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September 19, 2017
Grain Market Outlook
0%‐16.0%. Drought conditions in the northern plains states of North
Dakota, South Dakota, and Montana as well as parts of Iowa and Illinois may ultimately have a negative impact
on 2017 U.S. corn production, as may carryover impacts from delayed plantings in Indiana earlier in Spring
2017. Periods of high temperatures that may have affected corn pollination in Corn Belt states in the first half
of July. But the final impact of these factors likely will not be known until the 2017 harvest actually occurs.
2. Kansas Cash Corn Prices & Basis Bids
In Western Kansas on Monday, September 18th cash corn bids at major grain elevators ranged from $3.15
($0.37 under DEC futures) to $3.42 ($0.10 under DEC futures), and ranged from $2.91 ½ ($0.60 under DEC) to
$3.26 ½ ($0.25 under DEC) in Central Kansas. Even though Kansas corn prices have remained low in recent
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weeks, these prices still are sharply higher than in Oct‐Dec 2016 when bids statewide had fallen below $3.00
per bushel – down to $2.66‐$2.96 on December 23rd. These prices were still above marketing loan rates for
corn across the state, with corn loans 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 $3.11 ½ on
September 18th, actually down from the range of $3.26‐$3.28 per bushel on 12/23/2016. Cash corn bids at
Kansas ethanol plants on September 18th ranged from $3.19 ¾ ($0.35 under DEC) to $3.69 ¾ ($0.15 over DEC)
– indicating continuing strength in ethanol demand for corn in Kansas and nationwide. While the “large supply
and tight storage availability” situation still predominates in local Kansas grain markets, it continues to be
positive that Kansas cash corn prices have avoided falling down to USDA loan rate levels.
3. Major Corn Market Considerations for Fall 2017 through Spring 2018
First, large beginning stocks of U.S. corn coming into “new crop” MY 2017/18 have been a “mitigating”
factor limiting the response of the corn market to 2017 summer‐early fall production risk. The corn market has
been less responsive to any 2017 U.S. corn production threats since beginning stocks for “new crop” MY
2017/18 have been projected to be near 2.335 bb rather than down to 1.000 bb.
Second, it is anticipated that low prices for U.S. corn will continue to help maintain strong usage for
domestic U.S. ethanol and wet milling production, as well as livestock feeding through at least spring 2018.
Third, at least moderate continued strength is expected in U.S. corn exports due to low U.S. corn prices
and also to a moderate weakening of the U.S. dollar against other World currencies. Exports of U.S. corn are
expected to continue at a “decent” pace of 1.850 bb for “new crop” MY 2017/18 even though South American
corn production will continue to be a competitive factor in World trade through at least the end of 2017. Also,
preliminary forecasts for 2018 are that Brazilian corn acreage will be lower due to low prices and poor
profitability in 2017 – which may have a positive effect on U.S. corn exports and price prospects later in 2018.
Fourth, a continuing threat exists of U.S. and Foreign economic and/or financial system disruptions that
could impact grain, energy, and other commodity markets in 2017‐2018. World geo‐political events could
provide “shocks” to U.S. and World energy and grain markets which could in turn impact grain prices in either
direction depending on the circumstances and the countries involved and their role in global corn export trade.
4. USDA Supply‐Demand & Price Forecast for “New Crop” MY 2017/18
With the USDA’s continuing projection of 2017 U.S. corn plantings at 90.886 million acres or ‘ma’ (down
3.118 ma from 2016), harvested acres of 83.496 ma (down 3.252 ma), and projected yields of 169.9 bu/ac (vs
the record high of 174.6 in 2016), 2017 U.S. corn production is forecast to be 14.184 bb – down from the
record high of 15.148 bb in 2016.
The USDA forecast “new crop” MY 2017/18 total supplies to be 16.585 bb – down 355 mb from last year’s
record high. Total use is forecast at 14.250 bb – down 340 mb from last year’s record high. Ending stocks are
projected to be 2.235 bb (16.38% S/U) – down from 2.350 bb (16.11% S/U) in “old crop” MY 2016/17. United
States’ corn prices are projected to average $3.20 /bu (range of $2.80‐$3.60). This is down $0.15 /bu from the
midpoint estimate of $3.35 /bu from “old crop” MY 2016/17. This scenario is given a 60% likelihood of
occurring by KSU Extension Agricultural Economist D. O’Brien.
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5. Alternative KSU Supply‐Demand & Price Forecast for “New Crop” MY 2017/18
Three alternative KSU‐Scenarios for U.S. corn supply‐demand and prices are presented for “new crop” MY
2017/18. Each forecast scenario presents the likelihood of lower U.S. corn acreage, yields and production than
projected by the USDA in the September 12, 2017 WASDE report for “new crop” MY 2017/18.
A ‐ KSU “New Crop” MY 2017/18 Scenario #1) “167.3 bu/ac – 13.930 bb” Scenario (35% probability) assumes:
90.753 ma planted, 83.261 ma harvested, 167.3 bu/ac trend yield, 13.930 bb production, 16.330 bb total
supplies, 14.215 bb total use, 2.115 bb ending stocks, 14.88% S/U, & $3.45 /bu U.S. corn average price;
B ‐ KSU “New Crop” MY 2017/18 Scenario #2) “164.0 bu/ac – 13.655 bb” Scenario (5% probability) assumes:
90.753 ma planted, 83.261 ma harvested, 164.0 bu/ac yield, 13.655 bb production, 16.055 bb total
supplies, 14.095 bb total use, 1.960 bb ending stocks, 13.91% S/U, & $3.60 /bu U.S. corn average price;
C ‐ KSU “New Crop” MY 2017/18 “Wildcard” Scenario #3) “167.3 bu/ac – 13.930 bb” Scenario (???% prob.)
assumes: 90.753 ma planted, 83.261 ma harvested, 167.3 bu/ac trend yield, 13.930 bb production, 16.330
bb total supplies, 13.935 bb total use, 2.395 bb ending stocks, 17.19% S/U, & $3.00 /bu U.S. corn average;
Note: even with moderate reductions in 2017 U.S. corn production as represented in the KSU Scenarios A, B
and C above, the presence of large beginning stocks of 2.350 bb in “new crop” MY 2017/18 limit the “tightness”
of corn supply‐demand balances, and hinders any upward price responses.
5. World Corn Supply‐Demand – With & Without China
World corn production of 1,032.6 million metric tons (mmt) is projected for “new crop” MY 2017/18, down
3.6% from the record high of 1,071.2 mmt in “old crop” MY 2016/17, but still up 6.5% from 969.6 mmt in MY
2015/16. Near record World corn total supplies of 1,259.6 mmt are projected for “new crop” MY 2017/18,
down marginally from the record high of 1,285.1 mmt in “old crop” MY 2016/17, but up from 1,179.2 mmt in
MY 2015/16.
World corn exports of a 150.6 mmt are projected for “new crop” MY 2017/18, down 8.9% from the record
high of 165.3 mmt in “old crop” MY 2016/17, and up 25.8% from 119.7 mmt in MY 2015/16. Projected World
corn ending stocks of 202.5 mmt (19.2% S/U) in “new crop” MY 2017/18 are down from the record high 227.0
mmt (21.4% S/U) in “old crop” MY 2016/17, and from 213.9 mmt (22.2% S/U) in MY 2015/16.
An alternative view of the World corn supply‐demand is presented if Chinese corn usage and ending stocks
are isolated from the World market. “World‐Less‐China” corn ending stocks are projected to be 121.2 mmt
(14.8% S/U) in “new crop” MY 2017/18, down from 125.7 mmt (15.2% S/U) in “old crop” MY 2016/17, but up
from 103.1 mmt (13.4% S/U). These figures show that World stocks‐to‐use of corn less China’s direct influence
are projected to be down approximately 23% (i.e., 14.8% S/U for the “World Less China” versus 19.2% S/U for
the “World” overall in “new crop” MY 2017/18).
At the same time, these figures also show that Chinese ending stocks of corn as proportion of the World
total are declining – down from 51.8% in MY 2015/16, to 44.6% in “old crop” MY 2016/17, and down to 40.1%
in “new crop” MY 2017/18. The deliberate actions in recent years ‐ taken by the Chinese government to
reduce feedgrain stockpiles – is impacting the relative amount of World total corn stocks they hold.
…
December 21, 2017
Grain Market Outlook
e U.S. corn market is the considerable “tightening up” that is forecast
for foreign (non‐U.S.) corn supply‐demand balances in the “new crop” 2017/18 marketing year. If this occurs,
it would lead to larger U.S. corn export shipments in early 2018 than are currently happening, and support
higher U.S. corn prices in Spring‐Summer 2018 than are represented by 2018 Corn futures contracts.
2. Kansas Cash Corn Prices & Basis Bids
In Western Kansas on Wednesday, December 20th cash corn bids at major grain elevators ranged from
$2.96 ($0.53 under MARCH futures) to $3.37 ($0.12 under), and ranged from $3.01 ½ ($0.48 under) to $3.24 ¼
($0.25 under) in Central Kansas. Even though Kansas corn prices have remained low in recent weeks, these
prices still are still mostly higher than a year ago when bids statewide had fallen to $2.66‐$2.96 on December
23, 2016. These prices were still above marketing loan rates for corn across the state, with corn loans 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 $3.24 ¼ ‐ $3.31
¼ on December 20th, nearly equal to the range of $3.26‐$3.28 per bushel on 12/23/2016. Cash corn bids at
Kansas ethanol plants on December 20th ranged from $3.27 ½ ($0.20 under MARCH) to $3.74 ½ ($0.27 over
MARCH) – indicating continuing strength in ethanol demand for corn in Kansas and nationwide.
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3. Major Corn Market Considerations for Winter‐Spring 2018
First, the corn market is likely to be only moderately responsive to any early season 2018 U.S. corn
production threats since beginning stocks for “new crop” MY 2017/18 have been projected to be near 2.295
bb rather than down to 1.250‐1.500 bb. If no significant production risk emerges in summer 2018, then these
large “old crop” MY 2017/18 carryover supplies will continue to limit 2018 corn crop forward pricing prospects.
Second, low prices for U.S. corn will help maintain strong usage for domestic U.S. ethanol and wet milling
production, as well as livestock feeding through at least spring 2018 if not into the summer months.
Third, the USDA is projecting at least “moderate” continued strength in U.S. corn exports of 1.925 bb for
“new crop” MY 2017/18. United States’ corn export shipments have been “slow” to date in the current
marketing year. However, the USDA maintains its optimism for “new crop” MY 2017/18 U.S. corn exports
because of a) low U.S. corn prices, b) expectations of significantly tighter foreign stocks and percent (%)
stocks‐to‐use for corn, and c) the eventual “using up” of competing South American corn exports in early 2018.
Early forecasts are for 2018 Brazilian corn production to be 95 million metric tons (mmt) in this marketing
year with harvests lasting from February through May. Early forecasts are for 2018 Argentina corn production
to be 42 mmt in this marketing year with harvests lasting from March through May. However, dry conditions
may limit 2018 corn production in Argentina and southern Brazil – and subsequently support U.S. corn exports.
Fourth, a continuing threat exists of U.S. and Foreign economic and/or financial system disruptions that
could impact grain, energy, and other commodity markets in 2018. World geo‐political events could provide
“shocks” to U.S. and World energy and grain markets which could in turn impact grain prices in either direction
depending on the circumstances, the countries involved, and their role in global corn export trade.
4. USDA Supply‐Demand & Price Forecast for “New Crop” MY 2017/18
In the December 12th Crop Production reports, the USDA left unchanged its projections of a) projected
yields up to a record high of 175.4 bu/ac (vs the previous record of 174.6 in 2016), and b) 2017 U.S. corn
production up to 14.578 bb – down from the record high of 15.148 bb in 2016. The also USDA left unchanged
its forecast “new crop” MY 2017/18 total supplies to 16.922 bb – down marginally (20 mb) from last year’s
record high. Total use is forecast at 14.485 bb – raised 50 mb from November on higher ethanol use, but still
down 162 mb from last year’s record high. Ending stocks are projected to be a 2.437 bb (16.8% S/U) – up from
2.295 bb (15.7% S/U) in “old crop” MY 2016/17. United States’ corn prices are projected to average $3.20 /bu
(range of $2.85‐$3.55). This is down $0.16 /bu from $3.36 /bu from “old crop” MY 2016/17. This scenario is
given an 80% likelihood of occurring by KSU Extension Agricultural Economist D. O’Brien.
5. Alternative KSU Supply‐Demand & Price Forecast for “New Crop” MY 2017/18
Two alternative KSU‐Scenarios for U.S. corn supply‐demand and prices are presented for “new crop” MY
2017/18. These projections are to show how varying corn export outcomes could affect the USDA’s projection
in the December 9, 2017 WASDE report.
A ‐ KSU “Higher Exports” MY 2017/18 Scenario: “2.250 bb Exports” Scenario (10% probability) assumes:
90.348 ma planted, 82.890 ma harvested, 175.4 bu/ac trend yield, 14.539 bb production, 16.884 bb total
supplies, 2.250 bb exports, 14.785 bb total use, 2.099 bb ending stocks, 14.20% S/U, & $3.55 /bu U.S. corn
average price;
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B ‐ KSU “Lower Exports” MY 2017/18 Scenario: “1.800 bb Exports” Scenario (10% probability) assumes:
90.348 ma planted, 82.890 ma harvested, 175.4 bu/ac trend yield, 14.539 bb production, 16.884 bb total
supplies, 1.800 bb exports, 14.360 bb total use, 2.524 bb ending stocks, 17.58% S/U, & $3.20 /bu U.S. corn
average price;
6. USDA Supply‐Demand & Price Forecast for “Next Crop” MY 2018/19
In the November 28th Long Term Baseline projections, the USDA forecast for “next crop” MY 2018/19 that
2018 U.S. corn planted and harvested acres would equal 91.0 million acres (ma) and 83.7 ma, respectively,
both up from 90.429 ma planted and 83.119 ma harvested in 2017. Corn yields in 2018 are forecast at 173.5
bu/ac, down from the record high of 175.4 bu/ac in 2017. U.S. corn production is 2018 is projected to be
14.520 bb – down from 14.578 bb now projected for 2017.
The USDA forecast “new crop” MY 2017/18 total supplies to 17.007 bb – adjusted for changes in the
December WASDE report in MY 2017/18 ending stocks. Total use is forecast at 14.450 bb – down 35 mb from
this current marketing year. Ending stocks are projected to be a 2.557 bb (17.7% S/U) – up from 2.437 bb
(16.8% S/U) in “new crop” MY 2017/18. United States’ corn prices are projected to average $3.30 /bu – up
from $3.20 /bu in “new crop” MY 2017/18.
5. World Corn Supply‐Demand – With & Without China
World corn production of 1,044.8 million metric tons (mmt) is projected for “new crop” MY 2017/18, down
2.9% from the record of 1,074.8 mmt in “old crop” MY 2016/17, but still up 7.3% from 973.5 mmt in MY
2015/16. World corn total supplies of 1,272.1 mmt are down marginally from the record high 1,290.5 mmt in
“old crop” MY 2016/17, but up from 1,183.2 mmt in MY 2015/16.
World corn exports of a 151.6 mmt are projected for “new crop” MY 2017/18, down 7.6% from the record
high of 164.1 mmt in “old crop” MY 2016/17, and up 26.7% from 119.7 mmt in MY 2015/16. Projected World
corn ending stocks of 204.1 mmt (19.1% S/U) in “new crop” MY 2017/18 are down from the record high 227.3
mmt (21.4% S/U) in “old crop” MY 2016/17, and from 214.9 mmt (22.2% S/U) in MY 2015/16. Projected
Foreign (Non‐U.S.) corn ending stocks of 142.2 mmt (16.5% S/U) in “new crop” MY 2017/18 are down from
169.0 mmt (19.8% S/U) in “old crop” MY 2016/17, and from 170.8 mmt (23.1% S/U) in MY 2015/16.
An alternative view of the World corn supply‐demand is presented if Chinese corn usage and ending stocks
are isolated from the World market. “World‐Less‐China” corn ending stocks are projected to be 124.5 mmt
(15.0% S/U) in “new crop” MY 2017/18, down from 126.6 mmt (15.2% S/U) in “old crop” MY 2016/17, but up
from 104.1 mmt (13.9% S/U) in MY 2015/16. These figures show that World stocks‐to‐use of corn less China’s
direct influence are projected to be approximately 21% lower (i.e., 15.0% S/U for the “World‐Less‐China”
versus 19.1% S/U for the “World” overall in “new crop” MY 2017/18).
At the same time, these figures also show that Chinese ending stocks of corn as proportion of the World
total are declining – down from 51.5% in MY 2015/16, to 44.3% in “old crop” MY 2016/17, and down to 39.0%
in “new crop” MY 2017/18. The deliberate actions in recent years ‐ taken by the Chinese government to
reduce feedgrain stockpiles – is impacting the relative amount of World total corn stocks they hold. These
actions may increase Chinese import demand for both U.S. corn and grain sorghum.
…
March 15, 2018
Grain Market Outlook
ble “tightening up” that is forecast
for foreign (non‐U.S.) corn supply‐demand balances in the “old crop” 2017/18 marketing year. If this occurs, it
would lead to larger U.S. corn export shipments in spring‐early summer 2018 than are currently happening,
and support even higher U.S. corn prices in Spring‐Summer 2018 than are represented by MAY 2018 through
DEC 2018 Corn futures contracts.
2. Kansas Cash Corn Prices & Basis Bids
In Western Kansas on Wednesday, March 15th cash corn bids at major grain elevators ranged from $3.32
($0.55 under MAY 2018 futures) to $3.74 ($0.13 under), and ranged from $3.43 ¾ ($0.43 under) to $3.61 ¾
($0.25 under) in Central Kansas. These prices still are still much higher than a year ago when bids statewide
had fallen to $2.66‐$2.96 on December 23, 2016. These prices were still above marketing loan rates for corn
across the state, with corn loans 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 $3.65 ¾ ‐ $3.70
¾ on March 15th, up from the range of $3.26‐$3.28 per bushel on 12/23/2016. Cash corn bids at Kansas
ethanol plants on March 15th ranged from $3.73 ¾ ($0.15 under MAY) to $4.13 ¾ ($0.25 over MAY) –
indicating continuing strength in ethanol demand for corn in Kansas and nationwide.
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3. Major Corn Market Considerations for Winter‐Spring 2018
First, although the corn market is likely to be responsive to any early season 2018 U.S. corn production
threats, the anticipation of large beginning stocks of 2.000‐2.100 bb for “new crop” MY 2018/19 will likely
“mitigate” of “soften” the immediate price response of the market – more‐so than if beginning stocks were
down to 1.250‐1.500 bb. If no significant production risk emerges in summer 2018, then these large “old crop”
MY 2017/18 carryover ending stocks will limit 2018 corn crop forward pricing prospects.
Second, low prices for U.S. corn will help maintain strong usage for domestic U.S. ethanol and wet milling
production, as well as livestock feeding through at least spring 2018 if not into the summer months.
Third, the USDA has so far projecting at least “moderate” continued strength in U.S. corn exports of 1.900
bb for “new crop” MY 2017/18 – with this number likely increasing IF South American corn production
prospects continue to suffer. United States’ corn export shipments had been “slow” to date in the current
marketing year, but have increased markedly in recent weeks. The USDA maintains its optimism for “new
crop” MY 2018/19 U.S. corn exports because of a) low U.S. corn prices to date, b) expectations of significantly
tighter foreign stocks and percent (%) stocks‐to‐use for corn, and c) the eventual “using up” of competing
South American corn exports in spring 2018.
Current forecasts are for 2018 Brazilian corn production to be 94.5 million metric tons (mmt) in this
marketing year – versus 98.5 mmt last year ‐ with harvests lasting from February through May. However,
forecasts are for 2018 Argentina corn production to be 36.0 mmt in this marketing year – versus 41.0 mmt a
year ago ‐ with harvests lasting from March through May. The Argentina production figure is at risk to falling
further. To the degree that 2018 corn production in Argentina and southern Brazil is limited by crop weather
issues, there will likely be subsequent support U.S. corn export prospects.
Fourth, a continuing threat exists of U.S. and Foreign economic and/or financial system disruptions that
could impact grain, energy, and other commodity markets in 2018. World geo‐political events could provide
“shocks” to U.S. and World energy and grain markets which could in turn impact grain prices in either direction
depending on the circumstances, the countries involved, and their role in global corn export trade.
4. USDA Supply‐Demand & Price Forecasts
In the March 8th WASDE report, the USDA left unchanged its projections of a) 2017 U.S. corn production of
14.604 bb – down from the record high of 15.148 bb in 2016, and b) “old crop” MY 2017/18 total supplies of
16.947 bb – up marginally from a year earlier. Total use is forecast at 14.820 bb – raised 225 mb from the
February WASDE on prospects for a) higher ethanol use of 5.575 bb (raised 50 mb), and b) higher exports of
2.225 bb (raised 175 mb). Ending stocks are projected to be a 2.127 bb (14.35% Stocks/Use) – down 225 mb
from February, and down from 2.293 bb (15.65% S/U) in MY 2016/17. United States’ corn prices are projected
to average $3.35 /bu (range of $3.15‐$3.55). This is down $0.01 /bu from $3.36 /bu from MY 2016/17.
At the Agricultural Outlook Forum in Arlington, Virginia on February 23, 2018, the USDA forecast that a)
2018 U.S. corn production would be 14.390 bb – based on 90.0 million acres (ma) planted, 82.7 ma harvested,
and a yield of 174.0 bu. Total use is forecast at 14.520 bb – with projections of ethanol use at 5.650 bb (a
record high), non‐ethanol food seed and industrial use at 1.495 bb (also a record high), exports of 1.900 bb
(down 325 mb from the current marketing year), and feed and residual use of 5.475 mb (down 75 mb from this
year). After a KSU‐adjustment for lower beginning stocks based on the March 8th WASDE report, ending stocks
are projected to be a 2.047 bb (14.10% Stocks/Use) – with both being down moderately from “old crop” MY
2017/18 levels. United States’ corn prices are projected to average a KSU‐adjusted $3.45 /bu (up $0.05‐$0.10
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from this year). It is probable that the export projection for “new crop” MY 2018/19 may be raised in coming
months due to South American production problems – causing these ending stocks and % stocks‐to‐use
estimates to tighten further. This scenario is given a 50% likelihood of occurring by KSU Extension
Agricultural Economist D. O’Brien.
5. Alternative KSU Supply‐Demand & Price Forecast for “New Crop” MY 2018/19
Two alternative KSU‐Scenarios for U.S. corn supply‐demand and prices are presented for “new crop” MY
2018/19. These projections are to show how varying 2018 U.S. corn production outcomes could affect U.S.
corn supply‐demand and price outcomes in “new crop” MY 2018/19.
A ‐ KSU “Higher 2018 U.S. Corn Production” Scenario for “new crop” MY 2018/19: (25% probability):
Assumptions are as follows: 90.000 ma planted, 82.700 ma harvested, 176.6 bu/ac record yield (equal to
2017 record high), 14.605 bb production, 16.782 bb total supplies, 14.600 bb total use, 2.182 bb ending
stocks, 14.95% S/U, & $3.30 /bu U.S. corn average price;
B ‐ KSU “Lower 2018 U.S. Corn Production” Scenario for “new crop” MY 2018/19: (25% probability):
Assumptions are as follows: 90.000 ma planted, 82.700 ma harvested, 164.4 bu/ac yield (equal to 2009
yield), 13.596 bb production, 15.773 bb total supplies, 14.315 bb total use, 1.458 bb ending stocks, 10.19%
S/U, & $4.20 /bu U.S. corn average price;
6. World Corn Supply‐Demand – With & Without China
World corn production of 1,041.7 million metric tons (mmt) is projected for “old crop” MY 2017/18, down
3.1% from the record of 1,075.2 mmt in MY 2016/17, but still up 7.0% from 973.45 mmt in MY 2015/16. World
corn total supplies of 1,273.6 mmt in “old crop” MY 2017/18 are forecast to be down moderately from the
record high 1,290.2 mmt in MY 2016/17, but up from 1,183.2 mmt in MY 2015/16.
World corn exports of a 155.9 mmt are projected for “old crop” MY 2017/18, down 2.4% from the record
high of 159.8 mmt in MY 2016/17, and up 30.2% from 119.7 mmt in MY 2015/16. Projected World corn ending
stocks of 199.2 mmt (18.5% S/U) in “old crop” MY 2017/18 are down from the record high 231.9 mmt (21.9%
S/U) in MY 2016/17, and from 215.0 mmt (22.2% S/U) in MY 2015/16. Projected Foreign (Non‐U.S.) corn
ending stocks of 145.1 mmt (17.0% S/U) in “old crop” MY 2017/18 are down from 173.6 mmt (21.9% S/U) in
MY 2016/17, and from 170.9 mmt (23.1% S/U) in MY 2015/16.
An alternative view of the World corn supply‐demand is presented if Chinese corn usage and ending stocks
are isolated from the World market. “World‐Less‐China” corn ending stocks are projected to be 119.6 mmt
(14.35% S/U) in “old crop” MY 2017/18, down from 131.1 mmt (15.9% S/U) in MY 2016/17, but up from 104.2
mmt (13.9% S/U) in MY 2015/16. These figures show that World stocks‐to‐use of corn less China’s direct
influence are projected to be approximately 22% lower (i.e., 14.35% S/U for the “World‐Less‐China” versus
18.5% S/U for the “World” overall in “old crop” MY 2017/18).
At the same time, these figures also show that Chinese ending stocks of corn as proportion of the World
total are declining – down from 51.5% in MY 2015/16, to 43.4% in MY 2016/17, and down to 39.9% in “old
crop” MY 2017/18. The deliberate actions in recent years ‐ taken by the Chinese government to reduce
feedgrain stockpiles – is impacting the relative amount of World total corn stocks they hold. These actions
may eventual increase Chinese import demand for U.S. corn and grain sorghum.
…
April 3, 2018
Grain Market Outlook
lose at $4.11 ½ that same day. Through Tuesday, April 3rd MAY 2018 corn has traded as high as
$3.92 ½ before closing at $3.87 ¼ per bushel. DEC 2018 corn futures have traded as high as $4.16 before
closing at $4.12 ¼ per bushel on April 3rd.
2. Kansas Cash Corn Prices & Basis Bids as of April 3, 2018
In Western Kansas on Tuesday, April 3rd cash corn bids at major grain elevators ranged from $3.34 ($0.55
under MAY 2018 futures) to $3.76 ($0.13 under), and ranged from $3.45 ½ ($0.43 under) to $3.63 ½ ($0.25
under) in Central Kansas. These prices still are still much higher than a year ago when bids statewide had
fallen to $2.66‐$2.96 on December 23, 2016, and above marketing loan rates for corn across the state, with
corn loans 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 $3.71 ½ ‐ $3.76
½ on April 3rd, up from the range of $3.26‐$3.28 per bushel on 12/23/2016. Cash corn bids at Kansas ethanol
plants on April 3rd ranged from $3.77 ¼ ($0.10 under MAY) to $4.12 ¼ ($0.25 over MAY) – continuing to
indicate strength in ethanol demand for corn in Kansas and nationwide.
3. KSU‐Adjusted USDA Supply‐Demand Projections for “Old Crop” MY 2017/18
In the March 29th USDA Grain Stocks report, the USDA indicated approximately 175 million bushels (mb)
less usage of U.S. corn during the December‐February 2018 period than had been anticipated. By assuming
that this lower than expected usage came predominately from lower livestock feeding leads to the following
changes in the USDA’s original March 8th WASDE report U.S. corn supply‐demand balance sheet.
Leaving projected “old crop” MY 2017/18 corn supplies unchanged, total use of corn was adjusted lower
by 175 million bushels, with all of the reduction attributed lower livestock feeding. This would translate to
“old crop” MY 2017/18 U.S. feed and residual use of 5.375 bb – reducing total U.S. wheat usage to cast at
14.645 bb. As a result, “old crop” MY 2017/18 ending stocks are projected to be 175 mb higher to 2.302 bb
with % Stocks/Use being 13.08% (up from projections of 2.047 bb and $ ) – down 225 mb from February,
Page | 2
anddown from 2.293 bb (15.65% S/U) in MY 2016/17. United States’ corn prices are projected to average %
S/U prior to the March 29th reports).
4. KSU‐Adjusted USDA Supply‐Demand Projections for “New Crop” MY 2018/19
The results of the March 29th USDA Prospective Plantings report have caused changes in the “new crop”
M 2018/19 projections for U.S. corn supply‐demand and prices that were released by the USDA at the
Agricultural Outlook Forum in Arlington, Virginia on February 23, 2018. Estimates by Kansas State University
of these changes are as follows.
The updated KSU‐adjusted USDA‐based forecasts are that a) 2018 U.S. corn production would be 14.390
bb – based on 88.026 million acres (ma) planted, an estimate of 80.846 ma harvested (with 5 year average
harvested‐to‐planted history), and a yield of 174.0 bu (same as the USDA February 23rd projection).
Total supplies for “new crop” MY 2018/19 are projected to be 16.419 bb, with 2.302 bb beginning stocks,
14.067 bb production, and 50 mb imports. Total use continues to be forecast at 14.520 bb – with projections
of ethanol use at 5.650 bb (a record high), non‐ethanol food seed and industrial use at 1.495 bb (also a record
high), exports of 1.900 bb (down 325 mb from the current marketing year), and feed and residual use of 5.475
mb (down 75 mb from this marketing year).
With these changes in total supply, ending stocks are now projected to be down to 1.899 bb (13.08%
Stocks/Use) – with both being down significantly from “old crop” MY 2017/18 levels. United States’ corn
prices are projected to average a KSU‐adjusted $3.60 /bu (up $0.20 from the USDA’s original February 23rd
forecast). This scenario is given a 55% likelihood of occurring by KSU Extension Agricultural Economist D.
O’Brien.
5. Alternative KSU Supply‐Demand & Price Forecast for “New Crop” MY 2018/19
Two alternative KSU‐Scenarios for U.S. corn supply‐demand and prices are presented for “new crop” MY
2018/19. These projections are to show how varying 2018 U.S. corn production outcomes could affect U.S.
corn supply‐demand and price outcomes in “new crop” MY 2018/19.
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, 176.6 bu/ac record yield (equal to
2017 record high), 14.277 bb production, 16.629 bb total supplies, 14.600 bb total use, 2.029 bb ending
stocks, 13.90% S/U, & $3.50 /bu U.S. corn average price;
B ‐ KSU “Lower 2018 U.S. Corn Production” Scenario for “new crop” MY 2018/19: (20% probability):
Assumptions are as follows: 88.026 ma planted, 80.846 ma harvested, 164.4 bu/ac yield (equal to 2009
yield), 13.291 bb production, 15.643 bb total supplies, 14.315 bb total use, 1.328 bb ending stocks, 9.28%
S/U, & $4.40 /bu U.S. corn average price.
…
November 17, 2014
Leasing Papers
and Presentations
www.AgManager.info
2
requires taking the time to
put all the costs of
production into a budget
framework and allocate the
costs paid by each party.
Importantly, tenants need
to be compensated for
labor and owned
machinery, while
landowners need to be
compensated for the value
of their land and other
owned assets (e.g. center‐
pivot). Historically, the
proportions have been
regionally consistent with
landowners in many parts
of western and central
Kansas receiving 1/3 of the
harvest, while landowners
in Northeast Kansas can
receive as much as 50% of
the harvest. The differences
in returns to the
landowners are reflecting
the productive potential of
land in different parts of
the state, which is directly
interpreted as the $/ac
value.
The third and fourth
principles apply as much to
cash leases as crop share
leases. The third principle
is important to encourage
the tenant to treat the land
as if they own it
themselves. This may mean
making investments in the
long‐term health of the soil
or making investments to
reduce soil erosion. By
guaranteeing that their
return will be realized,
either by getting to farm
the land for the life of the
investments or being
compensated for residual
value if they no longer
farm that land, then the
tenant will be willing to
treat the land as if they
have an ownership stake in
it.
The fourth principle is the
basis for all good leases:
good communication
between the landowner
and the tenant. By keeping
both parties informed of
changes in market
conditions, production
practices, future plans
(selling land, passing it to
heirs), etc., the opportunity
for conflict is greatly
reduced. Leasing is a
business relationship
between two parties and if
they are both satisfied with
the outcome of the leasing
arrangement, then there is
stability. This stability is
important to landowners
wanting to manage their
assets as well as tenants
who want to make their
production and financing
decisions based on longer
horizons.
Cover …
April 1, 2004
Assessing Business Opportunities
contractor will meet on a biweekly basis with
the client.”
4 …
October 27, 2009
Energy
successively larger on an annual basis. During the
last three …
August 9, 2016
Breakout session presentations
Expected to Affect Local Basis & Cash Grain Prices…
Competitive … in competitive local grain basis bids
Barriers to entry … Expected to Affect
Local Basis & Cash Grain Prices…
Competitive …
General Sessions
2015
Data Source: USDA‐AMS, Compiled & Analysis by LMIC
Livestock Marketing Information Center
Beef Basis, Salina KS Projections (as of 8/20):Sept. 4: $238 Oct. 2: $233Nov. 6: $232
5
10
15
20
25
30
35
40
May … OFFAL VALUELive Animal Basis, Weekly
Avg. 2009‐13 …
General Sessions
Billion Lbs, Carcass Weight Basis
0
1
2
3
4
5
1973 1975 1977 … Billion Lbs, Carcass Weight Basis
0.0
0.5
1.0
1.5
2.0
2.5
3.0
1974 … Billion Lbs, Carcass Weight Basis
0
1
2
3
4
5
1973 1975 1977 …