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October 1, 2015
USDA METSS Project
1)
where S is the nominal exchange rate, P is the U.S. price level and P* is the price level in the country of
interest, say Ghana. When the real exchange rate is appreciating, it means the U.S. price of the bundle
3
of goods in the basket is increasing relative to the Ghanaian price. Now, when the real exchange rates
appreciates, then the real value of the dollar has depreciated, suggesting a decline in its purchasing
power, relatively speaking.
To get to know how Q affects the poverty level, it is necessary to try to understand the factors that
influence changes in Q. The real exchange rate between the currencies of the two countries may
change when there is a change in the relative demand for U.S. goods as a result of preference shift,
leading to total expenditure on U.S. goods increasing. The shift may arise from two principal sources.
An increase in global private and public demand for U.S. goods is one source of such shifts. This shift is
exacerbated when the relative increase in demand for U.S. goods is much higher than the increase in
demand for Ghana goods. In an increasingly interconnected world, imports tend to account increasing
share of development countries’ consumption. Another source of the shift is an increase in U.S.
Government expenditure on U.S. goods, an event that increases during rec …
June 16, 2014
Grain Market Outlook
… igure 1. JULY 2014 CME Kansas Wheat Futures Price Charts (electronic trade, 10/17/2013 to 6/13/2014)
Also, at least to date, no other major World wheat producing and trading countries have developed major
crop production problems. That said, with the expected development of an El Nino event in mid‐2014,
Australian wheat production and export prospects could be placed at risk in the later have of the year. In
addition, there are early indications that hot, dry weather patterns in Russia in the Black Sea Region have at
least marginally diminished wheat production forecasts for 2014. This situation in the Black Sea Region could
$5.99 ¾ Low, Jan. 29th
$7.23 ¼ …
April 30, 2015
Grain Market Outlook
I‐C. U.S. Corn Supply‐Demand – Focus on “New Crop” 2015/16 Projections
U.S. Corn Acreage, Yield & Production
In the March 31, 2015 USDA Prospective Plantings report the USDA projected that 2015 U.S. corn total
planted acreage would be 89.199 million acres (ma), down 2.398 ma (down 1.5%) from 90.597 ma in 2014,
down 6.166 ma (‐6.5%) from 95.365 ma in 2013, down 8.092 ma (‐8.3%) from 97.291 ma in 2012, and down
from 91.921 ma in 2011 (Table 1 and Figure 3).
Assuming the average harvested‐to‐planted acreage for all U.S. corn over the 2007‐2014 period of 91.6%,
2015 U.S. corn harvested acreage would be 81.706 ma, down 1.430 ma (‐1.7%) from 83.136 ma in 2014, down
5.745 ma (‐6.6%) from 87.451 ma in 2013, down 5.659 ma (‐6.5%) from 87.365 ma in 2012, and down from
83.981 ma in 2011.
The 2014 U.S. average corn yield of 171.0 bushels per acre (bu/ac) is a record high and unchanged from
the January‐March USDA reports, but is higher than the 166.8 bu/ac estimate in the 2015 USDA Agricultural
Outlook Forum estimate given on February 19‐20, 2015 in Arlington, Virginia (Table 1 and Figure 4). This early
2015 USDA projection of 166.8 bu/ac is 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 and up from the previous record high of 164.7
bu/ac in 2009.
Based on this combination of projections for 2015 planted acreage (89.199 ma – from the USDA),
harvested acreage (81.706 ma – a KSU assumption based on recent historic percent harvested‐to‐planted
acres), and yield (166.8 ma – USDA), 2015 U.S. corn production would be 13.629 billion bushels (bb) – down
from the record high of 14.206 bb 2014, and the previous record high of 13.829 bb in 2013 – but up from
10.755 bb in 2012, 12.360 bb in 2011, 12.447 bb in 2010, and 13.092 bb in 2009 (Table 1).
U.S. Corn Total Supplies
The USDA projects that total supplies of U.S. corn for “current crop” MY 2014/15 are a record high 15.472
bb – resulting from beginning stocks of 1.232 bb, projected 2014 production of 14.216 bb, and projected
imports of 25 million bushel (mb) (Table 1 and Figure 5). For “new crop” MY 2015/16, Total supplies are
expected to be “equal‐or‐marginally higher at 15.481 bb – resulting from beginning stocks of 1.827 bb,
projected 2015 production of 13.629 bb, and projected imports of 25 million bushel (mb) in “new crop” MY
2015/16 (Table 1). Total supplies of near 15.5 bb in “current crop” MY 2014/15 and “new crop” MY would
both be record highs relative to recent years, being comparable to 14.362 bb in MY 2007/08, 13.729 bb in MY
2008/09, 14.774 bb in MY 2009/10, 14.182 bb in MY 2010/11, 13.517 bb in MY 2011/12, 11.904 bb in “short
crop” MY 2012/13, and 14.686 bb in MY 2013/14.
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The implicit USDA forecast of beginning stocks of 1.827 bb in “new crop” MY 2015/16 (equal to ending
stocks from “current year” MY 2014/15) are up substantially from 1.232 bb in beginning stocks in “current
crop” MY 2014/15, 821 mb in MY 2013/14, 989 mb in MY 2012/13, and 1.128 bb in MY 2011/12, and at least
moderately larger than 1.708 bb in MY 2010/11, 1.673 bb in MY 2009/10, and 1.624 bb in MY 2008/09. This
amount of beginning stocks in “new crop” MY 2015/16 of 1.827 bb is up considerably from the low of 426 mb
that occurred in MY 1996/97, and the highest since 1.967 bb in MY 2006/07 and 2.114 bb in MY 2005/07
(Table 1 and Figure 5).
Imports of 25 mb in “current crop” MY 2014/15 are projected to be down from 36 mb in MY 2013/14 (the
2nd highest on record), and are also down sharply from the record high of 160 mb in the drought‐stressed
2012/13 marketing year. The KSU projection of 25 mb in imports in “new crop” MY 2015/16 would be equal to
the amount in “current crop” MY 2014/15. These amounts of U.S. corn imports are comparable to 29 mb in
MY 2011/12, and 28 mb in MY 2010/11.
U.S. Corn Use by Category & Total Use
U.S. Ethanol Production and Corn Usage: Projected U.S. corn use for ethanol production of 5.200 bb in
“current crop” MY 2014/15 is unchanged from March, but down 50 mb from 5.250 bb in February, but still up
from 5.175 bb in January and from 5.150 bb in the December 2014 WASDE report. These adjustments in the
USDA projections since December 2014 are due to a) low corn input prices, b) at least moderate strength in
distillers grains co‐product prices, and c) increased projections of 2015 U.S. gasoline consumption released in
recent months (Table 1 and Figures 6‐7). This projection of 5.200 bb in “current crop” MY 2014/15 is up from
5.134 bb in MY 2013/14, 4.641 bb in MY 2012/13, and 5.000 bb in MY 2011/12. The USDA projected that
5.225 bb of U.S. corn would be used in ethanol production in “new crop” MY 2015/16 at its Agricultural
Outlook Forum on February 19‐20, 2015 in Arlington, Virginia.
Figure 7 shows weekly U.S. oxygenated plant production of fuel ethanol as reported by the U.S. Energy
Information Administration (www.eia.gov) with a calculated estimate of corn use developed by Kansas State
University. Assuming 2.83 gallons of ethanol produced per bushel of corn (equaling the calculated conversion
of U.S. corn into ethanol in January 2015), these calculations indicate that the equivalent projected annual rate
of U.S. corn used for ethanol production for “current crop” MY 2014/15 has ranged from 4.772‐5.374 bb on a
weekly basis since early September 2014 ‐ the beginning of the “current crop” 2014/15 marketing year. Over
the period of from September 1, 2014 through April 24, 2015, corn usage for ethanol production was been on
pace to reach 5.117 bb in “current crop” MY 2014/15. This estimate of 5.117 bb is 83 mb less than the USDA’s
April 9, 2015 WASDE report estimate of 5.200 bb of corn to be used for ethanol production during “current
crop” MY 2014/15, with 34 of 52 weeks (65.4%) of the marketing year completed.
U.S. Corn Use as Distillers Grains: An estimate of the U.S. corn equivalent amounts of distillers grains
(DDGS) use for direct livestock feeding and exports is provided in Figure 8 – which shows estimated a) DDGS
corn equivalent U.S. domestic livestock feeding, and b) DDGS exports as well as other categories of U.S. corn
usage since MY 1989/90.
This analysis assumes 16.00 pounds of distillers dried grains and solubles (DDGS) per 56 pound bushel of
corn used in ethanol production – following from recent ethanol industry surveys. By these estimates, since
MY 2010/11 approximately 0.993‐1.130 bb of U.S. corn equivalent bushel‐weights of DDGS are projected
either to have already been or are to be fed to U.S. livestock during each marketing year – i.e., 1.108 bb in
DDGS corn‐weight equivalents in MY 2010/11, 1.130 bb in MY 2011/12, 1.004 bb in MY 2012/13, 993 mb
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projected for MY 2013/14, and a projection of 1.006 bb in “current crop” MY 2014/15. Over the five most
recent marketing years, DDGS exports in corn equivalent weights are estimated to range from 299 to 479 mb,
– i.e., 326 mb in DDGS corn‐weight equivalents in MY 2010/11, 299 mb in MY 2011/12, 322 mb in MY 2012/13,
473 mb estimated for MY 2013/14, and a projection of a record high 479 mb in “current crop” MY 2014/15.
U.S. Corn Exports: Projected U.S. corn exports of 1.800 bb in “current crop” MY 2014/15 were unchanged
in March, but up 50 mb from the February WASDE report. This projection of 1.800 bb for MY 2014/15 is down
from the estimate of 1.917 bb in MY 2013/14, but are up sharply from 730 mb in MY 2012/13 – the 40 year
low since MY 1975/76 (Table 1, Figures 6 and 8). The USDA projected that 1.850 bb of U.S. corn would be
exported in “new crop” MY 2015/16 at its Agricultural Outlook Forum on February 19‐20, 2015 in Arlington,
Virginia.
According to the USDA Foreign Agricultural Service (FAS) weekly export data (http://apps.fas.usda.gov/export‐
sales/esrd1.html), as of April 23rd, through the 34th week of “current crop” MY 2014/15 (34 of 52 weeks), 1.057 bb
of U.S. corn had been physically shipped for export – equal to 58.7% of the USDA’s updated projection for
“current crop” MY 2014/15 of 1.800 bb. An additional 530.5 mb of U.S. corn had been pre‐sold for future
export shipments during the “current crop” 2014/15 marketing year – prior to August 31, 2015 (the end of
“current crop” MY 2014/15).
Adding together 1,056.7 mb in past shipments plus 530.5 mb in forward sales amounts to 1,587.2 mb, or
88.2% of the USDA’s 1.800 bb U.S. corn export target for “current crop” MY 2014/15 in the April 9th USDA
WASDE report with 65.4% (34/52 weeks) of the marketing year completed. United States’ corn exports will
need to average 41.29 mb per week for the remainder of the “current crop” 2014/15 marketing year to
achieve the USDA’s 1.800 bb projection. This compares to 41.0 mb and 50.0 mb of export shipments for the
weeks ending April 16th and April 23rd, respectively – i.e., equal to and ahead of the pace needed to meet the
USDA’s export projection, respectively.
Non‐Ethanol FSI: Forecast non‐ethanol food, seed and industrial (FSI) use of 1.395 bb in “current crop”
MY 2014/15 is greater than 1.367 bb in MY 2013/14, and compares to 1.397 bb in MY 2012/13, and 1.428 bb
in MY 2011/12 (Table 1, Figures 6 and 8). The USDA projected that 1.410 bb of U.S. corn would be used for
Non‐ethanol FSI production in “new crop” MY 2015/16 at its Agricultural Outlook Forum on February 19‐20,
2015 in Arlington, Virginia.
Feed and Residual Use: Forecast U.S. feed and residual use of 5.250 bb in “current crop” MY 2014/15 is
down 50 mb from March, and down 125 mb from 5.375 bb in the December 2014 WASDE (Table 1, Figures 6
and 8). This projection of 5.250 bb in “current crop” MY 2014/15 is up from 5.036 bb for MY 2013/14, 4.315
bb in MY 2012/13, and 4.557 bb in MY 2011/12. These levels of corn use for livestock feeding are somewhat
correlated with the amounts of energy feeds per grain consuming animal units reported by the USDA over the
same time period as shown in what follows. The USDA projected that 5.275 bb of U.S. corn would be used
directly for livestock feed in “new crop” MY 2015/16 at its Agricultural Outlook Forum on February 19‐20,
2015 in Arlington, Virginia.
In the USDA April 13th Feed Outlook Report (http://usda.mannlib.cornell.edu/usda/current/FDS/FDS‐04‐13‐2015.pdf) the
USDA Economic Research Service (ERS) indicates that over the MY 2012/13 through “current crop” MY
2014/15 time period, the total amount of Energy Feeds in the U.S. – including corn, sorghum, barley, oats and
wheat – was estimated to be 125.7 million metric tons (mmt) in MY 2012/13 (87.2% corn), and 134.4 mmt in
MY 2013/14 (95.2% corn), and is projected to be 142.4 mmt in “current crop” MY 2014/15 (93.6% corn). Over
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this same 3 year period, total U.S. Grain Consuming Animal Units (GCAUs) were estimated to be 92.3 million
in MY 2012/13, 90.9 million in “current” MY 2013/14, and 93.2 million in “current crop” MY 2014/15.
As a result, U.S. Energy Feeds per Grain Consuming Animal Unit is estimated to be 1.362 metric tons per
animal unit (mt/au) in MY 2012/13, and 1.479 mt/au in MY 2013/14, and is projected to be 1.528 mt/au in
“current crop” MY 2014/15. As the availability of feed grain and other energy feeds has increased or is
expected to increase from the drought stricken “short crop” year of MY 2012/13 to the previous record “large
crop” MY 2013/14, and now into the new even bigger record large “current crop” MY 2014/15 for corn and
other aggregated feedgrains, the amount of energy feeds fed per animal unit and total feed use of U.S. corn
has increased – helping to bring downward pressure on the prices of U.S. corn and other feedgrains.
Total Use of U.S. Corn for “current crop” MY 2014/15 is projected to be a record high 13.645 bb – down 50
mb from the March USDA WASDE report. This compares to the previous record high of 13.454 bb in MY
2013/14, and is up sharply from 11.083 bb in drought‐affected MY 2012/13 (Table 1 and Figures 6 and 8).
United States’ total corn use has varied widely in recent marketing years – due mainly to changes in available
U.S. corn supplies. Corn use in the U.S. over time have changed from 12.737 bb in MY 2007/08, to 12.056 bb
in MY 2008/09, 13.066 bb in MY 2009/10, 13.055 bb in MY 2010/11, 12.528 bb in MY 2011/12, 11.083 bb in
MY 2012/13, the previous record high of 13.454 bb in MY 2013/14, and now to the new projected record high
amount of 13.645 bb in “current crop” MY 2014/15. The USDA projected that a record high total of 13.750 bb
of U.S. corn would be used in “new crop” MY 2015/16 at its Agricultural Outlook Forum on February 19‐20,
2015 in Arlington, Virginia.
U.S. Corn Ending Stocks, % Ending Stocks‐to‐Use, & Prices
U.S. corn ending stocks for “current crop” MY 2014/15 are projected to be 1.827 bb – up 50 mb from
March, equal to the USDA February WASDE projection, while being down from earlier projections of 1.998 bb
in December 2014, and 2.081 bb in the October 2014 WASDE report (Table 1 & Figure 9). Since MY 2006/07
(1.304 bb), U.S. corn ending stocks have been 1.624 bb in MY 2007/08, 1.673 bb in MY 2008/09, 1.708 bb in
MY 2009/10, 1.128 bb in MY 2010/11, 989 mb in MY 2011/12, 821 mb in “drought stricken” MY 2012/13,
1.232 bb in MY 2013/14, and are now projected to be 1.827 bb in “current crop” MY 2014/15. Using a
combination of most recent USDA planted acreage, yield, and usage assumptions and KSU estimates of
harvested acreage (explained above), projected U.S. corn ending stocks in “new crop” MY 2015/16 equal
1.731 bb.
Projected percent (%) ending stocks‐to‐use of 13.39% in “current crop” MY 2014/15 are up from 12.98% in
the March WASDE, but equal to 13.39% in February, while being down from 13.81% in January, 14.62% in
December, 14.70% in November, and from 15.3% in the October 2014 WASDE report (Table 1 and Figures 9
and 10). On a year‐by‐year basis, U.S. corn % ending stocks‐to‐use trended downward from 12.8% in MY
2007/08 and 13.9% in MY 2008/09, to 13.1% in MY 2009/10, 8.6% in MY 2010/11, 7.9% in MY 2011/12, and
then down to 7.4% in “drought stricken” MY 2012/13, before increasing for the first time in six (6) years to
9.16% in MY 2013/14, and now again up to a projected level of 13.39% in “current crop” MY 2014/15.
U.S. average corn prices for “current crop” MY 2014/15 are projected to be in the range of $3.55‐$3.85
bu/ac (midpoint = $3.70) (Table 1 & Figures 8‐9). This price range is narrower by $0.05 /bu on each end of the
range from March with the same midpoint of $3.70 per bushel. After mid‐point estimates of $3.50 /bu in
November‐December 2014 for “current crop” MY 2014/15, the USDA raised it’s midpoint forecast estimates to
$3.65 in January‐February 2015, and now to $3.70 in the March‐April 2015 USDA WASDE reports. Using a
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combination of most recent USDA planted acreage, yield, and usage assumptions and KSU estimates of
harvested acreage (explained above), projected U.S. corn average prices in “new crop” MY 2015/16 equal
$3.85 /bu.
Since the beginning of the rapid expansion in U.S. ethanol production in 2006, U.S. corn prices have moved
first higher, then lower, and then higher again, changing from $3.04 /bu in MY 2006/07, to $4.20 in MY
2007/08, $4.06 in MY 2008/09, $3.55 in MY 2009/10, $5.18 in MY 2010/11, $6.22 in MY 2011/12, and then up
to the record high of $6.89 in “drought stricken” MY 2012/13. However, if the April 9th WASDE projection
holds true, prices will have declined for two consecutive years since the $6.89 record high in MY 2012/13,
down to $4.46 in MY 2013/14, and again down to $3.55‐$3.85 (midpoint = $3.70) in “current crop” MY
2014/15.
I‐D. USDA & KSU Corn Market Scenarios for “New Crop” MY 2015/16
Both the USDA and Kansas State University Extension have provided initial forecasts of U.S. corn supply‐
demand balances and prices for the “new crop” 2015/16 marketing year, with details provided below. The
USDA forecast provided here is an “adjusted version” of the U.S. corn supply‐demand and price forecast
provided at the USDA Agricultural Outlook Forum held at Arlington, Virginia on February 19‐20, 2015.
Specifically, adjustments were made in the “beginning stocks” MY 2015/16 estimates of these USDA
forecasts based on updated U.S. corn beginning stocks information available in the March 10, 2015 USDA
WASDE report. Also, U.S. corn planted acres from the March 31st USDA Prospective Plantings Report were
used rather than the 2015 Agricultural Outlook Forum forecast. The 2015 USDA Ag Outlook Forum forecasts
for corn, wheat, and soybeans are available online: http://www.usda.gov/oce/forum/2015_Speeches/Grains_Oilseeds.pdf
Two probability‐weighted Kansas State University (KSU) projections are provided – one based on a normal
crop “trend yield” of 162.3 bu/ac (given an 80% probability of occurring in 2015), and the other based on a
short crop “low yield” of 155.0 bu/ac (given a 20% probability of occurring in 2015).
A. USDA “New Crop” MY 2015/16 U.S. Corn Supply‐Demand & Price Projection
For “new crop” MY 2015/16, this USDA projection reflects the likelihood of a 1.398 ma reduction in U.S.
corn planted acreage in 2015, and how the USDA projects that a possible return to lower U.S. corn yields in
2015 of 166.8 bu/ac along with a moderation of 2015 U.S. corn production would likely affect U.S. corn supply‐
demand balances and prices in the coming “new crop” 2015/16 marketing year, i.e., September 1, 2015
through August 31, 2016 (Table 1).
A Kansas State University assumption that the percent harvested‐to‐planted acreage in 2015 will equal the
2007‐2014 average of 91.6% combined with the USDA’s preliminary 2015 U.S. corn yield projection of 166.8
bu/ac leads to an adjusted USDA forecast of 2015 U.S. corn production of 13.629 bb. Following this
projection of corn production for “new crop” MY 2015/16, U.S. total corn supplies are projected to be 15.481
bb (with the adjustment for 1.827 bb in U.S. corn beginning stocks), while U.S. total corn usage is still
estimated to be 13.750 bb (Table 1).
Consequently, U.S. corn ending stocks are projected to be 1.731 bb in this adjusted USDA projection for
“new crop” MY 2015/16, with % ending stocks‐to‐use of 12.60%. The adjusted forecast of U.S. corn average
prices (according to KSU estimates) would be $3.85 /bu for “new crop” MY 2015/16, up marginally from
“current crop” MY 2014/15 (Table 1 and Figures 8‐9).
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Adjusted USDA Scenario for “New Crop” MY 2015/16 U.S. Corn S/D & Prices
1.398 million acres planted & 166.8 bu/ac yields
‐ 2015 U.S. Planted Acres …
March 19, 2014
Grain Market Outlook
begin selling their 2013 crops in storage “en mass”, or some combination of
crop weather‐development factors negatively affect the 2014 U.S. corn crop and/or World geopolitical events
bring volatility to grain markets, there still seems to be limits as to how high U.S. cash corn prices can move.
U.S. Corn Supply‐Demand for “Current” 2013/14: The USDA left unchanged its forecast 2013 U.S. corn
production at a record high 13.925 billion bushels (bb) – up from 10.780 bb in 2012. The forecast of “current”
MY 2013/14 total supplies of 14.781 bb was also unchanged, while forecasts exports of 1.625 bb and total use
of 13.325 bb were both raised 25 mb due to strong export shipments and forward sales to date in the current
marketing year. As a result, “current” MY 2013/14 ending stocks were projected to be 1.456 bb – down 25 mb
from February, and down 336 mb from December 2013, but still up from 821 mb in “last year’s” MY 2012/13.
Projected ending stocks‐to‐use of 10.9% for “current” MY 2013/14 has continued to trend lower on a monthly
basis since a projection of 14.7% in the November 2013 WASDE, but is still up sharply from 7.4% for “last
year’s” MY 2012/13 and 7.9% in MY 2011/12. U.S. average corn prices for “current” MY 2013/14 are forecast
to be in the range of $4.25‐$4.75 / bu, down from a record high $6.89 /bu in “last year’s” MY 2012/13.
USDA U.S. Corn Forecasts for “Next Crop” MY 2014/15: Based on projections from the Feb. 21 USDA
Agricultural Outlook Conference, with small adjustments made in the beginning stocks estimate, forecast 2014
U.S. corn production and “next crop” MY 2014/15 supply‐demand and price scenarios are: 92.0 ma planted,
84.6 ma harvested, 165.3 bu/ac yields, a 13.985 bb 2014 U.S. corn crop, 13.380 bb total use, 2.086 bb ending
stocks, 15.6% S/U, & ≈$3.90 average price per bu.
KSU U.S. Corn Forecasts for “Next Crop” MY 2014/15: KSU projections of 2014 U.S. corn production and “next
crop” MY 2014/15 supply‐demand and price scenarios are: a) KSU “Low Production” Scenario: 20% prob. of
90.0 ma planted, 81.9 ma harvested, 154.4 bu/ac yields, a 12.645 bb 2014 U.S. corn crop, 12.775 bb total use,
1.366 bb ending stocks, 10.7% S/U, & $4.30‐$5.30 ($4.80 average) /bu; b) KSU “Likely Production” Scenario:
60% prob. of 92.5 ma planted, 84.2 ma harvested, 159.4 bu/ac yields, a 13.421 bb 2014 U.S. corn crop, 13.275
bb total use, 1.632 bb ending stocks, 12.3% S/U, & $3.75‐$4.75 ($4.25 average) /bu; and c) KSU “High
Production” Scenario: 20% prob. of 95.0 ma planted, 86.5 ma harvested, 164.4 bu/ac yields, a 14.221 bb 2014
U.S. corn crop, 13.650 bb total use, 2.057 bb ending stocks, 15.1% S/U, & $3.40‐$4.40 ($3.90 average) /bu.
World Corn: World corn total supplies of 1,102 mmt in “current” MY 2013/14 are up from 996 mmt in “last
year’s” MY 2012/13, and up from 1,015 mmt in MY 2011/12. Projected World corn ending stocks of 158.5
mmt (16.8% S/U) in “current” MY 2013/14 are up from 134.7 mmt (15.6% S/U) in “last year’s” MY 2012/13,
and up from 132.8 mmt (15.0% S/U) in MY 2011/12. Corn production in major export competitors Brazil and
Argentina is projected to be lower in the coming year in favor of increased soybean production. Conversely,
corn production in China and Ukraine are projected to be sharply higher in the coming year – injecting a
degree of caution on U.S. corn market prospects for both the remainder of “current” MY 2013/14 and for
“next crop” MY 2014/15. …
March 17, 2015
Grain Market Outlook
I‐C. U.S. Corn Supply‐Demand – USDA “Current Crop” 2014/15 Projections
U.S. Corn Acreage, Yield & Production
In its March 2015 USDA WASDE report the USDA made no change from the January‐February WASDE
reports in its projection that 2014 U.S. corn total planted acreage was 90.597 million acres (ma), which had
been adjusted down from 90.885 ma in the December WASDE report (Table 1 and Figure 2). Planted acreage
of 90.597 million acres in 2014 is down from 95.365 ma in 2013, 97.291 ma in 2012, and 91.921 ma in 2011.
In addition, the USDA made no change in its January‐February projections of 2014 U.S. corn harvested
acreage of 83.136 ma, which had been adjusted upwards from 83.097 ma in December. Harvested acreage of
83.136 ma in 2014 is down from 87.451 ma in 2013, 87.365 ma in 2012, and 83.981 ma in 2011.
The 2014 proportion of harvested‐to‐planted acreage for all U.S. corn is projected to be 91.8% ‐ which had
been adjusted up from 91.4% in December. This proportion of harvested acreage in 2014 of 91.8% is up
marginally from 91.7% in to 2013, and up from 89.9% in 2012, and 91.4% in 2011.
The projected 2014 U.S. average corn yield of 171.0 bushels per acre (bu/ac) is a record high and
unchanged from the January‐February USDA reports, but is down from earlier USDA projections of 173.4 bu/ac
in December and 174.2 bu/ac in October 2014 (Table 1 and Figure 3). This projection of 171.0 bu/ac is up from
158.1 bu/ac in 2013, the drought affected 2012 low yield of 123.1 bu/ac., and up from the previous record high
of 164.7 bu/ac in 2009.
Based on these 2014 acreage and yield projections, the USDA maintained is earlier January‐February
projection that 2014 U.S. corn production to be a record high 14.216 billion bushels (bb) – down from 14.407
bb in the December USDA reports. The projection of a record high 14.216 bb is up from the previous record
high of 13.829 bb in 2013, 10.755 bb in 2012, 12.360 bb in 2011, 12.447 bb in 2010, and 13.092 bb in 2009
(Table 1 and Figure 4).
U.S. Corn Total Supplies
The USDA projects that total supplies of U.S. corn for “current crop” MY 2014/15 are a record high 15.472
bb – resulting from beginning stocks of 1.232 bb, projected 2014 production of 14.216 bb, and projected
DEC 2015 CME eCorn Futures
Sept. 11, 2014 – March 13, 2015
Close = $4.04 ¾ on 3/13/2015
MAY 2015 CME eCorn Futures
Sept. 11, 2014 – March 13, 2015
Close = $3.80 ½ on 3/13/2015
Page | 4
imports of 25 million bushel (mb) (Table 1 and Figure 4). Total supplies of 15.472 bb in “current crop” MY
2014/15 are comparable to recent year’s amounts of 14.362 bb in MY 2007/08, 13.729 bb in MY 2008/09,
14.774 bb in MY 2009/10 (3rd largest), 14.182 bb in MY 2010/11 (4th largest), 13.517 bb in MY 2011/12, 11.904
bb in “short crop” MY 2012/13, and 14.686 bb in MY 2013/14 (2nd highest).
Beginning stocks of 1.232 bb in “current crop” MY 2014/15 are down marginally (down 4 mb) from the
October‐December USDA WASDE reports. The total of 1.232 bb in beginning stocks in “current crop” MY
2014/15 is up from 821 mb in MY 2013/14, 989 mb in MY 2012/13, and 1.128 bb in MY 2011/12, but less than
1.708 bb in MY 2010/11, 1.673 bb in MY 2009/10, and 1.624 bb in MY 2008/09. This amount of beginning
stocks in “current crop” MY 2014/15 of 1.232 bb is up considerably from the low of 426 mb that occurred in
MY 1996/97 (Table 1 and Figure 4).
Imports of 25 mb in “current crop” MY 2014/15 are projected to be down from 36 mb in MY 2013/14 (the
2nd highest on record), and are also down sharply from the record high of 160 mb in the drought‐stressed
2012/13 marketing year. These amounts of U.S. corn imports are comparable to 29 mb in MY 2011/12, and 28
mb in MY 2010/11.
U.S. Corn Use by Category & Total Use
U.S. Ethanol Production and Corn Usage: Projected U.S. corn use for ethanol production of 5.200 bb in
“current crop” MY 2014/15 is down 50 mb from February, but still up from 5.175 bb in January and from 5.150
bb in the December WASDE report. These adjustments in the USDA projections are due to a) low corn input
prices, b) at least moderate strength in distillers grains co‐product prices, and c) increased projections of 2015
U.S. gasoline consumption released in the past month (Table 1 and Figures 5‐6). This projection of 5.200 bb in
“current crop” MY 2014/15 is up from 5.134 bb in MY 2013/14, 4.641 bb in MY 2012/13, and 5.000 bb in MY
2011/12.
Figure 6 shows weekly U.S. oxygenated plant production of fuel ethanol as reported by the U.S. Energy
Information Administration (www.eia.gov) with a calculated estimate of corn use developed by Kansas State
University. Assuming 2.83 gallons of ethanol produced per bushel of corn (equaling the calculated conversion
of U.S. corn into ethanol in January 2015), these calculations indicate that the equivalent projected annual rate
of U.S. corn used for ethanol production for “current crop” MY 2014/15 has ranged from 4.772‐5.374 bb on a
weekly basis since early September 2014 ‐ the beginning of the “current crop” 2014/15 marketing year. Over
the period of from September 1, 2014 through March 6, 2015, corn usage for ethanol production was been on
pace to reach 5.127 bb in “current crop” MY 2014/15. This estimate of 5.127 bb is 73 mb less than the USDA’s
March 2015 WASDE report estimate of 5.200 bb of corn to be used for ethanol production during “current
crop” MY 2014/15, with 27 of 52 weeks (51.9%) of the marketing year completed.
U.S. Corn Use as Distillers Grains: An estimate of the U.S. corn equivalent amounts of distillers grains
(DDGS) use for direct livestock feeding and exports is provided in Figure 7 – which shows estimated a) DDGS
corn equivalent U.S. domestic livestock feeding, and b) DDGS exports as well as other categories of U.S. corn
usage since MY 1989/90.
This analysis assumes 16.00 pounds of distillers dried grains and solubles (DDGS) per 56 pound bushel of
corn used in ethanol production – following from recent ethanol industry surveys. By these estimates, since
MY 2010/11 approximately 0.993‐1.130 bb of U.S. corn equivalent bushel‐weights of DDGS are projected
either to have already been or are to be fed to U.S. livestock during each marketing year – i.e., 1.108 bb in
DDGS corn‐weight equivalents in MY 2010/11, 1.130 bb in MY 2011/12, 1.004 bb in MY 2012/13, 993 mb
Page | 5
projected for MY 2013/14, and a projection of 1.006 bb in “current crop” MY 2014/15. Over the same five
most recent marketing years, DDGS exports in corn equivalent weights are estimated to range from 299 to 479
mb, – i.e., 326 mb in DDGS corn‐weight equivalents in MY 2010/11, 299 mb in MY 2011/12, 322 mb in MY
2012/13, 473 mb estimated for MY 2013/14, and a projection of a record high 479 mb in “current crop” MY
2014/15.
U.S. Corn Exports: Projected U.S. corn exports of 1.800 in “current crop” MY 2014/15 were raised 50 mb in
the March WASDE report from the previous month. This projection of 1.800 bb for MY 2014/15 is down from
the estimate of 1.917 bb in MY 2013/14, but are up sharply from 730 mb in MY 2012/13 – the 40 year low
since MY 1975/76 (Table 1, Figures 5 and 7). According to the USDA Foreign Agricultural Service (FAS) weekly
export data (http://apps.fas.usda.gov/export‐sales/esrd1.html), as of March 5th, through the 27rd week of “current crop” MY
2014/15 (27 of 52 weeks), 789.2 mb of U.S. corn had been physically shipped for export – equal to 43.8% of
the USDA’s updated projection for “current crop” MY 2014/15 of 1.800 bb. An additional 629.8 mb of U.S.
corn had been pre‐sold for future export shipments during the “current crop” 2014/15 marketing year – prior
to August 31, 2015 (the end of “current crop” MY 2014/15).
Adding together 789.2 mb in past shipments plus 629.8 mb in forward sales amounts to 1,419.0 mb, or
78.8% of the USDA’s 1.800 bb U.S. corn export target for “current crop” MY 2014/15 in the March 10th USDA
WASDE report with 51.9% (27/52 weeks) of the marketing year completed. United States’ corn exports will
need to average 40.4 mb per week for the remainder of the “current crop” 2014/15 marketing year to achieve
the USDA’s 1.800 bb projection. This compares to 54.3 mb and 45.9 mb of export shipments for the weeks
ending February 26th and March 5th, respectively – i.e., ahead of the pace needed to meet the USDA’s export
projection.
Non‐Ethanol FSI: Forecast non‐ethanol food, seed and industrial (FSI) use of 1.395 bb in “current crop”
MY 2014/15 is greater than 1.367 bb in MY 2013/14, and compares to 1.397 bb in MY 2012/13, and 1.428 bb
in MY 2011/12 (Table 1, Figures 5 and 7).
Feed and Residual Use: Forecast U.S. feed and residual use of 5.250 bb in “current crop” MY 2014/15 is
down 25 mb from January‐February, and down 125 mb from the December WASDE (Table 1, Figures 5 and 7).
This projection of 5.250 bb in “current crop” MY 2014/15 is up from 5.036 bb for MY 2013/14, 4.315 bb in MY
2012/13, and 5.000 bb in MY 2011/12. These levels of corn use for livestock feeding are somewhat correlated
with the amounts of energy feeds per grain consuming animal units reported by the USDA over the same time
period as shown in what follows.
In the USDA March 10th Feed Outlook Report (http://usda.mannlib.cornell.edu/usda/current/FDS/FDS‐03‐12‐2015.pdf) the
USDA Economic Research Service (ERS) indicates that over the MY 2012/13 through “current crop” MY
2014/15 time period, the total amount of Energy Feeds in the U.S. – including corn, sorghum, barley, oats and
wheat – was estimated to be 125.9 million metric tons (mmt) in MY 2012/13 (87.05% corn), and 134.5 mmt in
MY 2013/14 (95.1% corn), and is projected to be 144.1 mmt in “current crop” MY 2014/15 (93.4% corn). Over
this same 3 year period, total U.S. Grain Consuming Animal Units (GCAUs) were estimated to be 92.3 million
in MY 2012/13, 90.9 million in “current” MY 2013/14, and 92.9 million in “current crop” MY 2014/15.
As a result, U.S. Energy Feeds per Grain Consuming Animal Unit is estimated to be 1.364 metric tons per
animal unit (mt/au) in MY 2012/13, and 1.477 mt/au in MY 2013/14, and is projected to be 1.551 mt/au in
“current crop” MY 2014/15. As the availability of feed grain and other energy feeds has increased or is
expected to increase from the drought stricken “short crop” year of MY 2012/13 to the record “large crop” MY
2013/14, and now into the new even bigger record large “current crop” MY 2014/15 for corn and other
Page | 6
aggregated feedgrains, the amount of energy feeds fed per animal unit and total feed use of U.S. corn has
increased – helping to bring downward pressure on the prices of U.S. corn and other feedgrains.
Total Use of U.S. Corn for “current crop” MY 2014/15 is projected to be a record high 13.695 bb – up 50
mb from February and up 100 mb from January, and up 25 mb from the December USDA WASDE report. This
compares to the previous record high of 13.454 bb in MY 2013/14, and is up sharply from 11.083 bb in
drought‐affected MY 2012/13 (Table 1 and Figures 5 & 7). United States’ total corn use has varied widely in
recent marketing years – due mainly to changes in available U.S. corn supplies. Corn supplies in the U.S. over
time have changed from 12.737 bb in MY 2007/08, to 12.056 bb in MY 2008/09, 13.066 bb in MY 2009/10,
13.055 bb in MY 2010/11, 12.528 bb in MY 2011/12, 11.083 bb in MY 2012/13, the previous record high of
13.454 bb in MY 2013/14, and now to the new projected record high amount of 13.695 bb in “current crop”
MY 2014/15.
U.S. Corn Ending Stocks, % Ending Stocks‐to‐Use, & Prices
U.S. corn ending stocks for “current crop” MY 2014/15 are projected to be 1.777 bb – down 50 mb from
February, down 100 mb from January, and down 221 mb from the December WASDE report (Table 1 & Figure
4). Since MY 2006/07 (1.304 bb), U.S. corn ending stocks have been 1.624 bb in MY 2007/08, 1.673 bb in MY
2008/09, 1.708 bb in MY 2009/10, 1.128 bb in MY 2010/11, 989 mb in MY 2011/12, 821 mb in “drought
stricken” MY 2012/13, 1.232 bb in MY 2013/14, and are now projected to be 1.777 bb in “current crop” MY
2014/15.
Projected percent (%) ending stocks‐to‐use of 12.98% in “current crop” MY 2014/15 has been trending
lower since fall, being down from 13.39% in February, 13.81% in January, 14.62% in December, 14.70% in
November, and from 15.3% in the October WASDE report (Table 1 and Figures 8‐9). On a year‐by‐year basis,
U.S. corn % ending stocks‐to‐use trended downward from 12.8% in MY 2007/08 and 13.9% in MY 2008/09, to
13.1% in MY 2009/10, 8.6% in MY 2010/11, 7.9% in MY 2011/12, and then down to 7.4% in “drought stricken”
MY 2012/13, before increasing for the first time in six (6) years to 9.2% in MY 2013/14, and now again up to a
projected level of 12.98% in “current crop” MY 2014/15.
U.S. average corn prices for “current crop” MY 2014/15 are projected to be in the range of $3.50‐$3.90
bu/ac (midpoint = $3.70) (Table 1 & Figures 8‐9). This price range is higher by $0.10 /bu on the lower end of
the price range from February, with the midpoint of $3.70 being up $0.05 per bushel from the February
WASDE report.
Since the beginning of the rapid expansion in U.S. ethanol production in 2006, U.S. corn prices have moved
first higher, then lower, and then higher again, changing from $3.04 /bu in MY 2006/07, to $4.20 in MY
2007/08, $4.06 in MY 2008/09, $3.55 in MY 2009/10, $5.18 in MY 2010/11, $6.22 in MY 2011/12, and then up
to the record high of $6.89 in “drought stricken” MY 2012/13. However, if the March 10th WASDE projection
holds true, prices will have declined for two consecutive years since the $6.89 record high in MY 2012/13,
down to $4.46 in MY 2013/14, and again down to $3.50‐$3.90 (midpoint = $3.70) in “current crop” MY
2014/15.
…
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
Page | 2
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.
…
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.
Page | 3
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
Page | 4
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 …
December 27, 2017
Grain Market Outlook
Since 1992 there have been negative correlations of ‐0.777 and ‐0.795 between the U.S. Trade Weighted
dollar index and the Texas Gulf HRW Wheat and Kansas City, Missouri Wheat cash prices for Ordinary protein
levels, respectively. This indicates that cash prices of U.S. wheat – denominated or “priced” in U.S. dollars –
have a strong negative or inverse relationship with the value of the U.S. dollar over this time‐period.
U.S. Wheat Production Acreage, Yield & Production
U.S. Wheat Planted Acreage
In the December 12th Crop Production report, the USDA projected 2017 U.S. wheat planted acreage to be
46.012 million acres (ma) – down 4.107 ma (‐8.2%) from 50.119 million acres (ma) in 2016, down 8.987 ma (‐
16.3%) from 54.999 ma in 2015, and down 19.05% from 56.841 ma in 2014 (Table 1 and Figures 3 & 4). KSU
projections for All U.S. Wheat Planted Acres in 2017 equal those of the USDA.
U.S. Winter Wheat Planted Acres in 2017: The December 12th USDA Crop Production report
estimated U.S. winter wheat planted acres for harvest in 2017 to be 32.839 ma (Table 1 and Figures 3 & 4).
Winter wheat seedings of 32.696 ma in 2017 (seeded in fall 2016 for harvest in 2017) were down 3.456 ma (‐
9.6%) to 36.152 ma in 2016, down 6.985 ma (‐17.6%) from 39.681 ma in 2015, down 9.713 ma (‐22.9%) from
42.409 ma in 2014, and down 10.534 ma (‐24.4%) from 43.230 ma in 2013.
With continued low winter wheat prices in Kansas, associated low profitability prospects, and intensive
localized infestations in 2017 of debilitating diseases such as wheat streak mosaic in some parts of the state, it
is likely that seeded acreage of Kansas hard red winter wheat will trend lower in 2018. Hard red winter (HRW)
wheat in Kansas is typically seeded in during the mid‐September through October time‐period. The initial
survey estimates of U.S. and Kansas winter wheat seeded acres will be given in the USDA Winter Wheat and
Canola Seedings report to be released on January 12, 2018.
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