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September 15, 2021
Fed Cattle Pricing
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January 31, 2022
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August 16, 2016
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February 1, 2012
Risk Management Strategies
6.00 CBOT, a 30 Cent Under Basis, and a Price Increase
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June 25, 2018
Grain Market Outlook
25, 2018
1. CME Corn Futures & Kansas Cash Corn Prices & Basis Bids
Since the release … se prices are still higher than when corn bids statewide had fallen to
$2.66‐$2.96 /bu on December 23, 2016, and above marketing loan rates near $2.05 in Central Kansas and
$2.19 per bushel in Western Kansas.
Cash corn price bids in East Central and Northeast Kansas at major terminal locations were $3.52 ‐ $3.57
/bu on June 22nd, with basis bids being $0.05 under to even with JULY 2018 corn futures. These cash corn
prices are still up from the range of $3.26‐$3.28 per bushel on 12/23/2016. Cash corn bids at Kansas ethanol
plants on June 22nd ranged from $3.52 /bu ($0.05 under JULY) to $3.87 ($0.30 over JULY) – continuing to
indicate strength in ethanol demand for corn in Kansas and nationwide.
2. Overview of U.S. Corn Supply‐Demand Prospects in Late‐June 2018
The outlook and prospects for U.S. corn market prices through Summer‐Fall 2018 of this year has declined
from the end of May through June 22nd. The outlook for U.S. corn prices is a “mixed bag” of factors that will
likely have a combination of negative, positive, and as yet unknown impacts on corn prices in the “new crop”
2018/19 marketing year beginning on September 1, 2018. The corn market is weighing the following factors in
assessing current and future supply‐demand and price prospects (Table 1).
First, U.S. corn planted acres are projected to be 88.026 million acres (ma) in 2018, down 2.141 ma from
year 2017, and down 5.978 ma from year 2016 – with similar reductions in harvest acres (Table 1, Figure 4).
This reduction in acres continues to be a positive factor in support of corn price prospects for “new crop” MY
2018/19. Lower U.S. corn acreage in 2018 has decreased the potential for total 2018 corn production, and
provided support for “new crop” 2018/19 marketing year (MY) U.S. corn price prospects.
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Second, working contrary to the decrease in 2018 U.S. corn acres, strong U.S. corn planting progress in
May and as of yet limited threats to 2018 U.S. corn yields in the U.S. have decreased risk and moderately
increased 2018 U.S. corn production prospects from just a month ago in the view of the corn market –
although the USDA has not changed its 2018 production forecast over that time period (Table 1, Figures 5‐6).
In its June 12th WASDE report, the USDA projected 2018 U.S. corn yields to be 174.0 bu/ac, and 2018 U.S. corn
production to be 14.040 billion bushels (bb) – both unchanged from a month earlier.
Still, near record 2018 corn yields of 176.0 bu/ac would raise 2018 U.S. corn production to 14.229 bb – still
down from both 14.604 bb in 2017 and the record high of 15.148 bb in 2016. With beginning stocks of 2.102
bb and imports of 50 million bushels (mb), total supplies of U.S. corn in “new crop” MY 2018/19 are forecast
to be 16.192 bb, down from record highs of 16.942 bb both of the previous two marketing years, but still the
3rd highest on record (Table 1, Figure 6).
Third, recent historic strength in U.S. total corn usage is expected to continue without interruption into
“new crop” MY 2018/19. Projections are for U.S. corn total use to be 14.615 bb in “new crop” MY 2018/19,
down from the record high of 14.840 bb in “old crop” MY 2017/18, and from 14.649 bb in MY 2016/17 (Table
1, Figure 7 & 9).
By category, U.S. ethanol production and corn‐ethanol usage continues to grow with support from a
strong U.S. economy, associated gasoline demand, and the ongoing ethanol fuel usage requirements of the
U.S. Renewable Fuels Standard (Table 1, Figures 8a‐b‐c). United States’ corn usage for ethanol production is
projected at arecord high 5.675 bb in “new crop” MY 2018/19, up from 5.575 bb a year ago, and 5.432 bb two
years ago. Non‐ethanol Food, Seed and Industrial usage is projected to be record high 1.490 bb – up from
1.465 bb and 1.451 bb the previous two (2) marketing years (Table 1, Figure 7).
Exports of U.S. corn are projected to be 2.100 bb in “new crop” MY 2018/19 – down from the 11‐year high
(Table 1, Figures 7 & 10) of 2.300 bb in “old crop” MY 2017/18, and 2.293 bb in MY 2016/17 . During the eight
(8) previous years, U.S. corn exports averaged 1.702 bb – ranging from 730 mb to 1.979 bb. This “new
plateau” in the exports for My 2016/17 through projected “new crop” MY 2018/19 illustrates the recent
strength of U.S. corn exports and their contribution to U.S. corn usage. Improved U.S. corn export prospects
are expected partly as a result of 2018 corn production problems for export competitors Argentina and Brazil.
United States’ corn feed and residual use is projected to be 5.350 bb in “new crop” MY 2018/19 as a result
of anticipated high levels of overall U.S. livestock production in the remainder of 2018 and 2019, as well as
expectations on only moderate strength in U.S. corn prices (Table 1, Figures 7 & 9). This feed use amount of
5.350 bb in “new crop” MY 2018/19 would be down from the 11‐year high of 5.500 bb in “old crop” MY
2017/18, and down from 5.472 bb in MY 2016/17, but up from an average of 4.902 bb the previous 8
marketing years.
Fourth, expectations are that U.S. corn ending stocks in “new crop” MY 2018/19 will decline considerably
from a year earlier – down to 1.577 bb, and that percent (%) ending stocks‐to‐use will drop to 10.79% as a
result of moderately tighter total U.S. corn supplies and continued strong total U.S. corn use (Table 1, Figures
11‐12). These figures compare to 2.102 bb ending stocks and 14.16% stocks/use in “old crop” MY 2017/18,
and to 2.293 bb ending stocks and 15.65% stocks/use in MY 2016/17.
Fifth, from late June through Fall 2018 the path of U.S. corn prices will be largely driven by the prospects
for the 2018 U.S. corn crop – particularly as crop size information becomes available in the August, September
and November USDA National Agricultural Statistics Service (NASS) reports on U.S. Crop Production. The
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USDA projects that in “new crop” MY 2018/19 U.S. corn prices will range from $3.40‐$4.40 per bushel – with a
midpoint forecast of $3.90 per bushel (/bu) (Table 1a). If U.S. corn prices were to average $3.90 in “new crop”
MY 2018/19, it would be the highest price in five (5) years since $4.46 /bu in MY 2013/14 – the year of
recovery following the catastrophic U.S. Corn Belt drought of MY 2012/13 when U.S. corn prices averaged a
record high $6.89 /bu. Expected higher U.S. corn prices in “new crop” MY 2018/19 is evidence of the impact of
lower 2018 U.S. corn acreage and prospects for strong usage.
The U.S. corn supply‐demand and price scenario presented by the USDA in the June 12, 2018 World
Agricultural Supply and Demand Estimates (WASDE) report is given a 50% likelihood of occurring by KSU
Extension Agricultural Economist Kansas State University (Table 1a).
Sixth, when considering alternative outcome scenarios from the USDA’s June 12th forecast, IF for whatever
reason during July‐August 2018 there were a 200‐500+ mb reduction in 2018 U.S. corn production prospects
down to 13.500‐13.900 bb, THEN projected U.S. corn ending stocks in “new crop” MY 2018/10 would likely
decline to 1.250‐1.400 bb with some price rationing of usage (Table 1a). In this situation, percent (%) ending
stocks‐to‐use likely fall below 10% stocks/use, with U.S. corn prices moving above $4.00 toward $4.35‐$4.50
per bushel. This point is further discussed in Section 3 that follows, where alternative scenarios and outcomes
for U.S. corn supply‐demand and prices are presented for “new crop” MY 2018/19.
3. Alternative KSU Supply‐Demand & Price Forecast for “New Crop” MY 2018/19
Three alternative KSU‐Scenarios to the USDA’s forecast for U.S. corn supply‐demand and prices are
presented in what follows for “new crop” MY 2018/19 (Table 1a). These projections show how varying 2018
U.S. corn production and export / total use scenarios could affect U.S. corn supply‐demand and price outcomes
in “new crop” MY 2018/19. Probability‐weights are added to reflect judgements about how likely each
scenario is to occur in “new crop” MY 2018/19, i.e., during the September 1, 2018 through August 31, 2019
time period.
A ‐ KSU “Higher 2018 U.S. Corn Production” Scenario for “new crop” MY 2018/19: (25% probability):
Assumptions are as follows: 88.026 ma planted, 80.846 ma harvested, 176.0 bu/ac record yield (near the
2017 record high), 14.229 bb production, 16.381 bb total supplies, 14.666 bb total use, 1.715 bb ending
stocks, 11.69% S/U, & $3.75 /bu U.S. corn average price;
B ‐ KSU “Lower 2018 U.S. Corn Production” Scenario for “new crop” MY 2018/19: (15% probability):
Assumptions are as follows: 88.026 ma planted, 80.846 ma harvested, 165.0 bu/ac yield (near the 2009
low yield), 13.340 bb production, 15.492 bb total supplies, 14.205 bb total use, 1.287 bb ending stocks,
9.06% S/U, & $4.35 /bu U.S. corn average price.
C ‐ KSU “Higher 2018 U.S. Corn Exports” Scenario for “new crop” MY 2018/19: (15% probability):
Assumptions are as follows: 88.026 ma planted, 80.846 ma harvested, 174.0 bu/ac yield (equal to USDA
forecast yield), 14.040 bb production, 16.192 bb total supplies, 2.250 bb exports (up 250 mb from USDA),
14.865 bb total use, 1.327 bb ending stocks, 8.93% S/U, & $4.65 /bu U.S. corn average price.
6. World Corn Supply‐Demand – Both With & Without China
World Production: World corn production of 1,052.4 million metric tons (mmt) is projected for “new
crop” MY 2018/19, up 1.7% from 1,034.8 mmt in “old crop” MY 2017/18, but down 2.4% from the record high
Page | 4
of 1,078.4 mmt in MY 2016/17 (Figures 13‐14a, Table 2). The “new crop” 2018/19 marketing year begins
September 1, 2018 and continues through August 31, 2019. Production in Argentina of 41.0 mmt in 2019
would be a “rebound” from the short crop of 33.0 mmt projected in 2018, and equal again to 41.0 mmt
produced in 2017. Similarly, production in Brazil of 96.0 mmt in 2019 would also be a “rebound” from the
short crop of 85.0 mmt projected in 2018, but down from 98.5 mmt in 2017. The 2018 corn harvests for
Argentina and Brazil occur in the later half of “old crop” MY 2017/18, i.e., February through August 2018.
World Total Supplies: World corn total supplies of 1,245.1 mmt in “new crop” MY 2018/19 are forecast
to be down moderately from 1,262.7 mmt in “old crop” MY 2017/18, but up from the record high of 1,288.4
mmt in MY 2016/17.
World Exports: World corn exports of a 158.0 mmt are projected for “new crop” MY 2018/19, up 4.6%
from 151.1 mmt in “old crop” MY 2017/18, but down 1% from the record high of 159.7 mmt in MY 2016/17
(Table 3).
World Ending Stocks (% Stocks/Use): Projected World corn ending stocks of 154.7 mmt (14.2% S/U) in
“new crop” MY 2018/19 are down 19.7% from 192.7 mmt (18.0% S/U) in “old crop” MY 2017/18, down 32.1%
from the record high 227.9 mmt (21.5% S/U) in MY 2016/17, and 210.0 mmt (21.2% S/U) in MY 2015/16
(Figure 13‐14a, Tables 8‐9). Projected Foreign (Non‐U.S.) corn ending stocks of 114.6 mmt (13.1% S/U) in
“new crop” MY 2018/19, is down 16.5% from 139.3 mmt (16.5% S/U) in “old crop” MY 2017/18, and is down
from 17.7% from 169.3 mmt (20.0% S/U) in MY 2016/17.
World‐Less‐China Ending Stocks (% Stocks/Use): An alternative view of the World corn supply‐
demand is presented if Chinese corn usage and ending stocks are isolated from the World market (Figures
14b‐c, Tables 7‐9). “World‐Less‐China” corn ending stocks are projected to be 94.19 mmt (11.2% S/U) in “new
crop” MY 2018/19, down from 113.1 mmt (13.6% S/U) in “old crop” MY 2017/18, and down from 127.2 mmt
(15.4% S/U) in MY 2016/17. These figures show that World stocks‐to‐use of corn less China’s direct influence
are projected to be 21% lower (i.e., 11.2% S/U for the “World‐Less‐China” versus 14.2% S/U for the “World”
overall in “new crop” MY 2018/19).
World versus China Ending Stocks: At the same time, these figures also show that Chinese ending
stocks of corn as proportion of the World total are declining – down from 52.8% in MY 2015/16, to 44.2% in
MY 2016/17, to 41.3% in “old crop” MY 2017/18, and now are projected to be 39.1% in “new crop” MY
2018/19 (Tables 2‐9). 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
eventually increase Chinese import demand for U.S. feedgrains if and when China has a severe short crop
situation and limited stockpiles available to meet domestic demand.
…
June 24, 2019
Grain Market Outlook
Status of Delayed U.S. Corn Production Prospects Through June 22nd
The U.S. Corn Belt states that have been hardest hit by wet weather, flooding and planting delays
for corn and other crops in 2019 have been Illinois, Indiana, Michigan, Ohio, South Dakota and
Wisconsin. Significant wet soil conditions and planting delays have also occurred in Iowa, Kansas,
Minnesota, Missouri, Nebraska, and Pennsylvania. This can be seen in the percent of corn emerged
through June 16th as reported by the USDA National Agricultural Statistical Service (NASS) (Table 2).
Percent of corn emerged may be a more accurate assessment of 2019 U.S. corn acreage and
production prospects at this time than percent planted – given questions about how prevented
plantings may be included in the former measure of planting progress.
The USDA reported that 92% of the 2019 corn crop in the 18 major states had been planted and
that 92% had emerged as of June 16th in its latest USDA NASS Weekly Crop Progress report (Table 2).
In these top 18 states this amounts to 70,674,400 acres emerged out of 85,350,000 acres forecast in
the March 28th USDA NASS Prospective Plantings report. Note that the upcoming USDA Acreage
report to be released on Friday, June 28th will provide an estimate of 2019 U.S. corn plantings on a
state and national basis, and will take the place of the March 28th USDA Prospective Plantings report
in these types of calculations.
Extended to the entire U.S., 82% emerged on 6/16/2019 would equal 76,251,860 acres planted
out of the USDA Prospective Plantings forecast for the U.S. of 92,792,000 acres of corn in year 2019.
Note that the USDA World Outlook Board had already lowered that forecast in its June 11th USDA
World Agricultural Supply and Demand Estimates (WASDE) report. Average U.S. corn emergence in
the 18 major states on June 16th over the 5‐year 2014‐2018 period was 99%, with 6/16/2019 corn
emergence being 17% and 6,620,900 acres behind in the 18 states, and an estimated 6,699,140 acres
behind in the U.S. in total.
3 …
September 6, 2017
Grain Market Outlook
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I. U.S. Wheat Market Situation & Outlook
August 10th USDA Crop Production & WASDE Reports
On August 10th the USDA World Agricultural Outlook Board (WAOB) released its August 2017 World
Agricultural Supply and Demand Estimates (WASDE) report – containing U.S. and World wheat supply‐
demand and price projections for the 2015/16, “old crop” 2015/16, and “new crop” 2017/18 marketing years
(MY) for wheat. “New crop” MY 2017/18 for U.S. wheat began on September 1, 2017 and will last through
August 31, 2018.
On September 12th the USDA will release its 2017 September Crop Production and WASDE reports.
However, any significant changes in USDA projections of 2017 supply changes are more likely to be released in
the September 30, 2017 the USDA 2017 Small Grains Annual Summary report to be released by the National
Agricultural Statistics Service (NASS) (https://www.nass.usda.gov/). This Small Grains Annual Summary report will
provide updated information on U.S. wheat acreage planted and harvested, yield and production by wheat
production class – by state and for the United States as a whole. Upon its release the 2017 Small Grains
Annual Summary Report will be available at the following web address:
https://usda.mannlib.cornell.edu/MannUsda/viewDocumentInfo.do?documentID=1268
On that same day (September 30th) the USDA will also release its quarterly Grain Stocks report – providing
information on all wheat stocks by position (on‐farm or off‐farm) for each state and for the entire United
States (https://usda.mannlib.cornell.edu/MannUsda/viewDocumentInfo.do?documentID=1079). The grain stocks estimates released on
September 30th will be used to calculate U.S. wheat livestock feed and residual usage in “old crop” MY 2017/18
– focusing on usage in the June‐August 2017 time period. These production and usage estimates will be used
by the USDA in its October 12th Crop Production and WASDE report projections of U.S. wheat production and
supply‐demand balances in the “new crop” 2017/18 marketing year.
CME Kansas Hard Red Winter Wheat DEC 2017 & JULY 2018 Futures
DECEMBER 2017 CME Kansas hard red winter wheat futures traded as low as $4.59 ½ on December 1,
2016, up to $5.30 ¾ on February 16, 2017, and down to $4.53 ¾ on April 25, 2017 before climbing to $6.02 on
July 5th. Since that early July 2017 high, DEC 2017 HRW wheat futures declined to a low of $4.20 on August
29th before closing at $4.45 on Tuesday, September 5th (Figure 1).
JULY 2018 CME Kansas HRW wheat futures followed a similar pattern – trading as low as $4.88 ½ on
December 7, 2016, up to $5.44 on February 16, 2017, and down to $4.90 on April 25, 2017 before climbing to
$6.23 on July 5th. Since that early July 2017 high, JULY 2017 HRW wheat futures declined to a low of $4.71 ¼
on August 29th before closing at $4.92 ¾ on Tuesday, September 5th (Figure 1).
The total futures carrying charge or “term spread” between DEC 2017 and JULY 2018 CME Kansas HRW
Wheat futures contracts on Tuesday, September 5th was $0.47 ¾ per bushel (i.e., $4.92 ¾ for JULY 2018 less
$4.45 for DEC 2017 Wheat), or $0.0682 per bushel per month. This compares to commercial storage charges in
Kansas grain elevators in the range of $0.04 to $0.05 /bu/mo – before interest, handling costs and/or quality
discounts.
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Given these futures carrying charges, commercial storage of wheat from DEC 2017 to JULY 2018 would at
least break even and/or cover costs – given that carry of $0.0682 /bu/mo is greater than $0.04‐$0.05 /bu/mo
storage cost. This will hold true IF local cash wheat basis levels would at least stay unchanged and not weaken
further over the December 2017 through July 2018 period.
Figure 1. DECEMBER 2017 & JULY 2018 CME Kansas Wheat Futures Daily Price Charts …
July 26, 2018
Grain Market Outlook
Looking forward, it is possible that Brazilian soybean producers may respond to the current high prices
they are receiving from Chinese purchases of their 2018 crop by sharply increasing their acreage and
production prospects for 2019. High soybean prices in Brazil have been brought on by the directed focus of
China upon purchasing South American soybeans at the exclusion of the U.S. during the current trade dispute.
It is possible if not likely that farmers in Brazil and Argentina will sharply increase 2019 soybean planted acres,
which with decent yields would result in an even larger 2019 soybean crop than would otherwise be expected
– and more pressure on World soybean market prices.
Planting of the South American soybean crop begins in late fall 2018 here in the United States. This means
that U.S. corn and soybean producers will have some amount of information on 2019 South American crop and
market prospects when they make crop planting decisions in late winter – early spring 2019 here in the United
States. All else being equal, anticipated 2019 South American acreage trends may lead U.S. farmers to lower
their 2019 U.S. soybean plantings and to raise their 2019 U.S. corn plantings.
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3. Kansas Cash Soybean Prices & Basis Bids
Cash soybean price bids on Wednesday, July 25th in Central at major terminal elevator locations were in
the range of $7.70 ¾ to $8.01 ¾ per bushel ($0.90 to $0.59 under AUGUST 2018). At Topeka and Atchison in
Northeast Kansas, cash prices ranged from $8.20 ¾ to $8.25 ¾ per bushel ($0.40 to $0.35 under AUGUST
2018). These Central and Northeast Kansas prices on July 25th are down substantially from $9.88 ‐ $9.93
($0.35 to $0.30 under JULY) on May 30th. Cash soybean bids at Kansas soybean processing plants in Emporia
and Wichita on July 25th ranged from $8.40 ¾ to $8.45 ¾ per bushel ($0.15 to $0.20 under AUGUST 2018) –
down substantially from May 30th when prices ranged from $9.86 ($0.37 under JULY) to $9.93 ($0.30 under).
In Western Kansas cash soybean bids at major grain elevators on July 25th ranged from $7.36 to $7.76 per
bushels ($1.30 to $$0.90 under AUGUST 2018), down substantially again from $8.88 ($1.35 under JULY 2018
futures) to $9.23 ($1.00 under) on May 30th.
4. South American Export Competition in “Old Crop” MY 2017/18
Soybean market signals from South American export competitors Argentina, Brazil and Paraguay have
improved in recent months as a result of the U.S.‐China trade dispute (Figure 14). Serious drought had caused
Argentina soybean production to decline by 32.7% from a USDA estimate of 55.0 million metric tons (mmt) in
2017 down to 37.0 mmt in 2018, and cut projected Argentine soybean exports by 55.9% to 3.1 mmt in the “old
crop” 2017/18 marketing year (MY) ending August 31st (Tables 2 & 3). Argentina soybean meal exports are
projected to be 11.7% lower (27.65 mmt) in MY 2017/18, down from 31.3 mmt in MY 2016/17.
However, Brazilian soybean production is projected to be higher – offsetting Argentina’s declines to a
degree. Brazil is projected by the USDA to produce a record high 119.5 mmt of soybeans in year 2018, up 4.3%
from the previous record of 114.5 mmt in year 2017. Brazilian soybean exports are forecast to be 74.65 mmt
in MY 2017/18 (ending August 31st), up 18.2% from 63.1 mmt in MY 2016/17 (Tables 2 & 3). Brazil soybean
meal exports are projected to be 14.1% higher (15.7 mmt) in MY 2017/18, up from 13.8 mmt in MY 2016/17.
Paraguay soybean production is projected to be down marginally – providing a neutral influence to the
market. Paraguay is projected by the USDA to produce 10.0 mmt of soybeans in year 2018 – down marginally
from 10.2 mmt in year 2017. Paraguay soybean exports are forecast to be 6.25 mmt in MY 2017/18 (ending
August 31st), up 2.0% from 6.13 mmt in MY 2016/17 (Tables 2 & 3).
These three South American countries are the main competition in global soybean export markets for the
United States. Argentina, Brazil and Paraguay are forecast to comprise 55.2% (84.0 mmt) of forecast World
soybean exports (152.2 mmt) in the “old crop” 2017/18 marketing year (MY). The U.S. is projected to make up
37.3% (56.7 mmt) of World soybean exports for MY 2017/18, with other countries making up the remaining
7.55% (11.5 mmt) (Table 3).
The trade dispute between the U.S. and China has “pushed” Chinese soybean export purchases toward
Brazil and away from the U.S. at least temporarily until the matter is either settled OR exportable South
American supplies are eventually no longer available in fall 2018. There has been both negative and positive
news coming from these negotiations to date, with final agreements or lack there‐of still to come.
Page | 4
5. U.S. Soybean Supply‐Demand Projections for “Old Crop” MY 2017/18
In the July 12th USDA WASDE report the USDA projected “old crop” MY 2017/18 soybean Total Supplies to
be up marginally from earlier WASDE reports at 4.715 billion bushels (bb) (Table 1 and Figure 6).
Continued strength in U.S. soybean crush resulting from demand for soybean meal for domestic and
foreign livestock feeding has supported domestic U.S. soybean demand (Table 1, Figures 7 & 9ab). Projected
U.S. soybean crush of 2.030 bb in “old crop” MY 2017/18 is a record high – up 15 mb from June and up 129 mb
from MY 2016/17. Strong crush of U.S. soybeans is related directly to strong demand for U.S. soybean meal.
Projected exports of U.S. soybean meal of a record high 13.500 million short tons (mst) in “old crop” MY
2017/18 ending on September 30th are up from 11.580 mst last year – up from the previous record of 13.107
mmt in MY 2014/15. Strong U.S. soybean meal exports in “old crop” MY 2017/18 are a direct result of
shortfalls in Argentina soybean production and soybean meal exports due to drought conditions in early 2018,
and possibly from the U.S.‐China trade dispute and the 25% Chinese tariffs on U.S. soybean imports.
The USDA’s World Agricultural Supply and Demand Estimates (WASDE) report monthly projections of U.S.
soybeans exports for “old crop” MY 2017/18 have declined by nearly 80 mb since January 2018 – down to a
projection of 2.085 bb (while up 20 mb from June) (Table 1, Figures 7 & 9ab). This forecast of 2.085 bb for the
current marketing year ending on August 31st is still the 2nd highest on record, but down from the record high
of 2.174 bb in U.S. soybean exports a year earlier.
Seed usage of U.S. soybeans is projected to be 104 mb in “old crop” MY 2017/18, with Residual use at 32
mb – both down marginally from MY 2016/17.
Total Use of U.S. soybeans was projected to be a record high of 4.251 bb in “old crop” MY 2017/18 – up
from the past record of 4.214 bb in MY 2016/17 (Table 1, Figures 7 & 9ab).
As a result of these supply and use projections for “old crop” MY 2017/18, ending stocks are projected to
be the 2nd highest on record at 465 mb (down 40 mb from June) with percent ending stocks‐to‐use of 10.94% –
both measures being up from 302 mb (7.17% S/U) in MY 2016/17 (Table 1, Figures 9ab & 10‐11). The record
high occurred in MY 2006/07, with 574 mb ending stocks and 18.62% ending stocks‐to‐use.
United States’ soybean prices for “old crop” MY 2017/18 are projected to average $9.35 /bu – down from
$9.47 in MY 2016/17, and comparable to $8.95 /bu in MY 2015/16 (Table 1, Figures 10‐11).
6. U.S. Soybean Supply‐Demand Projections for “New Crop” MY 2018/19
The USDA provided a forecast of U.S. soybean supply, demand, and prices for “new crop” MY 2018/19 In
the July 12th USDA WASDE report. Based on 2018 U.S. soybean production projections 88.557 million acres
(ma) planted, 88.862 ma harvested, and 2018 U.S. soybean average yields of 48.5 bu/ac., the USDA forecast
2018 U.S. soybean production to be 4.310 bb. This 2018 forecast of 4.310 bb would be down from the record
high of 4.392 bb in 2017, and the 2nd highest amount of 4.296 bb in 2016 (Tables 1a‐b, Figures 4‐5‐6).
Total Supplies of U.S. soybeans in “new crop” MY 2018/19 are forecast to be a record high 4.800 bb, based
on 465 mb in beginning stocks, 4.310 bb in production, and 25 mb in imports. This amount is up from the
previous record highs of 4.715 bb and 4.515 bb in U.S. soybean Total Supplies in “old crop” MY 2017/18 and
MY 2016/17, respectively (Tables 1a‐b, Figure 6).
Page | 5
Soybean crush in “new crop” MY 2018/19 is forecast to be a new record high of 2.045 bb (up 45 mb from
June) – to be driven by expected ongoing domestic usage for livestock feed and sharply higher U.S. soybean
meal exports (Table 1a‐b, Figures 7 & 9ab). This would be up 15 mb in U.S. soybean crush from the previous
record of 2.030 bb in “old crop” MY 2017/18.
Exports of U.S. soybeans in “new crop” MY 2018/19 are forecast to decline 45 mb to 2.040 bb – down 250
mb from the June WASDE as a result of the expected impact of U.S.‐China trade tensions (Figures 7‐9). A total
of 361.2 mb of U.S. soybeans have been purchased for shipment in the “new crop” 2018/19 marketing year,
beginning on September 1, 2018. This amount of pre‐sales equals 17.7% of the USDA’s projection of 2.040 bb
in U.S. soybean exports in “new crop” MY 2018/19.
Seed usage of U.S. soybeans is projected to be 103 million bushels (mb) in “new crop” MY 2018/19, with
Residual use forecast at 32 mb – both essentially equal to “old crop” MY 2017/18 (Table 1a‐b, Figures 9ab).
Total Use is projected to be a near‐record high of 4.220 bb – down 205 mb from June, and down from the
previous record high of 4.251 bb last year (Table 1a‐b, Figure 9b).
As a result of these supply and use projections for “new crop” MY 2018/19, ending stocks are projected to
be 580 mb (up 195 mb from June) with percent ending stocks‐to‐use of 13.74% – both up from 465 mb
(10.94% S/U) in “old crop” MY 2017/18 (Tables 1a‐b, Figures 9ab & 10‐11). United States’ soybean prices for
“new crop” MY 2018/19 are projected in the range of $8.00‐$10.50 (midpoint = $9.25 /bu) – all being down
$0.75 /bu from the June WASDE report, and comparable to the midpoint projection of $9.35 /bu in “old crop”
MY 2017/18. This scenario is given a 50% likelihood of occurring by KSU Extension Agricultural Economist D.
O’Brien.
7. Alternative KSU Soybean Forecast Scenarios for “New Crop” MY 2018/19
Three alternative KSU‐Scenarios to the USDA’s forecast for U.S. soybean supply‐demand and prices are
presented for “new crop” MY 2018/19 (Table 1b, Figure 10). These projections show how varying 2018 U.S.
soybean production and use scenarios could affect U.S. soybean supply‐demand and price outcomes in “new
crop” MY 2018/19. Probability‐weights are added to reflect judgements about how likely each scenario is to
occur in “new crop” MY 2018/19, i.e., during the September 1, 2018 through August 31, 2019 time period.
#1 ‐ KSU “Lower 2018 U.S. Soybean Exports” Scenario for “new crop” MY 2018/19: (20% probability):
Assumptions: 88.557 ma planted, 88.862 ma harvested, 48.5 bu/ac yield, 4.310 bb production, 4.800 bb
total supplies, 2.045 bb domestic crush, 1.890 bb exports (down 150 mb from USDA’s forecast), 4.070 bb
total use, 730 mb ending stocks, 17.94% S/U, & $7.75 /bu U.S. soybean average price;
#2 ‐ KSU “Large 2018 U.S. Soybean Production” Scenario for “new crop” MY 2018/19: (15% probability):
Assumptions: 88.557 ma planted, 88.862 ma harvested, 51.0 bu/ac yield (near the record high in year
2016 of 52.0 bu/ac), 4.532 bb production, 5.022 bb total supplies, 2.045 bb domestic crush, 2.150 bb
exports (up 110 mb from USDA), 4.330 bb total use, 692 mb ending stocks, 15.98% S/U, & $8.25 /bu U.S.
soybean average price;
#3 ‐ KSU “Small 2018 U.S. Soybean Production” Scenario for “new crop” MY 2018/19: (15% probability):
Assumptions are: 88.557 ma planted, 88.862 ma harvested, 46.0 bu/ac yield (closer to recent lows of 40‐
44 bu /ac in years 2011‐2013), 4.088 bb production, 4.578 bb total supplies, 1.950 bb domestic crush,
2.000 bb exports, 4.110 bb total use, 468 mb ending stocks, 11.38% S/U, & $9.50 /bu U.S. soybean price;
Page | 6
8. World Soybean Supply‐Demand Prospects
World soybean production of a record high 359.5 million metric tons (mmt) is projected for “new crop” MY
2018/19, up 6.8% from 336.7 mmt in “old crop” MY 2017/18, and up 3.3% from the current record high of
348.1 mmt in MY 2016/17 (Figure 13, Table 2). The “new crop” 2018/19 marketing year begins September 1,
2018 and continues through August 31, 2019. World soybean total supplies of 455.5 mmt in “new crop” MY
2018/19 are forecast to be up 5.1% from 433.4 mmt in “old crop” MY 2017/18, and up 6.3% from 428.6 mmt in
MY 2016/17.
World soybean exports of a 157.3 mmt are projected for “new crop” MY 2018/19, up 3.0% from 152.2
mmt in “old crop” MY 2017/18, and up 6.8% from 147.35 mmt in MY 2016/17 (Table 3). China would be the
key World soybean importer in the coming marketing year, and shows little sign of abating yet in their annual
soybean usage or import increases (Table 4, Figure 15).
Projected World soybean ending stocks of a record high 98.3 mmt (27.7% S/U) in “new crop” MY 2018/19
are up 2.3% from 96.0 mmt (28.3% S/U) in “old crop” MY 2017/18, up from the previous record high 96.7 mmt
(29.7% S/U) in MY 2016/17, and 78.0 mmt (25.8% S/U) in MY 2015/16 (Figures 13 & 16, Tables 8‐9).
Projected Foreign (Non‐U.S.) soybean ending stocks of 82.5 mmt (22.5% S/U) in “new crop” MY 2018/19,
are down 1.1% from 83.4 mmt (22.2% S/U) in “old crop” MY 2017/18, and is down from 88.5 mmt (24.5% S/U)
in MY 2016/17 (Tables 8‐9).
…
October 31, 2018
Grain Market Outlook
decisions in late winter – early
spring 2019 here in the United States. All else being equal, anticipated 2019 South American acreage trends
may lead U.S. farmers to lower their 2019 U.S. soybean plantings and to raise their 2019 U.S. corn plantings.
2. Other Factors to Consider in Soybean Market Outlook
Prior to the escalation of the U.S.‐China trade dispute, U.S. soybean market prospects where described as
“neutral‐to‐cautiously optimistic” for the “new crop” 2018/19 marketing year. Now with the uncertainty and
potential negative impacts of 25% soybean import tariffs by China against U.S. soybeans, and a record large
2018 U.S. soybean crop being harvested, the “narrative consensus opinion” of the market has turned
pessimistic price‐wise, which has been reflected in “new crop” NOVEMBER 2018 Soybean futures (Figures
15abcd).
NOV 2018 Soybean futures declined from a high of $10.43 ¾ on May 30th down to a low of $8.12 ¼ per
bushel on September 18th (Figure 1). Since then, NOV 2018 Soybean futures have increased to a high of $8.92
on October 15th before declining again to a close of $8.33 ½ on Tuesday, October 30th.
3. Kansas Cash Soybean Prices & Basis Bids
Cash soybean price bids on Tuesday, October 30th in Central Kansas at major terminal elevator locations
were in the range of $7.04 ½ to $7.23 ½ per bushel ($1.29 to $1.10 under NOV 2018 CME soybean futures). At
Topeka and Atchison in Northeast Kansas, cash prices were both at $7.58 ½ per bushel ($0.75 under NOV
2018). These Central and Northeast Kansas prices on October 30th are down substantially from $9.88 ‐ $9.93
Page | 3
($0.35 to $0.30 under JULY 2018 soybean futures) on May 30th. Cash soybean bids at Kansas soybean
processing plants in Emporia and Wichita on October 30th ranged from $7.63 ½ to $7.68 ½ per bushel ($0.70 to
$0.65 under NOV 2018) – down substantially from May 30th when prices ranged from $9.86 ($0.37 under JULY
2018) to $9.93 ($0.30 under) (Figure 2).
In Western Kansas cash soybean bids at major grain elevators on October 30th ranged from $6.85 to $7.09
per bushel ($1.49 to $1.25 under NOV 2018), down substantially again from $8.88 ($1.35 under JULY 2018
futures) to $9.23 ($1.00 under) on May 30th.
4. Reviewing South American Export Competition in “Old Crop” MY 2017/18
Soybean market signals from South American export competitors Argentina, Brazil and Paraguay have
improved in recent months as a result of the U.S.‐China trade dispute (Figures 13‐14). Serious drought had
caused Argentina soybean production to decline by 31.3% from a USDA estimate of 55.0 million metric tons
(mmt) in 2017 down to 37.8 mmt in 2018, and cut projected Argentine soybean exports by 70.1% to 2.1 mmt
in the “old crop” 2017/18 marketing year (MY) which ended on August 31st. Argentina soybean meal exports
were 19.4% lower (25.25 mmt) in “old crop” MY 2017/18, down from 31.3 mmt in MY 2016/17.
However, Brazilian soybean production was higher – offsetting Argentina’s declines to a degree. Brazil is
estimated by the USDA to have produced a record high 119.8 mmt of soybeans in year 2018, up 4.5% from the
previous record of 114.6 mmt in year 2017. Brazilian soybean exports are estimated to have been 76.2 mmt in
“old crop” MY 2017/18 (ending August 31st), up 20.7% from 63.1 mmt in MY 2016/17. Brazil soybean meal
exports are projected to be 16.8% higher (16.1 mmt) in MY 2017/18, up from 13.8 mmt in MY 2016/17.
Paraguay soybean production is estimated to be down marginally – providing a neutral influence to the
market. Paraguay is projected by the USDA to have produced 9.81 mmt of soybeans in year 2018 – down
moderately from 10.34 mmt in year 2017. Paraguay soybean exports are estimated to have been 6.25 mmt in
“old crop” MY 2017/18 (ending August 31st), up 2.0% from 6.13 mmt in MY 2016/17.
These three South American countries are the main competition in global soybean export markets for the
United States. Argentina, Brazil and Paraguay are forecast to comprise 54.0% (76.3 mmt) of estimated World
soybean exports (147.4 mmt) in “old crop” MY 2017/18. The U.S. is estimated to have made up 37.8% (57.95
mmt) of World soybean exports for MY 2017/18, with other countries making up the remaining 8.2% (13.15
mmt) (Table 3).
The trade dispute between the U.S. and China has “pushed” Chinese soybean export purchases toward
Brazil and Argentina and away from the U.S. at least temporarily until the matter is either settled OR
exportable South American supplies are eventually no longer available in fall 2018. There has been both
negative and positive news coming from these negotiations to date, with any final agreement still to come.
5. U.S. Soybean Supply‐Demand Projections for “New Crop” MY 2018/19
The USDA provided a forecast of U.S. soybean supply, demand, and prices for “new crop” MY 2018/19 In
the October 11th USDA WASDE report. Based on 2018 U.S. soybean production projections 89.145 million
acres (ma) planted, 88.348 ma harvested, and 2018 U.S. soybean average yields of 53.1 bu/ac., the USDA
forecast 2018 U.S. soybean production to be 4.690 bb. This 2018 forecast of a record high 4.690 bb in U.S.
soybean production would be up from the previous record of 4.411 bb in 2017, and the 2nd highest amount of
4.296 bb in 2016 (Table 1, Figures 4‐5‐6).
Page | 4
Total Supplies of U.S. soybeans in “new crop” MY 2018/19 are forecast to be a record high 5.153 bb, based
on 438 mb in beginning stocks, 4.690 bb in production, and 25 mb in imports. This amount is up from the
previous record highs of 4.734 bb and 4.515 bb in U.S. soybean Total Supplies in “old crop” MY 2017/18 and
MY 2016/17, respectively (Table 1, Figure 6).
Soybean crush in “new crop” MY 2018/19 is forecast to be a new record high of 2.070 bb – to be driven by
expected ongoing domestic usage for livestock feed and ongoing strength in U.S. soybean meal exports (Table
1, Figures 7 & 9ab). This would be up 15 mb in U.S. soybean crush from the previous record of 2.055 bb in “old
crop” MY 2017/18.
Exports of U.S. soybeans in “new crop” MY 2018/19 are forecast to be 2.060 bb – down previous record
highs of 2.129 bb in “old crop” MY 2017/18 and 2.166 bb in MY 2016/17 (Figures 8‐9‐10). See the previous
discussion on U.S. soybean export prospects in section #1 above.
Seed usage of U.S. soybeans is projected to be 103 million bushels (mb) in “new crop” MY 2018/19, with
Residual use forecast at 34 mb. While seed use of 103 mb is forecast to be down slightly from 104 mb in “old
crop” MY 2017/18, residual use of 34 mb is up from 8 mb in “old crop” MY 2017/18 (Table 1, Figures 9ab).
Total Use is projected to be a near‐record high of 4.268 bb – down 28 mb from the previous record high of
4.296 bb last year (Table 1, Figures 9ab).
As a result of these supply and use projections for “new crop” MY 2018/19, ending stocks are projected to
be a record high 885 mb, with percent ending stocks‐to‐use of 20.74% – both up from 438 mb (10.20% S/U) in
“old crop” MY 2017/18 (Table 1, Figures 9ab & 10ab‐11).
United States’ soybean prices for “new crop” MY 2018/19 are projected in the range of $7.35‐$9.85
(midpoint = $8.60 /bu) – with the midpoint projection being down $0.73 /bu from $9.33 /bu in “old crop” MY
2017/18 (Table 1, Figures 10ab‐11). This scenario is given a 60% likelihood of occurring by KSU Extension
Agricultural Economist D. O’Brien.
6. Alternative KSU Soybean Forecast Scenarios for “New Crop” MY 2018/19
Three alternative KSU‐Scenarios to the USDA’s forecast for U.S. soybean supply‐demand and prices are
presented for “new crop” MY 2018/19 (Table 1a, Figure 10). These projections show how varying 2018 U.S.
soybean export‐use and production scenarios could affect U.S. soybean supply‐demand and price outcomes in
“new crop” MY 2018/19. Probability‐weights are added to reflect judgements about how likely each scenario
is to occur in “new crop” MY 2018/19, i.e., during the September 1, 2018 through August 31, 2019 time period.
#1 ‐ KSU “Lower 2018 U.S. Soybean Exports” Scenario for “new crop” MY 2018/19: (15% probability):
Assumptions: 89.145 ma planted, 88.348 ma harvested, 53.1 bu/ac yield, 4.690 bb production, 5.153 bb
total supplies, 2.070 bb domestic crush, 1.870 bb exports (down 200 mb from USDA’s forecast), 4.068 bb total use
(down 200 mb from USDA’s forecast), 1.085 bb ending stocks (up 200 mb from USDA’s forecast), 26.67% Stocks/Use (up
from the USDA’s forecast of 20.74%), & $8.40 /bu U.S. soybean average price (down from the USDA’s forecast of $8.60);
#2 ‐ KSU “Higher 2018 U.S. Soybean Exports” Scenario for “new crop” MY 2018/19: (10% probability):
Assumptions: 89.145 ma planted, 88.348 ma harvested, 53.1 bu/ac yield, 4.690 bb production, 5.153 bb
total supplies, 2.070 bb domestic crush, 2.270 bb exports (up 200 mb from USDA’s forecast), 4.468 bb total use
(up 200 mb from USDA’s forecast), 685 mb ending stocks (down 200 mb from USDA’s forecast), 15.33% Stocks/Use
Page | 5
(down from the USDA’s forecast of 20.74%), & $9.00 /bu U.S. soybean average price (up from the USDA’s forecast of
$8.60);
#3 ‐ KSU “Low 2018 U.S. Soybean Production” Scenario for “new crop” MY 2018/19: (15% probability):
Assumptions: 89.145 ma planted, 88.348 ma harvested, 50.0 bu/ac yield (down from the USDA’s forecast of 53.1
bu/ac), 4.417 bb production (down 273 mb from USDA’s forecast), 4.880 bb total supplies (down 273 mb from USDA’s
forecast), 2.070 bb domestic crush, 2.060 bb exports, 4.268 bb total use, 612 mb ending stocks (down 273 mb
from USDA’s forecast), 14.34% Stocks/Use (down from the USDA’s forecast of 20.74%), & $9.05 /bu U.S. soybean
average price (up from the USDA’s forecast of $8.60).
7. World Soybean Supply‐Demand Prospects
World soybean production of a record high 369.48 million metric tons (mmt) is projected for “new crop”
MY 2018/19, up 9.5% from 337.45 mmt in “old crop” MY 2017/18, and up 6.1% from the current record high of
348.12 mmt in MY 2016/17 (Figure 13). The “new crop” 2018/19 marketing year begins September 1, 2018
and continues through August 31, 2019. World soybean total supplies of 466.13 mmt in “new crop” MY
2018/19 are forecast to be up 7.4% from 434.13 mmt in “old crop” MY 2017/18, and up 8.8% from 428.54
mmt in MY 2016/17.
World soybean exports of a 157.40 mmt are projected for “new crop” MY 2018/19, up 2.8% from 153.12
mmt in “old crop” MY 2017/18, and up 6.8% from 147.36 mmt in MY 2016/17 (Figure 13). China is expected to
continue to be the key World soybean importer in the coming marketing year, although there are signs that
the Chinese are seeking to moderate their annual soybean usage or import increases through changes in
livestock feeding approaches.
Projected World soybean ending stocks of a record high 110.04 mmt (31.17% Stocks/Use) in “new crop”
MY 2018/19 are up from 96.65 mmt (28.70% S/U) in “old crop” MY 2017/18, up from the previous record high
96.68 mmt (29.4% S/U) in MY 2016/17, and 80.42 mmt (25.62% S/U) in MY 2015/16 (Figures 13 & 16).
Projected Foreign (Non‐U.S.) soybean ending stocks of 85.96 mmt (21.8% S/U) in “new crop” MY 2018/19,
are down 1.1% from 84.73 mmt (22.7% S/U) in “old crop” MY 2017/18, and is down from 88.47 mmt (24.5%
S/U) in MY 2016/17.
…