary forecasts indicate USDA’s expectations of 1%‐2% lower planted acreage in 2019,
approximately 1% higher production and total use in “new crop” MY 2019/20, and marginally higher
prices.
U.S. Wheat Acreage
U.S. wheat plantings are forecast to be 47.000 million acres (ma) in 2019, down 1.67% from
47.800 million acres (ma) in 2018, up from the record low of 46.052 ma in 2017, but down from
50.119 ma in 2016 (Tables 1‐1a, Figures 5‐6). Harvested acres are forecast at 39.800 ma in 2019
(84.68% harvested‐to‐planted). This amount of harvested acres is projected to be up 0.5% from
39.605 ma in 2018 (82.86% harvested‐to‐planted), and the record low of 37.555 ma (81.55%
harvested‐to‐planted) in 2017, but still down from 43.848 ma in 2016 (87.49% harvested‐to‐planted)
(Tables 1a‐b, Figure 6). The 2019 U.S. average wheat yield is forecast to be 47.8 bu/ac, up from 47.6
bu/ac in 2018, and 46.4 bu/ac in 2017, but down from the 2016 record high of 52.7 bu/acre (Tables
1a‐b, Figure 7).
The USDA’s Prospective Plantings report will be released by the USDA on Friday, March 29, 2019.
Average pre‐report projections of U.S. total wheat for 2019 seedings total 46.9 million acres (ma),
with estimates ranging from 45.9 to 48.0 ma. Preliminary estimates of 2019 winter wheat seedings
(average = 31.5 ma, 30.6 – 32.5 ma range), spring wheat (average = 13.4 ma, 12.3 – 13.9 ma range),
and durum acreage (average 2.0 ma, 1.6 – 2.3 ma range).
In its Winter Wheat and Canola Seedings report on January, 11, 2019, the USDA projected that
31,290,000 acres of Hard Red Winter (HRW) wheat were seeded in the U.S. in fall 2018 – down from
32,535,000 acres in fall 2017, and 32,726,000 acres in fall 2016 (Figure 6). The upcoming March 29th
Prospective Plantings report will provide more information on HRW wheat seedings, as well as for
soft red winter (SRW), hard red spring (HRS) wheat, and white wheat (WW) varieties.
U.S. Wheat Production & Total Supplies
Wheat production in the U.S. in 2019 is forecast to be 1.902 billion bushels (bb), up from 1.884 bb
in 2018, and up from 1.741 bb in 2017, but down from 2.309 bb in 2016 (Tables 1a‐b, Figure 8).
Projected “new crop” MY 2019/20 total supplies are forecast to be 3.097 bb, down from forecast
“current” MY 2018/19 total supplies of 3.128 bb, and up from 3.079 bb in “old crop” MY 2017/18.
However, 3.097 bb in U.S. total wheat supplies in “new crop” MY 2019/20 would be down from 3.402
bb in MY 2016/17.
U.S. Wheat Total Use
U.S. Wheat total use is projected to by 2.108 bb in “new crop” MY 2019/20, up from a projection
of 2.073 bb in “current” MY 2018/19, and from 1.980 bb in “old crop” MY 2017/18, but down from
2.222 bb in MY 2016/17 (Tables 1a‐b, Figures 9a‐b).
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U.S. Exports
In “new crop” MY 2019/20, U.S. wheat exports are forecast to be 975 million bushels (bu), up
from 965 mb in “current” MY 2018/19, and up from 901 mb in “old crop” MY 2017/18, while being
down from 1.051 bb in MY 2016/17 (Tables 1‐1a, Figures 9a‐b, & 10a).
CommentaryKSU: U.S. wheat exports fell to 47‐year lows of 778 mb and 864 mb in MY 2015/16
and MY 2014/15, respectively, down to levels just marginally above those pre‐“Russian Grain Deal”
levels in 1972. This is more evidence of the only marginally competitive position that U.S. wheat
exports find themselves in among foreign export competitors in recent years.
U.S. Food Use
Food Use of U.S. wheat is projected to be 980 million bushels (mb) in “new crop” MY 2019/20, up
marginally from 965 mb in “current” MY 2018/19, from 964 mb in “old crop” MY 2017/18, and 949
mb in MY 2016/17 (Table 1‐1a, Figure 9ab).
U.S. Feed & Residual Use
Feed & Residual Use of U.S. wheat is projected to be 90 mb in “new crop” MY 2019/20, up from
80 mb in “current” MY 2018/19, up from 51 mb in “old crop” MY 2017/18, but less than 160 mb in
MY 2016/17 (Table 1‐1a, Figure 9ab).
CommentaryKSU: With the USDA’s forecast of moderately tighter U.S. corn and total feedgrain
supplies along with moderate support for feedgrain prices, they are anticipating that feeding wheat to
livestock will become more marginally more economical in “new crop” MY 2019/20 than in the current
marking year.
U.S. Ending Stocks & % Stocks‐to‐Use
With an adjustment by KSU for new WASDE report information, USDA projected “new crop” MY
2019/20 ending stocks to be 989 mb (46.92% S/U). This projection is down from “current” MY
2018/19 ending stocks of 1.055 bb (50.89% S/U), both of which are down from 1.099 bb in “old crop”
MY 2017/18 (55.50% S/U), and from 1.181 bb in MY 2016/17 (53.14% stocks/use) (Tables 1‐1a,
Figures 11 & 12).
CommentaryKSU: This projection of 989 mb in U.S. wheat ending stocks in “new crop” MY 2019/20
is the lowest in four (4) years – since 976 mb (49.99% stocks/use) in MY 2015/16. However, it remains
that until either a major wheat production shortfall or what could be an “anticipated” surge in U.S.
wheat exports occurs, the U.S. will likely remain in the current “large supply – large ending stocks”
situation.
U.S. Wheat Prices
United States’ wheat prices are projected to be $5.20 /bu in “new crop” MY 2019/20, up from the
midpoint of $5.15 /bu in the range of $5.10‐$5.20 /bu in “current” MY 2018/19. This would be up
from $4.72 /bu in “old crop” MY 2017/18, from $3.89 in MY 2016/17, and $4.89 /bu in MY 2015/16,
but still down from $5.99 /bu in MY 2014/15 (Tables 1‐1a, Figures 11 & 12).
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J. “Alt” KSU Scenario for U.S. Wheat S/D in “New Crop” MY 2019/20
To represent possible alternative outcomes from the USDA’s March 8th WASDE and February 22nd
Agricultural Profitability Conference projections. One potential KSU‐Scenario for U.S. wheat supply‐
demand and prices is presented in comparison to the USDA forecast for “new crop” MY 2019/20
(Tables 1‐1a & Figure 11).
USDA Scenario (50% probability): This scenario assumes:
2019 U.S. Planted Acres …
September 22, 2016
Grain Market Outlook
… high), and projected ending stocks of 2.384 bb (16.47% S/U) – up from 1.716 bb (12.54% S/U) in “old crop” MY
2015/16 and the highest since 4.259 bb (54.90% S/U) in MY 2004/05 – U.S. corn prices are projected by the
USDA to be in the range of $2.90‐$3.50 (midpoint = $3.20 /bu) – being down from $3.60 /bu for “old crop” MY
2015/16. This scenario is given a 50% likelihood of occurring by KSU Extension Ag Economist D. O’Brien.
KSU Forecasts for “New Crop” MY 2016/17: Three alternative KSU‐Scenarios for U.S. corn supply‐demand and
prices are presented for “new crop” MY 2016/17, with each assuming a lower U.S. corn yields and production
than the September 12th USDA WASDE report.
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KSU Scenario A) “Minor Crop Problems – 14.9 bb” Scenario (30% probability) assumes: 94.148 ma planted,
86.550 ma harvested, 172.0 bu/ac yield, 14.887 bb production, 16.653 bb total supplies, 14.450 bb total use,
2.203 bb ending stocks, 15.25% S/U, & $3.35 /bu U.S. corn average price for “new crop” MY 2016/17;
KSU Scenario B) “Moderate Crop Problems – 14.5 bb” Scenario (35% probability) assumes: 94.148 ma
planted, 86.550 ma harvested, 168.0 bu/ac yield, 14.540 bb production, 16.306 bb total supplies, 14.344 bb
total use, 1.962 bb ending stocks, 13.68% S/U, & $3.50 /bu U.S. corn avg. price for “new crop” MY 2016/17;
KSU Scenario C) “More Serious Crop Problems – 14.2 bb” Scenario (10% probability) assumes: 94.148 ma
planted, 86.550 ma harvested, 164.0 bu/ac yield, 14.194 bb production, 15.190 bb total supplies, 14.239 bb
total use, 1.721 bb ending stocks, 12.09% S/U, & $3.80 /bu U.S. corn avg. price for “new crop” MY 2016/17;
World Corn Supply‐Demand: World corn production of 1,026.6 million metric tons (mmt) is projected for “new
crop” MY 2016/17, up from 959.0 mmt in “old crop” MY 2015/16, and up from 1,013.6 mmt in MY 2014/15.
World corn total supplies of 1,235.9 mmt are projected for “new crop” MY 2016/17, up from 1,167.3 mmt in
“old crop” MY 2015/16, and up from 1,188.9 mmt in MY 2014/15. World corn exports of 139.8 mmt are
projected for “new crop” MY 2016/17, up from 119.2 mmt in “old crop” MY 2015/16, but down from 141.7
mmt in MY 2014/15. Projected World corn ending stocks of 219.5 mmt (21.6% S/U) in “new crop” MY 2016/17
are up from 209.25 mmt (21.8% S/U) in “old crop” MY 2015/16, and from 208.3 mmt (21.2% S/U) in MY
2014/15.
Brazil corn production in “old crop” MY 2015/16 (1st crop harvested in January‐May 2016, 2nd crop harvested
in May‐August) is estimated to be 67.0 mmt, down 18.0 mmt (down 21.2%) from 85.0 mmt in MY 2014/15.
This shortfall in Brazilian corn production in 2016 has provided some support for U.S. corn exports and even
ethanol production (via exports). But expectations of a record large 2016 U.S. corn crop have had a
predominant negative impact on U.S. corn market prices to date. Brazilian corn production is forecast by the
USDA to rebound back to 82.5 mmt in MY 2016/17 (2017 production).
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. Most of the focus in World corn markets is on Chinese ending stocks. Ending stocks of
corn in China are projected to be 103.65 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 110.5 mmt (49.7% S/U) in MY 2014/15.
…
December 31, 2016
Grain Market Outlook
zilian feedgrain harvest and lack of exportable supplies in earlier in 2016, as well as other World
coarse grain market factors, and 4) the always present possibility of broader 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. grain sorghum exports. Also, World geo‐political events could provide
…
March 2, 2017
Grain Market Outlook
ding
through spring‐summer 2017. Third, at least moderate continued strength in U.S. corn exports – driven partly
by the availability of exportable corn supplies from South America through spring 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 could provide an
unanticipated “shock” 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.
USDA Supply‐Demand Forecast for “Next Crop” MY 2017/18. With early USDA projections of 2017 U.S. corn
plantings of 90.000 million acres or ‘ma’ (down 4.004 ma), harvested acres of 82.400 ma (down 4.348 ma),
projected yields of 170.7 bu/ac (vs the record high of 174.6 in 2016), 2017 U.S. corn production is forecast to
be 14.065 bb – down from the record high of 15.148 bb in 2016.
The USDA forecast “next crop” MY 2017/18 total supplies of 16.435 bb – down 505 mb from last year’s record
high). Total use is forecast at 14.220 bb – down 400 mb from last year’s record high. Ending stocks are
projected to be 2.215 bb (15.58% S/U) – down from 2.320 bb (15.87% S/U) in “current” MY 2016/17. United
States’ corn prices are projected by the USDA to average $3.50 /bu – up from a midpoint estimate of $3.40 /bu
from a year ago – but within the range of $3.20‐$3.60 /bu for “current” MY 2016/17. This scenario is given a
55% likelihood of occurring by KSU Extension Ag Economist D. O’Brien.
Alternative KSU Forecasts 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
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of alternative, lower U.S. corn yields and production than projected by the USDA in the February 23‐24, 2017
Agricultural Outlook Forum for “next crop” MY 2017/18.
KSU “Next Crop” MY 2017/18 Scenario #1) “167.3 bu/ac – 13.786 bb” Scenario (25% probability) assumes:
90.000 ma planted, 82.400 ma harvested, 167.3 bu/ac trend yield, 13.786 bb production, 16.156 bb total
supplies, 14.185 bb total use, 1.971 bb ending stocks, 13.89% S/U, & $3.65 /bu U.S. corn average price for
“next crop” MY 2017/18;
KSU “Next Crop” MY 2017/18 Scenario #2) “165.0 bu/ac – 13.596 bb” Scenario (15% probability) assumes:
90.000 ma planted, 82.400 ma harvested, 165.0 bu/ac yield, 13.596 bb production, 15.966 bb total supplies,
14.080 bb total use, 1.886 bb ending stocks, 13.39% S/U, & $3.70 /bu U.S. corn average price for “next crop”
MY 2017/18;
KSU “Next Crop” MY 2017/18 Scenario #3) “150.0 bu/ac – 12.360 bb” Scenario (5% probability) assumes:
90.000 ma planted, 82.300 ma harvested, 150.0 bu/ac yield, 12.3605 bb production, 14.680 bb total supplies,
13.460 bb total use, 1.220 bb ending stocks, 8.92% S/U, & $4.55 /bu U.S. corn average price for “next crop” MY
2017/18;
World Corn Supply‐Demand: Record high World corn production of 1,040.2 million metric tons (mmt) is
projected for “current” MY 2016/17, up 8.3% from 960.7 mmt in MY 2015/16, and up 2.4% from 1,015.6 mmt
in MY 2014/15. Record high World corn total supplies of 1,250.6 mmt are projected for “current” MY 2016/17,
up from 1,170.5 mmt in MY 2015/16, and from 1,190.3 mmt in MY 2014/15.
World corn exports of 149.0 mmt are projected for “current” MY 2016/17, up 23.0% from 121.1 mmt in MY
2015/16, and up 4.8% from 142.2 mmt in MY 2014/15. Projected record high World corn ending stocks of
217.6 mmt (21.1% S/U) in “new crop” MY 2016/17 are up from 210.4 mmt (21.9% S/U) in MY 2015/16, and
from 209.8 mmt (21.4% S/U) in MY 2014/15.
Although World corn ending stocks are projected to be a record high in “current” MY 2016/17 at 217.6 mmt,
World corn percent ending stocks‐to‐use are forecast to actually decline marginally to 21.1%. 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). Ongoing, strong
demand could cause sharply increased corn market volatility in the summer of 2017 IF any threats to the 2017
U.S. crop emerge.
…
October 20, 2016
Grain Market Outlook
Harvested of Planted
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The USDA forecast U.S. wheat yield of 52.6 bu/ac in 2016 is up from 43.6 bu/ac in 2015, and 43.7 bu/ac in
2014, greater than the previous record high of 47.1 bu/ac in 2013, and the 2nd highest yield previously on
record of 46.2 bu/ac in 2012 (Table 1 and Figure 6). KSU estimates of 2016 U.S. wheat yields are unchanged
from those of the USDA.
An early pair of KSU projections for 2017 U.S. Wheat Yields include
a) a 65% probability of a trend line U.S. wheat yield in 2017 of 47.0 bu/ac, and
b) a 35% probability of a lower U.S. wheat yield in 2017 of 43.6 bu/ac – essentially equal to U.S. wheat
yields in 2014 (43.7 bu/ac) and 2015 (43.6 bu/ac).
Figure 6. U.S. All Wheat Yield (1973‐2016) and KSU 2017 Trend Yield Projection as of the October 12,
2016 Crop Production Report
U.S. Wheat Production: The USDA forecast in its October 12th Crop Production report that – based on its
estimates of 2016 planted acreage (50.154 ma), harvested acreage (43.890 ma), and yield (52.6 bu/ac) – that
2016 U.S. wheat production to be 2,309,675,000 bushels, or 2.310 billion bushels (bb) (Table 1 and Figure 7).
This USDA forecast of 2.310 bb for 2016 is up from 2.062 bb in 2015 (up 10 mb from the September Crop
Production report), and 2.026 bb in 2014, and within the 2004‐2013 range of 1.808‐2.512 bb (average = 2.128
bb, median = 2.135 bb). KSU estimates of 2016 U.S. wheat production are unchanged from those of the USDA.
An early pair of KSU projections for 2017 U.S. Wheat Production include the following (Table 1):
a) a 65% probability of a combination of 5.0% lower planted and lower harvested acres, and a 2017
trend line yield of 47.0 bu/ac – with 2017 U.S. wheat production of 2.063 bb
b) a 35% probability of a combination of 5.0% lower planted and lower harvested acres, and a lower
yield in 2017 of 43.6 bu/ac – with 2017 U.S. wheat production of 1.914 bb
U.S. Winter Wheat Production: In its October 12th NASS Crop Production report the USDA projected 2016
U.S. winter wheat production to be 1.672 bb – up 296.8 million bushels (mb) (+21.6%) from 1.375 bb in 2015,
and up from 1.377 bb in 2014, 1.543 bb in 2013, and 1.631 bb in 2012. Also, 2016 U.S. Hard Red Winter
wheat production is forecast to be 1.082 bb in 2016, up 30.25% from 830 mb in 2015, up 46.4% from 739 mb
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May 22, 2017
Grain Market Outlook
Durum Wheat down 3.0%
2017 All U.S. Wheat down 8.2%
Page | 8
(seeded in fall 2016 for harvest in 2017) were down from 3.390 ma (‐9.4%) to 36.137 ma in 2016, down 6.934
ma (‐17.5%) from 39.681 ma in 2015, down 9.662 ma (‐22.8%) from 42.409 ma in 2014, and down 10.483 ma (‐
24.25%) from 43.230 ma in 2013.
Of this total amount of 2017 U.S. Winter Wheat planted acres, Hard Red Winter wheat planted acres are
estimated to be 23.8 ma in 2017, down 22.0% from 26.59 ma in 2016, 29.17 ma in 2015, and 30.50 ma in 2014.
Soft Red Winter wheat planted acres are projected to be 5.53 ma in 2017, down 8.1% from 6.02 ma in 2016,
down from 7.09 ma in 2015, and from 8.48 ma in 2014. White Winter wheat planted acres are projected to be
3.38 ma in 2017, down from 3.53 ma in 2016, up from 3.194 ma in 2015, and down from 3.427 ma in 2014.
U.S. “Other Spring Wheat” Planted Acres: The USDA has estimated 2017 U.S. “other spring wheat”
planted area to be 11.308 ma. This amount of 2017 U.S. “other spring wheat” planted acres would be down
297,000 acres (‐2.6%) from 11.605 ma in 2016, down 2.059 ma (‐15.4%) from 13.367 ma in 2015, down 13.2%
from 13.025 ma in 2014, down 2.6% from 11.606 ma in 2013, but down 7.8% from 12.259 ma in 2012 (Table 1
and Figures 4 and 5). Of these acres, 10.6 ma were projected to be seeded to Hard Red Spring Wheat in 2017,
down from 10.95 ma in 2016, 12.621 ma in 2015, 12.247 ma in 2013, and from 10.942 ma in 2012.
U.S. Durum Wheat Planted Acres: The USDA forecast 2017 durum wheat planted area to be 2.004 ma,
down 408,000 acres (‐16.9%) from 2.412 ma in 2016, but up 2.7% from 1.951 ma in 2015, up 42.4% from 1.407
ma in 2014, and up 43.1% from 1.400 ma in 2013 (Table 1 and Figures 4 and 5).
U.S. Wheat Harvested Acreage
In the May 10, 2017 WASDE report, the USDA projected that the percent (%) harvested‐to‐planted
acreage for U.S. wheat in 2017 would be 83.59%. Assuming this same USDA proportion of also projected that
2017 U.S. total wheat harvested acres would 38.500 million acres (ma), down 5.390 ma (‐12.3%) from 43.890
million acres (ma) in 2016, down 8.818 ma (‐18.6%) from 47.318 ma in 2015, down 17.0% from 46.385 ma in
2014, and down 15.1% from 45.332 ma in 2013 (Table 1 and Figure 5). This USDA projection is given a 50%
probability of occurring by KSU (KSU Extension Ag Economist Daniel O’Brien).
Figure 5. U.S. All Wheat Planted & Harvested Acreage (1973‐2016) with 2017 USDA Estimate as of the
May 10, 2017 USDA Crop Production report with KSU Estimate of Planted Acres
63.6 …
January 1, 2010
Research Papers and Presentations
random due to uncontrollable events (e.g., weather).2
Aggregation … land.
2 A 5-year average (2004-2008) was also examined as … 2006-08), and 5-year average (2004-08). The number of farms …
January 1, 2010
Production Publications
random due to uncontrollable events (e.g., weather).2
Aggregation … land.
2 A 5-year average (2004-2008) was also examined as … 2006-08), and 5-year average (2004-08). The number of farms …
May 2, 2017
Grain Market Outlook
… U.S. Corn Acreage, Yield & Production
Table 1 shows the USDA U.S. corn supply‐demand balance sheet for the MY 2008/09 through “current” MY
2016/17 period, with a preliminary USDA projection for “next crop” MY 2017/18. Table 1a focuses on “next
crop” MY 2017/18 with the preliminary USDA projection for plus alternative possible market scenarios from
Kansas State University. United States’ corn harvested and planted acreage for the year 2000 – projected 2017
period are shown in Figure 4, with U.S. corn yields for 1990‐2017 shown in Figure 5. United States’ corn
production & total supplies for the 2004/05 through projected “next crop” 2017/18 marketing years are shown
in Figure 6. Table 1 and Figures 4‐6 illustrate the growth in U.S. corn production and total supplies since the
drought‐impacted short crop year of MY 2012/13, and the most recent forecast by the USDA of a moderate
decline in U.S. corn supplies in “next crop” MY 2017/18.
U.S. Planted Acres
In the March 31, 2017 Prospective Plantings report the USDA projected 2017 U.S. corn planted acres to be
89.996 million acres or ‘ma’ – which would be the second lowest amount since MY 2011/12. This projection of
89.996 ma for 2017 is down 4.008 ma (down 4.3%) from 94.004 ma of 2016, while still being up from 88.019
ma in 2015, but down from 90.597 ma in 2014, 95.365 ma in 2013, the record high of 97.291 ma in 2012, and
91.936 ma in 2011 (Table 1 and Figure 4).
U.S. Harvested Acres
In its February 23‐24, 2017 Agricultural Outlook Forum, the USDA projected that 2017 U.S. corn harvested
acres will be 91.56% of planted acres. Applying the same proportion of U.S. harvested‐to‐planted acres to the
USDA’s projection of 89.996 million acres (ma) planted would equate to 82.396 ma – also the second lowest
amount of U.S. corn harvested acres since MY 2011/12. This early projection of 82.396 ma in 2017 is down
4.352 ma (down 5.0%) from 86.748 ma in 2016, up from 80.753 ma in 2015, while being down from 83.136 ma
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