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September 1, 2005
Farm Business and Transition Planning
Transitions
Rodney Jones
Prepared for the 2005 Agricultural Lenders Conference
Manhattan … Conference
Manhattan KS
September, 2005
1. Introduction
Planning … general, is a process, not an event. The
probability of success …
June 25, 2019
Feeder Cattle Pricing
This changed around 2004–2005 as daily volumes began generally … 14,000 contracts until 2004–2005. The last decade and a half … days at 19. Prior to this event, nearby feeder cattle futures …
January 15, 2013
1995 1997 1999 2001 2003 2005 2007 2009 2011
Mil. Tons
G-NP-22
01/11/13Livestock … projections, decision aides, these events…
• Do you know your …
September 17, 2015
Grain Market Outlook
I‐C. U.S. Corn Supply‐Demand
U.S. Corn Acreage, Yield & Production
The USDA’s projections of 2015 U.S. corn planted acres from the March 31st Prospective Plantings report
were adjusted downward in the USDA June 30th Acreage report, and have since been used without adjustment
in the July 10th, August 12th, and September 11 USDA Crop Production and WASDE reports. In the June 30,
2015 USDA Acreage report and subsequent July, August, and September Crop Production reports the USDA
projected that 2015 U.S. corn total planted acreage would be 88.897 million acres (ma), down 302,000 acres
from 89.199 ma projected earlier in the March 31st USDA Prospective Plantings report. This projection of
88.897 ma of 2015 U.S. corn planted is down 1.700 ma (‐1.9%) from 90.597 ma in 2014, down 6.468 ma (‐
6.8%) from 95.365 ma in 2013, down 8.394 ma (‐8.6%) from the record high of 97.291 ma in 2012, and also
down from 91.921 ma in 2011 (Table 1 and Figure 3).
The USDA projected that 2015 U.S. corn harvested acreage would be 81.101 million acres (ma), down
2.035 ma (‐2.4%) from 83.136 ma in 2014, down 6.350 ma (‐7.3%) from the record high of 87.451 ma in 2013,
down 6.534 ma (‐7.2%) from 87.365 ma in 2012, and down from 83.981 ma in 2011 (Table 1 and Figure 3).
The USDA implicitly projected that the proportion of harvested‐to‐planted acreage in 2015 is 91.2%, down
from 91.8% in 2014, and from 91.7% in 2013, but up from 89.9% in drought‐stricken 2012.
The USDA forecast 2015 U.S. average corn yields to be 167.5 bushels per acre (bu/ac) – down 1.3 bu/ac
from the USDA’s August projection, but still less than the record high of 171.0 bu/ac in 2014 (Table 1 and
Figure 4). Although this September 2015 USDA projection of 2015 U.S. corn yields of 167.5 bu/ac is down from
the record 171.0 bu/ac in 2014, it would still be the second highest U.S. corn yield to date, being 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 still up from the previous historic record high of 164.7 bu/ac in 2009.
Based on this combination of USDA projections for 2015 planted acreage (88.897 ma), harvested acreage
(81.101 ma), and yield (167.5 ma – USDA), projected 2015 U.S. corn production would be 13.585 billion
bushels (bb) – down 101 million bushels (mb) from the USDA’s August projections, and down from the record
high of 14.216 bb in 2014, and the previous record high of 13.829 bb in 2013. However, this projection of
13.585 bb in 2015 would still be up from 10.755 bb in 2012, 12.314 bb in 2011, 12.425 bb in 2010, and 13.067
bb in 2009 (Table 1).
U.S. Corn Total Supplies
The USDA projects that total supplies of U.S. corn for “new crop” MY 2015/16 are 15.347 bb – down 141
million bushels (mb) from the August 12th WASDE report. This projection of 15.347 bb for “new crop” MY
2015/16 results from beginning stocks of 1.732 bb, projected 2015 production of 13.585 bb, and projected
imports of 30 mb (Table 1 and Figure 5). Since the beginning of the expansion in U.S. ethanol production in
2006‐2007, total supplies of U.S. corn have been 14.362 bb in MY 2007/08, 13.729 bb in MY 2008/09, 14.749
bb in MY 2009/10, 14.161 bb in MY 2010/11, 13.471 bb in MY 2011/12, 11.904 bb in “short crop” MY 2012/13,
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14.686 bb in MY 2013/14, the estimated highest amount on record of 15.477 bb in “old crop” MY 2014/15, and
the forecast 2nd highest amount on record of 15.347 bb in “new crop” MY 2015/16.
The USDA forecast of beginning stocks of 1.732 bb in “new crop” MY 2015/16 is down 40 mb from the
August 12th WASDE report, but up substantially from 1.232 bb in beginning stocks in “old crop” MY 2014/15,
821 mb in MY 2013/14, 989 mb in MY 2012/13, and 1.128 bb in MY 2011/12 – while being up at least
marginally from 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 1.772 bb is up considerably from the low of 426 mb that
occurred in MY 1996/97, and is the highest amount since 1.967 bb in MY 2006/07 and 2.114 bb in MY 2005/06
(Table 1 and Figure 5).
Projected imports of 30 mb in “new crop” MY 2015/16 are equal to 30 mb in “old crop” MY 2014/15, down
from 36 mb in MY 2013/14 (the 2nd highest on record), and are 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, but up from 8 mb in MY 2009/10.
U.S. Corn Use by Category & Total Use
U.S. Ethanol Production and Corn Usage: Projected U.S. corn use for ethanol production of 5.250 bb in
“new crop” MY 2015/16 is unchanged from August, but up 50 mb from July) is up from 5.205 bb in “old crop”
MY 2014/15 (up 5 mb), and up from 5.124 bb in MY 2013/14 (down 10 mb), 4.641 bb in MY 2012/13, and
5.000 bb in MY 2011/12 (Table 1 and Figures 6‐7).
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 “old crop” MY 2014/15 ranged from 4.830‐5.449 bb on a weekly
basis since early September 2014 ‐ the beginning of the “old crop” 2014/15 marketing year. For the first one‐
half week of ethanol production in the “new crop” 2015/16 marketing year ending on September 4, 2015, corn
usage for ethanol production was on pace to reach 5.252 bb in “new crop” MY 2015/16 – essentially equal to
the USDA’s September 11, 2015 WASDE report estimate of 5.250 bb of corn to be used for ethanol
production.
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 the estimated
amount of 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. According to these KSU
estimates, since MY 2010/11 approximately 0.992‐1.130 of U.S. corn equivalent bushel‐weights (bbeqwt) 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 bbeqwt in DDGS corn‐weight equivalents in MY 2010/11, 1.130 bbeqwt in MY 2011/12, 1.004 bbeqwt in
MY 2012/13, 0.992 bbeqwt in MY 2013/14, 1.008 bbeqwt in both “old crop” MY 2014/15, and 1.016 bbeqwt in “new
crop” MY 2015/16.
Over the five most recent marketing years, DDGS exports in million bushels of corn equivalent weights
(mbeqwt) are estimated to range from 299 to 483 mb, – i.e., 326 mbeqwt in DDGS corn‐weight equivalents in MY
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2010/11, 299 mbeqwt in MY 2011/12, 322 mbeqwt in MY 2012/13, 472 mbeqwt in MY 2013/14, an estimated
record 479 mbeqwt in “old crop” MY 2014/15, and a near record high of 484 mbeqwt in “new crop” MY 2015/16.
U.S. Corn Exports: Projected U.S. corn exports of 1.850 bb in “new crop” MY 2015/16 is down from 1.875
bb in “old crop” MY 2014/15 (up 25 mb), less than 1.920 bb in MY 2013/14, and up sharply from 730 mb in MY
2013/14 – the 41 year low (i.e., since MY 1975/76) (Table 1, Figures 6 and 8).
According to USDA Foreign Agricultural Service (FAS) weekly export data (http://apps.fas.usda.gov/export‐
sales/esrd1.html), as of September 3rd, through the first 1/2 week of “new crop” MY 2015/16 (0.5 of 52 weeks),
10.5 mb of U.S. corn had been physically shipped for export – equal to 0.6% of the USDA’s projection of 1.850
bb for “new crop” MY 2015/16. An additional 336.15 mb of U.S. corn had been pre‐sold for future export
shipments during the remainder of “new crop” 2014/15 marketing year – after August 31, 2015 (the end of
“old crop” MY 2014/15).
Adding together 10.5 mb in past shipments plus 336.15 mb in forward sales amounts to 346.7 mb, or
18.7% of the USDA’s 1.850 bb U.S. corn export target for “new crop” MY 2015/16 in the September 11th USDA
WASDE report with 0.96% (0.5/52 weeks) of the marketing year completed. United States’ corn export
shipments will need to average 35.7 mb per week for the remaining 51.5 weeks of the “new crop” 2015/16
marketing year to achieve the USDA’s 1.850 bb projection.
Non‐Ethanol FSI: Forecast non‐ethanol food, seed and industrial (FSI) use of 1.380 bb in “new crop” MY
2015/16 is up 5 mb from August and up 20 mb from July, and is greater than 1.365 bb in “old crop” MY
2014/15 (up 10 mb from August), and compares to 1.369 bb in MY 2013/14, and 1.397 bb in MY 2012/13
(Table 1, Figures 6 and 8).
Feed and Residual Use: Forecast U.S. feed and residual use of 5.275 bb in “new crop” MY 2015/16 (down
25 mb from August but equal to July) is down 25 mb from 5.300 bb for “old crop” MY 2014/15, but up from
5.041 bb in MY 2013/14 (up 11 mb), 4.315 bb in MY 2012/13, and 4.519 bb in MY 2011/12 (Table 1, Figures 6
and 8). These levels of corn use for livestock feeding are somewhat correlated with the amounts of energy
feeds per grain consuming animal units (GCAUs) reported by the USDA over the same time period as illustrated
in the following information.
In the USDA September 15th Feed Outlook Report (http://usda.mannlib.cornell.edu/usda/Old Crop/FDS/FDS‐09‐15‐2015.pdf)
and other online resources the USDA Economic Research Service (ERS) indicates that over the MY 2012/13
through “new crop” MY 2015/16 time period, the total amount of Energy Feeds in the U.S. – including corn,
sorghum, barley, oats and wheat – is estimated to have been 134.7 million metric tons (mmt) in MY 2013/14
(95.0% corn), and 144.6 mmt in “old crop” MY 2014/15 (93.1% corn), and are forecast to be 143.9 mmt in
“new crop” MY 2015/16 (93.1% corn). Over this same 3 year period, total U.S. Grain Consuming Animal Units
(GCAUs) are estimated to have been 91.0 million in MY 2013/14, and 93.3 million in “old crop” MY 2014/15,
and are forecast to be 95.7 million in “new crop” MY 2015/16.
As a result, U.S. Energy Feeds per Grain Consuming Animal Unit is estimated to have been 1.480 metric
tons per animal unit (mt/au) in MY 2013/14, and 1.550 mt/au in “old crop” MY 2014/15, and is projected to be
1.504 mt/au in “new crop” MY 2015/16. 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 successive record
“large crop” years of MY 2013/14, “old crop” MY 2014/15, and now into the expected third consecutive large
crop year in “new crop” MY 2015/16 for corn and other aggregated feedgrains, the amount of energy feeds
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fed per animal unit and total feed use of U.S. corn has risen – contributing to downward pressure on the prices
of U.S. corn and other feedgrains.
Total Use of U.S. Corn for “new crop” MY 2015/16 is projected to be a record high 13.755 bb (down 20 mb
from August) – up marginally from the previous record high of 13.745 bb in “old crop” MY 2014/15 (up 40 mb
from August and up 49 mb from July) (Table 1 and Figures 6 and 8). United States’ total corn use has varied
widely in recent marketing years – due largely to changes in available U.S. corn supplies. Corn use in the U.S.
over time has changed from 12.737 bb in MY 2007/08, to 12.008 bb in MY 2008/09, 13.041 bb in MY 2009/10,
13.033 bb in MY 2010/11, 12.482 bb in MY 2011/12, 11.083 bb in MY 2012/13, the one time record high of
13.454 bb in MY 2013/14, the previous record high amount of 13.745 bb in “old crop” MY 2014/15, and now
the new projected record high of 13.755 bb in “new crop” MY 2015/16.
U.S. Corn Ending Stocks, % Ending Stocks‐to‐Use, & Prices
U.S. corn ending stocks for “new crop” MY 2015/16 are projected to be 1.592 bb (down 121 mb from
August, but down only 7 mb from July). Ending stocks of 1.592 bb in “new crop” MY 2015/16 would be down
140 mb from 1.732 bb in “old crop” MY 2014/15 (also down 40 mb from August) (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 1.722 bb in “old crop” MY 2014/15, and now are forecast to be 1.592
bb in “new crop” MY 2015/16.
Projected percent (%) ending stocks‐to‐use of 11.57% in “new crop” MY 2015/16 is down from 12.44% in
the August WASDE report, and down from 12.60% in “old crop” MY 2014/15 (Table 1 and Figures 9 and 10).
On a year‐by‐year basis, U.S. corn % ending stocks‐to‐use trended downward from 12.75% in MY 2007/08 and
13.94% in MY 2008/09, to 13.10% in MY 2009/10, 8.65% in MY 2010/11, 7.92% in MY 2011/12, and then down
to 7.41% in “drought stricken” MY 2012/13. Then U.S. corn ending stocks‐to‐use increased for the first time in
six (6) years to 9.16% in MY 2013/14, and then increased again to 12.60% in “old crop” MY 2014/15 – with a
projected decline to 11.57% in “new crop” MY 2015/16.
U.S. average corn prices for “new crop” MY 2015/16 are projected to be in the range of $3.45‐$4.05 bu/ac
(midpoint = $3.75) – up marginally from a projection of $3.35‐$3.95 ($3.65 midpoint) by the USDA in last
month’s August 12th WASDE report, but equal to the July 10th WASDE report (Table 1 and Figures 9 and 10).
Since the beginning of the rapid expansion in U.S. ethanol production in 2006, U.S. corn prices have moved
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 September 11th WASDE projection holds true, prices will now have declined year‐by‐year since
the $6.89 record high in MY 2012/13, down to $4.46 in MY 2013/14, $3.68 in “old crop” MY 2014/15, and now
to a projected range of $3.45‐$4.05 (midpoint = $3.75) in “new crop” MY 2015/16.
I‐D. KSU Corn Market Scenarios for “New Crop” MY 2015/16
Kansas State University Research and Extension has provided forecasts of U.S. corn supply‐demand
balances and prices for the “new crop” 2015/16 marketing year to complement and expand upon those of the
USDA, with details provided below. Three probability‐weighted Kansas State University (KSU) projections are
provided.
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The first scenario is based on USDA reported 2015 U.S. corn planted acreage with a 101 ma reduction from
the USDA’s forecast of 2015 U.S. harvested acres, and with a 2015 U.S. corn yield of 167.5 bu/ac (same as the
USDA) and 13.568 bb of 2015 U.S. corn production – and is given a 45% probability of occurring in 2015. The
second scenario is based on the same U.S. corn acreage estimates as in the first scenario, but with a lower U.S.
corn yield of 165.0 bu/ac and 13.356 bb of 2015 U.S. corn production – and is given a 50% probability of
occurring in 2015. The third scenario is based on the same USDA planted acreage projections as the first two
scenarios, but with a more pronounced short crop “low yield” of 155.0 bu/ac and 12.555 bb of 2015 U.S. corn
production – and is given a 5% probability of occurring in 2015.
KSU Scenario #1 – A “Normal Crop” of 13.568 bb with 45% Likelihood of Occurring
For “new crop” MY 2015/16, this “normal crop” yield KSU projection reflects the likelihood of a reduction
in U.S. corn harvested acreage in 2015 (down approximately 100 ma from current USDA projections), and how
U.S. corn yields that are marginally lower than USDA’s most recent September 11th NASS Crop Production
report projection would impact 2015 U.S. corn production, supply‐demand balances and prices in the coming
“new crop” 2015/16 marketing year, i.e., September 1, 2015 through August 31, 2016. Following is the KSU
“normal crop” U.S. corn supply‐demand and price scenario for “new crop” MY 2015/16 – given a 45%
probability of occurring (4.5 out of 10 odds).
1st KSU Scenario for “New Crop” MY 2015/16 U.S. Corn Supply/Demand & Prices
Estimated Probability of Occurring = 45% …
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
Page | 7
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
Page | 8
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).
Page | 9
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 …
June 15, 2015
Grain Market Outlook
CME eCorn Futures
Oct. 15, 2014 – June 12, 2015
Close = $3.69 ½ on 6/12/2015
JULY 2015 CME eCorn Futures
Oct. 15, 2014 – June 12, 2015
Close = $3.53 on 6/12/2015
Page | 4
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 (‐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). The USDA has maintained the same assumption about U.S. corn
planted acreage in the May and June WASDE reports. However, the USDA National Agricultural Statistics
Service (NASS) will release the annual Acreage report on June 30th in which changes in the USDA’s projection
of 2015 U.S. corn acreage may occur.
Given the USDA’s implicit assumption of an average harvested‐to‐planted acreage of 91.6%, 2015 U.S. corn
harvested acreage would be approximately 81.715 ma, down 1.421 ma (‐1.7%) from 83.136 ma in 2014, down
5.736 ma (‐6.6%) from 87.451 ma in 2013, down 5.650 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‐May USDA reports, and is higher than the 166.8 bu/ac estimate for 2015 in the June WASDE report
(Table 1 and Figure 4). Although this early 2015 USDA projection of 166.8 bu/ac is down from 171.0 bu/ac in
2014, it would be the second highest U.S. corn yield on record, being 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 up from the previous
historic 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 (81.715 ma – a KSU assumption calculated by dividing the USDA’s 2015 production forecast
by the 2015 yield projection), and yield (166.8 ma – USDA), 2015 U.S. corn production would be 13.630 billion
bushels (bb) – down from the record high of 14.216 bb 2014, and the previous record high of 13.829 bb in
2013 – but up from 10.755 bb in 2012, 12.314 bb in 2011, 12.425 bb in 2010, and 13.067 bb in 2009 (Table 1).
U.S. Corn Total Supplies
The USDA projects that total supplies of U.S. corn for “new crop” MY 2015/16 are a record high 15.531 bb
– up 25 million bushels (mb) from the May WASDE report. This projection of 15.531 bb for “new crop” MY
2015/16 results from beginning stocks of 1.876 bb, projected 2015 production of 13.630 bb, and projected
imports of 25 million bushel (mb) (Table 1 and Figure 5). Total supplies of near 15.531 bb in “new crop” MY
2015/16 would be a record high, being comparable to 14.362 bb in MY 2007/08, 13.729 bb in MY 2008/09,
14.749 bb in MY 2009/10, 14.161 bb in MY 2010/11, 13.471 bb in MY 2011/12, 11.904 bb in “short crop” MY
2012/13, 14.686 bb in MY 2013/14, and the previous record high of 15.472 bb in “current” MY 2014/15.
The USDA forecast of beginning stocks of 1.876 bb in “new crop” MY 2015/16 is up 25 mb from the May
WASDE report, and is also 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 1.851 bb is up considerably from the low of 426 mb that occurred in MY
1996/97, and is the highest since 1.967 bb in MY 2006/07 and 2.114 bb in MY 2005/07 (Table 1 and Figure 5).
Page | 5
Projected imports of 25 mb in “current crop” MY 2015/16 are equal to “current” MY 2014/15, but 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
“new crop” MY 2015/16 is up from 5.175 bb in “current” MY 2014/15 (down 25 mb from May), and up from
5.134 bb in MY 2013/14, 4.641 bb in MY 2012/13, and 5.000 bb in MY 2011/12 (Table 1 and Figures 6‐7).
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 4.830‐5.438 bb on a
weekly basis since early September 2014 ‐ the beginning of the “current crop” 2014/15 marketing year. Over
the period of September 1, 2014 through June 5, 2015, corn usage for ethanol production was been on pace to
reach 5.175 bb in “current crop” MY 2014/15. This estimate of 5.175 bb is equal to the USDA’s June 10, 2015
WASDE report estimate of 5.175 bb of corn to be used for ethanol production during “current crop” MY
2014/15, with 40 of 52 weeks (76.9%) 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 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. According to these KSU
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 in MY 2013/14, 1.001 bb in both “current crop” MY 2014/15, and 1.006 bb in “new crop” MY 2015/16.
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 in MY 2013/14, a near record 477 mb in “current crop” MY 2014/15, and a
record high 479 mb in “new crop” MY 2015/16.
U.S. Corn Exports: Projected U.S. corn exports of 1.900 bb in “new crop” MY 2015/16 is up from 1.825 bb
(unchanged from May, but up 25 mb from April) in “current” MY 2014/15, less than 1.917 bb in MY 2013/14,
and up sharply from 730 mb in MY 2013/14 – the 41 year low (i.e., since MY 1975/76) (Table 1, Figures 6 and
8).
According to USDA Foreign Agricultural Service (FAS) weekly export data (http://apps.fas.usda.gov/export‐
sales/esrd1.html), as of June 4th, through the 40th week of “current crop” MY 2014/15 (40 of 52 weeks), 1,299.9 mb
of U.S. corn had been physically shipped for export – equal to 71.2% of the USDA’s projection of 1.825 bb for
“current crop” MY 2014/15. An additional 430.1 mb of U.S. corn had been pre‐sold for future export
Page | 6
shipments during the “current crop” 2014/15 marketing year – prior to August 31, 2015 (the end of “current
crop” MY 2014/15).
Adding together 1,299.9 mb in past shipments plus 430.1 mb in forward sales amounts to 1,730.0 mb, or
94.8% of the USDA’s 1.825 bb U.S. corn export target for “current crop” MY 2014/15 in the June 10th USDA
WASDE report with 76.9% (40/52 weeks) of the marketing year completed. United States’ corn export
shipments will need to average 43.8 mb per week for the remainder of the “current crop” 2014/15 marketing
year to achieve the USDA’s 1.825 bb projection. This compares to 37.7 mb and 32.5 mb of export shipments
for the weeks ending May 28th and June 4th, respectively – i.e., each being behind of the pace needed to meet
the USDA’s most recent export projection.
Non‐Ethanol FSI: Forecast non‐ethanol food, seed and industrial (FSI) use of 1.360 bb in “new crop” MY
2015/16 is greater than 1.347 bb in “current” MY 2014/15 (unchanged from May, but reduced 48 mb from the
April WASDE), and compares to 1.369 bb in MY 2013/14, and 1.397 bb in MY 2012/13 (Table 1, Figures 6 and
8).
Feed and Residual Use: Forecast U.S. feed and residual use of 5.300 bb in “new crop” MY 2015/16 is up
from 5.250 bb for “current” MY 2014/15, 5.034 bb in MY 2013/14, 4.315 bb in MY 2012/13, and 4.520 bb in
MY 2011/12 (Table 1, Figures 6 and 8). These levels of corn use for livestock feeding are somewhat correlated
with the amounts of energy feeds per grain consuming animal units (GCAUs) reported by the USDA over the
same time period as illustrated in the following information.
In the USDA June 12th Feed Outlook Report (http://www.ers.usda.gov/media/1853441/fds_15f.pdf) the USDA Economic
Research Service (ERS) indicates that over the MY 2013/14 through “new crop” MY 2015/16 time period, the
total amount of Energy Feeds in the U.S. – including corn, sorghum, barley, oats and wheat – is estimated to
be 134.3 million metric tons (mmt) in MY 2013/14 (95.2% corn), and 141.8 mmt in “current” MY 2014/15
(92.3% corn), and 142.2 mmt in “new crop” MY 2015/16 (94.7% corn). Over this same 3 year period, total U.S.
Grain Consuming Animal Units (GCAUs) are estimated to be 91.0 million in MY 2013/14, 92.9 million in
“current” MY 2014/15, and 94.8 million in “new crop” MY 2015/16.
As a result, U.S. Energy Feeds per Grain Consuming Animal Unit is estimated to be 1.476 metric tons per
animal unit (mt/au) in MY 2013/14, and 1.555 mt/au in “current” MY 2014/15, and is projected to be 1.500
mt/au in “new crop” MY 2015/16. 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”
years of MY 2013/14 and “current” MY 2014/15, and now into the expected third consecutive large crop year
in “new crop” MY 2015/16 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 – contributing to downward pressure on the prices of
U.S. corn and other feedgrains.
Total Use of U.S. Corn for “new crop” MY 2015/16 is projected to be a record high 13.760 bb – up from the
current record highs of 13.597 bb in “current” MY 2014/15 (down 25 mb from May) (Table 1 and Figures 6 and
8). United States’ total corn use has varied widely in recent marketing years – due largely to changes in
available U.S. corn supplies. Corn use in the U.S. over time has changed from 12.737 bb in MY 2007/08, to
12.008 bb in MY 2008/09, 13.041 bb in MY 2009/10, 13.033 bb in MY 2010/11, 12.482 bb in MY 2011/12,
11.083 bb in MY 2012/13, the one time record high of 13.454 bb in MY 2013/14, the previous record high
amount of 13.597 bb in “current crop” MY 2014/15, and now the new projected record high of 13.760 bb in
“new crop” MY 2015/16.
Page | 7
U.S. Corn Ending Stocks, % Ending Stocks‐to‐Use, & Prices
U.S. corn ending stocks for “new crop” MY 2015/16 are projected to be 1.771 bb, which is down 105 mb
from 1.886 bb in “current” MY 2014/15 (Table 1 & Figure 9). Projected ending stocks for both “new crop” MY
2015/16 and “current” MY 2014/15 were up 25 mb from the May WASDE report. 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, 1.876 bb in “current crop” MY 2014/15, and now 1.771 bb in “new crop” MY 2015/16.
Projected percent (%) ending stocks‐to‐use of 12.87% in “new crop” MY 2015/16 is up marginally from a
month ago, but down from 13.80% in “current” MY 2014/15 (Table 1 and Figures 9 and 10). On a year‐by‐year
basis, U.S. corn % ending stocks‐to‐use trended downward from 12.75% in MY 2007/08 and 13.94% in MY
2008/09, to 13.10% in MY 2009/10, 8.65% in MY 2010/11, 7.92% in MY 2011/12, and then down to 7.41% in
“drought stricken” MY 2012/13, before increasing for the first time in six (6) years to 9.16% in MY 2013/14,
and then to 13.80% in “current” MY 2014/15 – with a projected decline to 12.87% in “new crop” MY 2015/16.
U.S. average corn prices for “new crop” MY 2015/16 are projected to be in the range of $3.20‐$3.80 bu/ac
(midpoint = $3.50) (Table 1 and Figures 9 and 10). 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 May 12th WASDE projection holds true, prices will now have declined for three consecutive
years since the $6.89 record high in MY 2012/13, down to $4.46 in MY 2013/14, $3.55‐$3.75 (midpoint =
$3.65) in “current crop” MY 2014/15, and now down to $3.20‐$3.80 (midpoint = $3.50) in “new crop” MY
2015/16.
I‐D. KSU Corn Market Scenarios for “New Crop” MY 2015/16
Kansas State University Extension has provided forecasts of U.S. corn supply‐demand balances and prices
for the “new crop” 2015/16 marketing year to complement and expand upon those of the USDA, with details
provided below. Three probability‐weighted Kansas State University (KSU) projections are provided.
The first scenario is based on USDA reported U.S. corn acreage with a normal crop “trend yield” of 162.25
bu/ac – given a 40% probability of occurring in 2015. The second scenario is based on lower U.S. corn planted
acreage in 2015 than projected by the USDA, again coupled with a normal crop “trend yield” of 162.25 bu/ac –
given a 45% probability of occurring in 2015. The third scenario is based on USDA planted acreage projections
and a short crop “low yield” of 155.0 bu/ac (given a 15% probability of occurring in 2015).
KSU Scenario #1 – A “Normal Crop” of 13.262 bb with 40% Likelihood of Occurring
For “new crop” MY 2015/16, this “normal crop” trend line yield KSU projection reflects the likelihood of a
reduction in U.S. corn planted acreage in 2015, and how a possible return to long term trend line U.S. corn
yields in 2015 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. This scenario is thought to have approximately a 40% probability of occurring (i.e.,
4 out of 10) at this point in time.
Page | 8
Specifically, this KSU U.S. corn supply‐demand scenario assumes that 2015 U.S. corn planted acreage will
be down 1.398 million acres (ma) to 89.199 ma (equal to the USDA’s May‐June WASDE projections), with 2015
U.S. corn harvested acreage also down 1.421 ma to 81.715 ma (also equal to the USDA May‐June WASDE
projections) (Table 1 and Figure 3). With a return to long term (1973‐2014) trend line U.S. corn yields of 162.3
bu/ac, 2015 U.S. corn production is forecast to be 13.262 bb.
Following these projections of corn production for “new crop” MY 2015/16, U.S. total corn usage is then
estimated to be a record high 13.730 – down moderately from the USDA’s May‐June 2015 projection of 13.760
bb for “new crop” MY 2015/16 (Table 1 and Figure 6).
KSU estimates are for U.S. corn ending stocks to be 1.433 bb, and for % ending stocks‐to‐use of 10.44% for
“new crop” MY 2015/16. Marketing year average U.S. corn prices would be projected to average near $4.25
/bu for “new crop” MY 2015/16 (Table 1 and Figures 9 and 10).
Following is the KSU “normal crop / trend yield” U.S. corn supply‐demand and price scenario for “new
crop” MY 2015/16 – given a 40% probability of occurring.
1st KSU Scenario for “New Crop” MY 2015/16 U.S. Corn Supply/Demand & Prices
Estimated Probability of Occurring = 40% …
July 21, 2015
Grain Market Outlook
CME Corn Futures
Nov. 20, 2014 – July 20, 2015
Close = $4.16 on 7/20/2015
SEPT 2015 CME Corn Futures
Nov. 20, 2014 – July 20, 2015
Close = $4.05 on 7/20/2015
Page | 4
I‐C. U.S. Corn Supply‐Demand – Focus on “New Crop” 2015/16 Projections
U.S. Corn Acreage, Yield & Production
The USDA’s projections of 2015 U.S. corn planted and harvested acres from the June 30th Acreage report
were used without adjustment in the July 10th USDA Crop Production and WASDE reports. In the June 30,
2015 USDA Acreage report the USDA projected that 2015 U.S. corn total planted acreage would be 88.897
million acres (ma), down 302,000 acres from 89.199 ma projected earlier in the March 31st USDA Prospective
Plantings report. This projection of 88.897 ma of U.S. corn planted in 2015 is down 1.700 ma (‐1.9%) from
90.597 ma in 2014, down 6.468 ma (‐6.8%) from 95.365 ma in 2013, down 8.394 ma (‐8.6%) from the record
high of 97.291 ma in 2012, and down from 91.921 ma in 2011 (Table 1 and Figure 3).
The USDA projected that 2015 U.S. corn total harvested acreage would be 81.101 million acres (ma),
nearly equal to the USDA WAOB projection in the June 10th WASDE report. This projection of 81.101 ma of
U.S. corn harvested in 2015 is down 2.035 ma (‐2.4%) from 83.136 ma in 2014, down 6.350 ma (‐7.3%) from
the record high of 87.451 ma in 2013, down 6.534 ma (‐7.2%) from 87.365 ma in 2012, and down from 83.981
ma in 2011. (Table 1 and Figure 3). The USDA implicitly projected that the proportion of harvested‐to‐planted
acreage in 2015 is 91.2%, down from 91.8% in 2014, and 91.7% in 2013, but up from 89.9% in drought‐stricken
2012.
The 2014 U.S. average corn yield of 171.0 bushels per acre (bu/ac) is a record high and unchanged from
the January‐June 2015 USDA reports, and is higher than the 166.8 bu/ac estimate for 2015 in the July 10th
WASDE report (Table 1 and Figure 4). Although this early 2015 USDA projection of 166.8 bu/ac is down from
171.0 bu/ac in 2014, it would still be the second highest U.S. corn yield on record, being 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 up
from the previous historic record high of 164.7 bu/ac in 2009.
Based on this combination of USDA projections for 2015 planted acreage (88.897 ma), harvested acreage
(81.101 ma), and yield (166.8 ma – USDA), projected 2015 U.S. corn production would be 13.530 billion
bushels (bb) – down from the record high of 14.216 bb in 2014, and the previous record high of 13.829 bb in
2013 – but up from 10.755 bb in 2012, 12.314 bb in 2011, 12.425 bb in 2010, and 13.067 bb in 2009 (Table 1).
U.S. Corn Total Supplies
The USDA projects that total supplies of U.S. corn for “new crop” MY 2015/16 are 15.334 bb – down 197
million bushels (mb) from the June 10th WASDE report. This projection of 15.334 bb for “new crop” MY
2015/16 results from beginning stocks of 1.779 bb, projected 2015 production of 13.530 bb, and projected
imports of 25 million bushel (mb) (Table 1 and Figure 5). Total supplies of near 15.334 bb in “new crop” MY
2015/16 would be the second highest on record, being comparable to 14.362 bb in MY 2007/08, 13.729 bb in
MY 2008/09, 14.749 bb in MY 2009/10, 14.161 bb in MY 2010/11, 13.471 bb in MY 2011/12, 11.904 bb in
“short crop” MY 2012/13, 14.686 bb in MY 2013/14, and the record high of 15.474 bb in “current” MY
2014/15.
The USDA forecast of beginning stocks of 1.779 bb in “new crop” MY 2015/16 is down 97 mb from the
June 10th WASDE report, but 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 – while being up at least
moderately from 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 1.779 bb is up considerably from the low of 426 mb that
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occurred in MY 1996/97, and is the highest since 1.967 bb in MY 2006/07 and 2.114 bb in MY 2005/06 (Table 1
and Figure 5).
Projected imports of 25 mb in “current crop” MY 2015/16 are equal to “current” MY 2014/15, but 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 5.225 bb in
“new crop” MY 2015/16 (up 25 mb from June) is up from 5.200 bb in “current” MY 2014/15 (up 25 mb from
May), and up from 5.134 bb in MY 2013/14, 4.641 bb in MY 2012/13, and 5.000 bb in MY 2011/12 (Table 1 and
Figures 6‐7).
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 4.830‐5.449 bb on a
weekly basis since early September 2014 ‐ the beginning of the “current crop” 2014/15 marketing year. Over
the period of September 1, 2014 through July 10, 2015, corn usage for ethanol production was been on pace
to reach 5.200 bb in “current crop” MY 2014/15. This estimate of 5.200 bb is equal to the USDA’s July 10, 2015
WASDE report estimate of 5.200 bb of corn to be used for ethanol production during “current crop” MY
2014/15, with 45 of 52 weeks (86.5%) 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. According to these KSU
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 in MY 2013/14, 1.006 bb in both “current crop” MY 2014/15, and 1.011 bb in “new crop” MY 2015/16.
Over the five most recent marketing years, DDGS exports in corn equivalent weights are estimated to range
from 299 to 482 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 in MY 2013/14, a near record 479 mb in “current crop” MY 2014/15, and a
record high 482 mb in “new crop” MY 2015/16.
U.S. Corn Exports: Projected U.S. corn exports of 1.875 bb in “new crop” MY 2015/16 (down 25 mb from
June) is up from 1.850 bb (up 25 mb from June) in “current” MY 2014/15, less than 1.917 bb in MY 2013/14,
and up sharply from 730 mb in MY 2013/14 – the 41 year low (i.e., since MY 1975/76) (Table 1, Figures 6 and
8).
According to USDA Foreign Agricultural Service (FAS) weekly export data (http://apps.fas.usda.gov/export‐
sales/esrd1.html), as of July 9th, through the 45th week of “current crop” MY 2014/15 (45of 52 weeks), 1,508.3 mb
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of U.S. corn had been physically shipped for export – equal to 81.5% of the USDA’s projection of 1.850 bb for
“current crop” MY 2014/15. An additional 313.7 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 1,508.3 mb in past shipments plus 313.7 mb in forward sales amounts to 1,832.0 mb, or
99.0% of the USDA’s 1.850 bb U.S. corn export target for “current crop” MY 2014/15 in the July 10th USDA
WASDE report with 86.5% (45/52 weeks) of the marketing year completed. United States’ corn export
shipments will need to average 48.8 mb per week for the remaining 7 weeks of the “current crop” 2014/15
marketing year to achieve the USDA’s 1.850 bb projection. This compares to 38.0 mb and 44.6 mb of export
shipments for the weeks ending July 2nd and July 9th, respectively – i.e., each being behind of the pace needed
to meet the USDA’s most recent export projection.
Non‐Ethanol FSI: Forecast non‐ethanol food, seed and industrial (FSI) use of 1.360 bb in “new crop” MY
2015/16 is greater than 1.346 bb in “current” MY 2014/15 (down 1 mb from May‐June, but reduced 48 mb
from the April WASDE), and compares to 1.369 bb in MY 2013/14, and 1.397 bb in MY 2012/13 (Table 1,
Figures 6 and 8).
Feed and Residual Use: Forecast U.S. feed and residual use of 5.275 bb in “new crop” MY 2015/16 (down
25 mb from June) is down 25 from 5.300 bb for “current” MY 2014/15 (up 50 mb from June), 5.034 bb in MY
2013/14, 4.315 bb in MY 2012/13, and 4.520 bb in MY 2011/12 (Table 1, Figures 6 and 8). These levels of corn
use for livestock feeding are somewhat correlated with the amounts of energy feeds per grain consuming
animal units (GCAUs) reported by the USDA over the same time period as illustrated in the following
information.
In the USDA July 14th Feed Outlook Report (http://usda.mannlib.cornell.edu/usda/current/FDS/FDS‐07‐14‐2015.pdf) the USDA
Economic Research Service (ERS) indicates that over the MY 2013/14 through “new crop” MY 2015/16 time
period, the total amount of Energy Feeds in the U.S. – including corn, sorghum, barley, oats and wheat – is
estimated to be 134.3 million metric tons (mmt) in MY 2013/14 (95.2% corn), and 144.6 mmt in “current” MY
2014/15 (93.1% corn), and 143.5 mmt in “new crop” MY 2015/16 (93.4% corn). Over this same 3 year period,
total U.S. Grain Consuming Animal Units (GCAUs) are estimated to be 91.0 million in MY 2013/14, 93.2 million
in “current” MY 2014/15, and 95.1 million in “new crop” MY 2015/16.
As a result, U.S. Energy Feeds per Grain Consuming Animal Unit is estimated to be 1.476 metric tons per
animal unit (mt/au) in MY 2013/14, and 1.552 mt/au in “current” MY 2014/15, and is projected to be 1.509
mt/au in “new crop” MY 2015/16. 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”
years of MY 2013/14 and “current” MY 2014/15, and now into the expected third consecutive large crop year
in “new crop” MY 2015/16 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 – contributing to downward pressure on the prices of
U.S. corn and other feedgrains.
Total Use of U.S. Corn for “new crop” MY 2015/16 is projected to be a record high 13.735 bb (down 25 mb
from June) – up from the current record highs of 13.696 bb in “current” MY 2014/15 (up 99 mb from June)
(Table 1 and Figures 6 and 8). United States’ total corn use has varied widely in recent marketing years – due
largely to changes in available U.S. corn supplies. Corn use in the U.S. over time has changed from 12.737 bb in
MY 2007/08, to 12.008 bb in MY 2008/09, 13.041 bb in MY 2009/10, 13.033 bb in MY 2010/11, 12.482 bb in
MY 2011/12, 11.083 bb in MY 2012/13, the one time record high of 13.454 bb in MY 2013/14, the previous
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record high amount of 13.696 bb in “current crop” MY 2014/15, and now the new projected record high of
13.735 bb in “new crop” MY 2015/16.
U.S. Corn Ending Stocks, % Ending Stocks‐to‐Use, & Prices
U.S. corn ending stocks for “new crop” MY 2015/16 are projected to be 1.599 bb (down 172 mb from
June), which is down 180 mb from 1.779 bb in “current” MY 2014/15 (also down 97 mb from June) (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, 1.779 bb in “current crop” MY 2014/15, and now are forecast
to be 1.599 bb in “new crop” MY 2015/16.
Projected percent (%) ending stocks‐to‐use of 11.64% in “new crop” MY 2015/16 is down from 12.87% in
the June WASDE report, and down from 13.00% in “current” MY 2014/15 (Table 1 and Figures 9 and 10). On a
year‐by‐year basis, U.S. corn % ending stocks‐to‐use trended downward from 12.75% in MY 2007/08 and
13.94% in MY 2008/09, to 13.10% in MY 2009/10, 8.65% in MY 2010/11, 7.92% in MY 2011/12, and then down
to 7.41% in “drought stricken” MY 2012/13, before increasing for the first time in six (6) years to 9.16% in MY
2013/14, and then to 12.99% in “current” MY 2014/15 – with a projected decline to 11.64% in “new crop” MY
2015/16.
U.S. average corn prices for “new crop” MY 2015/16 are projected to be in the range of $3.45‐$4.05 bu/ac
(midpoint = $3.75) – up from a projection of $3.20‐$3.80 ($3.50 midpoint) (Table 1 and Figures 9 and 10).
Since the beginning of the rapid expansion in U.S. ethanol production in 2006, U.S. corn prices have moved
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 July 10th WASDE projection holds true, prices will now have declined since the $6.89 record
high in MY 2012/13, down to $4.46 in MY 2013/14, $3.60‐$3.80 (midpoint = $3.70) in “current crop” MY
2014/15, and to $3.45‐$4.05 (midpoint = $3.75) in “new crop” MY 2015/16.
I‐D. KSU Corn Market Scenarios for “New Crop” MY 2015/16
Kansas State University Research and Extension has provided forecasts of U.S. corn supply‐demand
balances and prices for the “new crop” 2015/16 marketing year to complement and expand upon those of the
USDA, with details provided below. Three probability‐weighted Kansas State University (KSU) projections are
provided.
The first scenario is based on USDA reported U.S. corn acreage with a yield of 165.0 bu/ac – given a 30%
probability of occurring in 2015. The second scenario is based on the USDA’s most recent projections of
planted and harvested 2015 U.S. corn planted acreage, along with a normal crop “trend yield” of 162.25 bu/ac
– given a 55% probability of occurring in 2015. The third scenario is based on USDA planted acreage
projections and a short crop “low yield” of 155.0 bu/ac – given a 15% probability of occurring in 2015.
KSU Scenario #1 – A “Normal Crop” of 13.382 bb with 30% Likelihood of Occurring
For “new crop” MY 2015/16, this “normal crop” yield KSU projection reflects the likelihood of a reduction
in U.S. corn planted acreage in 2015 (equal to June 30th USDA Acreage report projections), and how U.S. corn
yields that are at least moderately lower than USDA’s most recent July 10th WASDE projection would impact
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2015 U.S. corn production, supply‐demand balances and prices in the coming “new crop” 2015/16 marketing
year, i.e., September 1, 2015 through August 31, 2016. This scenario is thought to have approximately a 30%
probability of occurring (i.e., 3 out of 10) at this point in time.
Specifically, this KSU U.S. corn supply‐demand scenario assumes that 2015 U.S. corn planted acreage will
be down 1.700 million acres (ma) to 88.897 ma (equal to the USDA’s June 30th Acreage Report projection),
with 2015 U.S. corn harvested acreage down 2.035 ma to 81.101 ma (also equal to the USDA’s June 30th
Acreage Report projection) (Table 1 and Figure 3). Forecast 2015 U.S. corn yields of 165.0 bu/ac in this
scenario are down from the USDA’s July 10th forecast of 166.8 bu/ac, but still up from the long term (1973‐
2014) trend line U.S. corn yields of 162.3 bu/ac. Taking these forecasts of 2015 U.S. corn acreage and yields
together, 2015 U.S. corn production is forecast to be 13.382 bb.
Following these projections of corn production for “new crop” MY 2015/16, U.S. total corn usage is then
estimated to be a record high 13.710 – down marginally from the USDA’s July 10th projection of 13.735 bb for
“new crop” MY 2015/16 (Table 1 and Figure 6).
In this scenario, KSU estimates are for U.S. corn ending stocks to be 1.476 bb, and for % ending stocks‐to‐
use of 10.77% for “new crop” MY 2015/16. Marketing year average U.S. corn prices would be projected to
average near $4.25 /bu for “new crop” MY 2015/16 (Table 1 and Figures 9 and 10).
Following is the KSU “normal crop / trend yield” U.S. corn supply‐demand and price scenario for “new
crop” MY 2015/16 – given a 30% probability of occurring.
1st KSU Scenario for “New Crop” MY 2015/16 U.S. Corn Supply/Demand & Prices
Estimated Probability of Occurring = 30% …
October 29, 2015
Grain Market Outlook
I‐E. U.S. Wheat Production
U.S. Wheat Planted Acreage
In the September 30, 2015 Small Grains 2015 Summary report and subsequent October 9th 2015 Crop
Production report the USDA has projected that 2015 U.S. wheat total planted acreage is 54.644 million acres
(ma), down 1.435 ma from the USDA’s earlier projection of 56.079 ma in the June 30th Acreage report and
subsequent July‐September Crop Production reports. This projection of 54.644 ma of 2015 U.S. wheat
planted area is down 2.197 ma (‐3.9%) from 56.841 ma in 2014 (adjusted up 19 ma), down 1.592 ma (‐2.8%)
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from 56.236 ma in 2013, and down from 55.294 ma in 2012, but still up from 54.277 ma in 2011, and the 6
year low of 52.620 ma in 2010 (Table 1 and Figures 4 and 5).
Winter Wheat Planted Acres: The USDA lowered its forecast of 2015 U.S. winter wheat plantings to
39.461 ma – down 1.159 ma from it’s previous estimate, down 2.948 ma (‐7.0%) from 42.409 ma in 2014
(adjusted 10 mb higher), and down 3.769 ma (‐8.7%) from 43.230 ma in 2013. Of this total, 28.98 ma are
projected to have been seeded to Hard Red Winter (HRW) wheat in 2015, down 5% from 30.50 ma in 2014,
and down 2.3% from 29.67 ma in 2013. Soft Red Winter (SRW) wheat planted acreage is projected at 7.09 ma,
down 16.4% from 8.48 ma in 2014, and down 29.4% from 10.04 ma in 2013. For 2015, USDA projects there to
be 4.130 ma of All White Wheat planted, with 3.396 ma of winter white (WW) wheat (down from 3.427 ma in
2014), and 734,000 acres of spring white (SW) wheat (down from 778,000 acres in 2014).
Other Spring Wheat Planted Acres: The USDA projected total U.S. other spring wheat plantings in 2015 to
be 13.247 ma – down 258,000 acres from it’s earlier estimate. This projection of 13.247 ma is up 222,000
acres (+1.7%) from 13.025 ma in 2014, and up 1.641 ma (+14.1%) from 11.606 ma in 2013. Of this total, 12.51
ma are seeded to Hard Red Spring (HRS) wheat, up from 12.25 ma in 2014, and from 10.94 ma in 2013.
Durum Wheat Planted Acres: Durum wheat plantings in the U.S. in 2015 are projected by the USDA at
1.936 ma in 2015 – down 18 ma from the it’s earlier estimate. This total of 1.936 ma for 2015 is up 529,000
acres (+37.6%) from 1.407 ma in 2014 (raised 9 ma), and up 536,000 acres (+38.3%) from 1.400 ma in 2013.
U.S. Wheat Harvested Acreage
In the September 30, 2015 USDA Small Grains 2015 Summary report and subsequent October 9th 2015
Crop Production report the USDA has projected that 2015 U.S. wheat total harvested acreage is 47.094 million
acres (ma), down 1.360 ma from it’s earlier projection of 48.454 ma in the June 30th Acreage and subsequent
July‐September Crop Production reports. This projection of 47.094 ma of 2015 U.S. wheat harvested area is
up 709,000 acres (+1.5%) from 46.385 ma in 2014 (raised 4 ma), and up 1.762 ma (+3.9%) from 45.332 ma in
2013, while down from 48.758 ma in 2012, and up from 45.687 ma in 2011 (Table 1 and Figures 4 and 5).
Aggregated total U.S. percent harvested‐to‐planted acreage in the U.S. was estimated to be 86.2% in 2015,
up from 81.6% in 2014, 80.6% in 2013, and comparable to the range of 76.0%‐89.1% (average = 84.1%) over
the 2000‐2014 period (Table 1 and Figure 5). The proportion of harvested‐to‐planted U.S. wheat acreage in
2013 of 80.6% was the 4th lowest during this period, behind 76.0% in 2002 and 81.6% in 2006 and 2014.
Winter Wheat Harvested Acres: The USDA forecast 2015 U.S. winter wheat harvested acreage at 33.257
ma – down 1.072 ma from the previous USDA projection – and down 42,000 acres (‐0.1%) from 32.299 ma in
2014 (raised 5 ma), down 393,000 acres (‐1.2%) from 32.650 ma in 2013, and down 2.352 ma (‐6.8%) from
34.609 ma in 2012. Of this total, 23.14 ma were projected to be Hard Red Winter (HRW) wheat in 2015, up
5.6% from 21.92 ma in 2014, and up from 20.39 ma in 2013. Soft Red Winter (SRW) wheat harvested acreage
was projected to be 5.89 ma, down 17.7% from 7.16 ma in 2014, and down 34.0% from 8.92 ma in 2013. For
2015, USDA projects there to be 3.939 ma of All White Wheat harvested, with 3.221 ma of white winter (WW)
wheat (down marginally from 3.219 ma in 2014), and 718,000 acres of spring white (SW) wheat (down 4.0%
from 748,000 acres in 2014).
Other Spring Wheat Harvested Acres: The USDA projected that total U.S. other spring wheat harvested
area in 2015 is 12.941 ma – down 276,000 acres from it’s previous forecast. This projection of 12.941 ma of
2015 U.S. other spring wheat harvested acres is up 201,000 acres (+1.6%) from 12.740 ma in 2014, and up
Page | 6
1.597 ma (+14.1%) from 11.344 ma in 2013. Of this total, 12.22 ma are Hard Red Spring (HRS) wheat, up from
11.99 ma in 2014, and from 10.70 ma in 2013.
Durum Wheat Harvested Acres: Durum wheat harvested area in the U.S. in 2015 are projected by the
USDA to be 1.896 ma in 2015 – down 12 ma from it’s previous estimate, but up 555,000 acres (+40.9%) from
1.338 ma in 2014, and up 558,000 acres (+41.7%) from 1.338 ma in 2013.
U.S. Wheat Yields & Production
The USDA projected 2015 U.S. average wheat yields to be 43.6 bushels per acre (bu/ac) – down from 44.1
bu/ac in August‐September, and 44.3 bu/ac in July, but up from 43.5 bu/ac in May 2015. This projection of
2015 U.S. wheat yields of 43.6 bu/ac is down from 43.7 bu/ac in 2014, but less than the record high of 47.1
bu/ac in 2013, and the previous record of 46.2 bu/ac in 2012 (Table 1 and Figure 6).
Based on this combination of projections for 2015 planted acreage (54.644 ma), harvested acreage (47.094
ma), and yield (43.6 bu/ac), 2015 U.S. wheat production is projected to be 2.052 billion bushels (bb). This
projection of 2015 U.S. wheat production of 2.052 bb is down 84 mb from August‐September, and down 96
mb from July. It is also up from 2.026 bb in 2014, and within the 2004‐2014 range of 1.808‐2.512 bb (average
= 2.128 bb, median = 2.135 bb) (Table 1 and Figure 7).
I‐F. U.S. Wheat Total Supplies
Total supplies of U.S. wheat of 2.930 bb for “new crop” MY 2015/16 projected by the USDA is down 84 mb
from the September WASDE report, resulting from beginning stocks of 753 mb, projected 2015 production of
2.052 bb, and projected imports of 125 mb (Table 1 and Figure 7). Over the last ten (10) marketing years, U.S.
wheat total supplies have been 2.501 bb in MY 2006/07, 2.620 bb in MY 2007/08, 2.945 bb in MY 2008/09,
2.984 bb in MY 2009/10, 3.236 bb in MY 2010/11, 2.969 bb in MY 2011/12, 3.119 bb in MY 2012/13, 3.026 bb
in MY 2013/14, 2.766 bb in MY 2014/15 (up 1 mb from last month), and are now projected to be 2.930 bb in
“new crop” MY 2015/16 (down 84 mb from September).
Forecast U.S. wheat beginning stocks of 753 mb in “new crop” MY 2015/16 are up 27.6% from 590 mb in
beginning stocks in “old crop” MY 2014/15, and up from 718 mb in MY 2013/14. This projection of 753 mb in
beginning stocks in “new crop” MY 2015/16 is more than double the long term historic low of 306 mb in MY
2008/09 – which resulted from the historically tight U.S. wheat ending stocks situation that occurred in MY
2007/08.
Projected U.S. wheat imports of 125 mb for “new crop” MY 2015/16 are less than 149 mb in MY 2014/15
(the 2nd highest on record), and the record high of 173 mb in MY 2013/14 (up 4 mb from August). Since MY
1973/74 and prior to MY 2013/14, the next highest amounts of U.S. wheat imports have been: 1) 127 mb in
MY 2008/09; 2) 124 mb in MY 2012/13; 3) 122 mb in MY 2006/07; and 4) 119 mb in MY 2009/10.
Nearly all of U.S. wheat imports come from Canada because of favorable geographic location and
associated grain transportation logistics. Large Canadian wheat supplies over the last several years have been
a major factor in this increase in U.S. wheat imports. Canada produced a record large wheat crop of 37.53
million metric tons (mmt) (or 1.379 bb in 60 lb/bu units) in MY 2013/14, followed by a crop of 29.42 mmt
(1.081 bb) in MY 2014/15, with a projection of 26.0 mmt (955 mb) in “new crop” MY 2015/16. The largest
Canadian wheat crops since 1960 that were over 30.0 mmt happened in 1986 (31.4 mmt or 1.152 bb), 1990
(32.1 mmt or 1.179 bb), 1991 (31.9 mmt or 1.174 bb), and 2013 (37.5 mmt or 1.379 bb).
Page | 7
I‐G. U.S. Wheat Total Use & Use by Category
Food Use: Projected U.S. wheat food use of 967 mb in “new crop” MY 2015/16 has followed a consistent
upward trend over time due to a) steady growth in the U.S. population, and b) associated regular increases in
demand for processed wheat products. This projected amount of 967 mb in food use in “new crop” MY
2015/16 follows from 958 mb in MY 2014/15, 955 mb in MY 2013/14, and from 951 mb in MY 2012/13 (Table
1 and Figure 8).
Seed Use: Forecast seed use of 72 mb in “new crop” MY 2015/16 is down from 81 mb in “old crop” MY
2014/15, 77 mb in MY 2013/14, and 73 mb in MY 2012/13 (Table 1 and Figure 8). The USDA’s forecast U.S.
wheat seed use extends the historic pattern of there being a relatively small but inelastic demand for U.S.
wheat for seed use purposes, driven primarily by the amount of U.S. wheat seed needed to plant adequate
U.S. wheat acreage each year (from both commercial and on‐farm seed sources) with consideration for
possible annual seed wheat production shortfalls.
Exports: Projected U.S. wheat exports of 850 mb in “new crop” MY 2015/16 (down 50 mb from
September, 75 mb from August, and 100 mb from July) are down marginally from 854 mb in “old crop” MY
2014/15 – down to the lowest amount since 879 mb in MY 2010/11 (Table 1 and Figure 8). Over the last ten
(10) marketing years, the U.S. has exported 908 mb of wheat in MY 2006/07, 1.263 bb in MY 2007/08, 1.015
bb in MY 2008/09, 879 mb in MY 2009/10, 1.291 bb in MY 2010/11, 1.051 bb in MY 2011/12, 1.012 bb in MY
2012/13, 1.176 bb in MY 2013/14, an estimate of 854 mb in “old crop” MY 2014/15, with a projection of 850
mb in “new crop” MY 2015/16.
Some of the factors that have caused lower U.S. wheat exports in “old crop” MY 2014/15 and “new crop”
MY 2015/16 are a) the sharp increase in the value of the U.S. dollar relative to other World currencies, and b)
prospects for fully adequate supplies of competitive foreign wheat stockpiles for export trade purposes. That
said, there are several factors that could change the current “low export demand” situation for the United
States, including 1) the uncertain impact on World wheat trade in the future from ongoing geopolitical
conflicts (between Russian and Ukraine), and 2) the potential for dry or adverse weather conditions in other
major World wheat production areas due to the likelihood of an “El Nino” weather pattern in the coming year.
However, until tangible evidence of such potential damage to foreign wheat production and/or other market
events should occur in late 201 …
September 1, 2015
Grain Market Outlook
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Trade Weighted U.S. Dollar Index (1973=100) (Not Seasonally Adjusted)
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I‐C. U.S. Corn Supply‐Demand
U.S. Corn Acreage, Yield & Production
The USDA’s projections of 2015 U.S. corn planted acres from the March 31st Prospective Plantings report
were adjusted downward in the USDA June 30th Acreage report, and have since been used without adjustment
in the July 10th and August 12th USDA Crop Production and WASDE reports. In the June 30, 2015 USDA
Acreage report and subsequent July and August Crop Production reports the USDA projected that 2015 U.S.
corn total planted acreage would be 88.897 million acres (ma), down 302,000 acres from 89.199 ma projected
earlier in the March 31st USDA Prospective Plantings report. This projection of 88.897 ma of 2015 U.S. corn
planted is down 1.700 ma (‐1.9%) from 90.597 ma in 2014, down 6.468 ma (‐6.8%) from 95.365 ma in 2013,
down 8.394 ma (‐8.6%) from the record high of 97.291 ma in 2012, and also down from 91.921 ma in 2011
(Table 1 and Figure 3).
The USDA projected that 2015 U.S. corn harvested acreage would be 81.101 million acres (ma), down
2.035 ma (‐2.4%) from 83.136 ma in 2014, down 6.350 ma (‐7.3%) from the record high of 87.451 ma in 2013,
down 6.534 ma (‐7.2%) from 87.365 ma in 2012, and down from 83.981 ma in 2011 (Table 1 and Figure 3).
The USDA implicitly projected that the proportion of harvested‐to‐planted acreage in 2015 is 91.2%, down
from 91.8% in 2014, and from 91.7% in 2013, but up from 89.9% in drought‐stricken 2012.
The USDA forecast 2015 U.S. average corn yields to be 168.8 bushels per acre (bu/ac) – up 2.0 bu/ac from
the USDA’s July projection, but still less than the record high of 171.0 bu/ac in 2014 (Table 1 and Figure 4).
Although this August 2015 USDA projection of 2015 U.S. corn yields of 168.8 bu/ac is down from the record
171.0 bu/ac in 2014, it would still be the second highest U.S. corn yield to date, being 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 still
up from the previous historic record high of 164.7 bu/ac in 2009.
Based on this combination of USDA projections for 2015 planted acreage (88.897 ma), harvested acreage
(81.101 ma), and yield (168.8 ma – USDA), projected 2015 U.S. corn production would be 13.686 billion
bushels (bb) – up 156 million bushels (mb) from the USDA’s July projections, but down from the record high of
14.216 bb in 2014, and the previous record high of 13.829 bb in 2013. However, this projection of 13.686 bb in
2015 would still be up from 10.755 bb in 2012, 12.314 bb in 2011, 12.425 bb in 2010, and 13.067 bb in 2009
(Table 1).
U.S. Corn Total Supplies
The USDA projects that total supplies of U.S. corn for “new crop” MY 2015/16 are 15.488 bb – up 154
million bushels (mb) from the July 10th WASDE report. This projection of 15.488 bb for “new crop” MY
2015/16 results from beginning stocks of 1.772 bb, projected 2015 production of 13.686 bb, and projected
imports of 30 million bushel (mb) (Table 1 and Figure 5). Since the beginning of the expansion in U.S. ethanol
production in 2006‐2007, total supplies of U.S. corn have been 14.362 bb in MY 2007/08, 13.729 bb in MY
2008/09, 14.749 bb in MY 2009/10, 14.161 bb in MY 2010/11, 13.471 bb in MY 2011/12, 11.904 bb in “short
crop” MY 2012/13, 14.686 bb in MY 2013/14, the estimated 2nd highest amount on record of 15.477 bb in “old
crop” MY 2014/15, and the forecast record high of 15.488 bb in “new crop” MY 2015/16.
The USDA forecast of beginning stocks of 1.772 bb in “new crop” MY 2015/16 is down 7 mb from the July
10th WASDE report, but up substantially from 1.232 bb in beginning stocks in “old crop” MY 2014/15, 821 mb
in MY 2013/14, 989 mb in MY 2012/13, and 1.128 bb in MY 2011/12 – while being up at least moderately from
Page | 5
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 1.772 bb is up considerably from the low of 426 mb that occurred in MY
1996/97, and is the highest amount since 1.967 bb in MY 2006/07 and 2.114 bb in MY 2005/06 (Table 1 and
Figure 5).
Projected imports of 30 mb in “new crop” MY 2015/16 are up 5 mb from July, equal to 30 mb in “old crop”
MY 2014/15, down from 36 mb in MY 2013/14 (the 2nd highest on record), and are 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, but up from 8 mb in MY 2009/10.
U.S. Corn Use by Category & Total Use
U.S. Ethanol Production and Corn Usage: Projected U.S. corn use for ethanol production of 5.250 bb in
“new crop” MY 2015/16 (up 25 mb from June and up 50 mb from July) is up from 5.200 bb in “old crop” MY
2014/15, and up from 5.134 bb in MY 2013/14, 4.641 bb in MY 2012/13, and 5.000 bb in MY 2011/12 (Table 1
and Figures 6‐7).
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 “old crop” MY 2014/15 has ranged from 4.830‐5.449 bb on a
weekly basis since early September 2014 ‐ the beginning of the “old crop” 2014/15 marketing year. Over the
period of September 1, 2014 through August 21, 2015, corn usage for ethanol production was been on pace to
reach 5.214 bb in “old crop” MY 2014/15. This estimate of 5.214 bb is marginally larger than the USDA’s
August 12, 2015 WASDE report estimate of 5.200 bb of corn to be used for ethanol production during “old
crop” MY 2014/15, with 50.5 of 52 weeks (97.1%) 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 the estimated
amount of 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. According to these KSU
estimates, since MY 2010/11 approximately 0.995‐1.130 of U.S. corn equivalent bushel‐weights (bbeqwt) 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 bbeqwt in DDGS corn‐weight equivalents in MY 2010/11, 1.130 bbeqwt in MY 2011/12, 1.004 bbeqwt in
MY 2012/13, 0.995 bbeqwt in MY 2013/14, 1.008 bbeqwt in both “old crop” MY 2014/15, and 1.017 bbeqwt in “new
crop” MY 2015/16.
Over the five most recent marketing years, DDGS exports in million bushels of corn equivalent weights
(mbeqwt) are estimated to range from 299 to 483 mb, – i.e., 326 mbeqwt in DDGS corn‐weight equivalents in MY
2010/11, 299 mbeqwt in MY 2011/12, 322 mbeqwt in MY 2012/13, 472 mbeqwt in MY 2013/14, a near record 478
mbeqwt in “old crop” MY 2014/15, and a projected record high 483 mbeqwt in “new crop” MY 2015/16.
U.S. Corn Exports: Projected U.S. corn exports of 1.850 bb in “new crop” MY 2015/16 (down 25 mb from
July) is unchanged from 1.850 bb in “old crop” MY 2014/15, less than 1.920 bb in MY 2013/14, and up sharply
from 730 mb in MY 2013/14 – the 41 year low (i.e., since MY 1975/76) (Table 1, Figures 6 and 8).
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According to USDA Foreign Agricultural Service (FAS) weekly export data (http://apps.fas.usda.gov/export‐
sales/esrd1.html), as of August 20th, through the 50th week of “old crop” MY 2014/15 (50 of 52 weeks), 1,737.2 bb
of U.S. corn had been physically shipped for export – equal to 93.6% of the USDA’s projection of 1.850 bb for
“Old Crop crop” MY 2014/15. An additional 125 mb of U.S. corn had been pre‐sold for future export shipments
during the remainder of “old crop” 2014/15 marketing year – prior to August 31, 2015 (the end of “Old Crop
crop” MY 2014/15).
Adding together 1,737.2 mb in past shipments plus 125 mb in forward sales amounts to 1.862 bb, or
100.7% of the USDA’s 1.850 bb U.S. corn export target for “old crop” MY 2014/15 in the August 12th USDA
WASDE report with 97.1% (50.5/52 weeks) of the marketing year completed. United States’ corn export
shipments will need to average 75.2 mb per week for the remaining 1.5 weeks of the “old crop” 2014/15
marketing year to achieve the USDA’s 1.850 bb projection. This compares to 32.3 mb of export shipments for
the week ending August 20th – i.e., being behind of the pace needed to meet the USDA’s most recent export
projection.
It is likely that a number of these remaining “old crop” MY 2014/15 U.S. corn export sales will be cancelled
and “rolled over” into the “new crop” 2015/16 marketing year beginning on September 1, 2015. It is also likely
that the USDA will reduce its estimate of “old crop” 2014/15 corn exports in the upcoming September 11th
USDA WASDE report – an adjustment by itself that would also bring about an increase in U.S. corn ending
stocks in “old crop” MY 2015/16.
Non‐Ethanol FSI: Forecast non‐ethanol food, seed and industrial (FSI) use of 1.375 bb in “new crop” MY
2015/16 is up 15 mb from July, and greater than 1.355 bb in “old crop” MY 2014/15 (up 1 mb from July), and
compares to 1.369 bb in MY 2013/14, and 1.397 bb in MY 2012/13 (Table 1, Figures 6 and 8).
Feed and Residual Use: Forecast U.S. feed and residual use of 5.300 bb in “new crop” MY 2015/16 (up 25
mb from July) is unchanged from 5.300 bb for “old crop” MY 2014/15, but up from 5.030 bb in MY 2013/14,
4.315 bb in MY 2012/13, and 4.519 bb in MY 2011/12 (Table 1, Figures 6 and 8). These levels of corn use for
livestock feeding are somewhat correlated with the amounts of energy feeds per grain consuming animal units
(GCAUs) reported by the USDA over the same time period as illustrated in the following information.
In the USDA August 14th Feed Outlook Report (http://usda.mannlib.cornell.edu/usda/Old Crop/FDS/FDS‐08‐14‐2015.pdf) and
other online resources the USDA Economic Research Service (ERS) indicates that over the MY 2012/13
through “new crop” MY 2015/16 time period, the total amount of Energy Feeds in the U.S. – including corn,
sorghum, barley, oats and wheat – is estimated to be or have been 125.7 million metric tons (mmt) in MY
2012/13 (87.2% corn), 134.3 mmt in MY 2013/14 (95.2% corn), and 144.5 mmt in “old crop” MY 2014/15
(93.1% corn), and 144.5 mmt in “new crop” MY 2015/16 (93.1% corn). Over this same 3 year period, total U.S.
Grain Consuming Animal Units (GCAUs) are estimated to be or have been 92.3 million in MY 2012/13, 91.0
million in MY 2013/14, 93.2 million in “old crop” MY 2014/15, and 95.2 million in “new crop” MY 2015/16.
As a result, U.S. Energy Feeds per Grain Consuming Animal Unit is estimated to be or have been 1.362
metric tons per animal unit (mt/au) in MY 2012/13, 1.477 mt/au in MY 2013/14, and 1.551 mt/au in “old crop”
MY 2014/15, and is projected to be 1.517 mt/au in “new crop” MY 2015/16. 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 successive record “large crop” years of MY 2013/14, “old crop” MY 2014/15, and now into
the expected third consecutive large crop year in “new crop” MY 2015/16 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 –
contributing to downward pressure on the prices of U.S. corn and other feedgrains.
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Total Use of U.S. Corn for “new crop” MY 2015/16 is projected to be a record high 13.775 bb (up 40 mb
from July) – up from the previous record high of 13.706 bb in “old crop” MY 2014/15 (up 9 mb from July)
(Table 1 and Figures 6 and 8). United States’ total corn use has varied widely in recent marketing years – due
largely to changes in available U.S. corn supplies. Corn use in the U.S. over time has changed from 12.737 bb in
MY 2007/08, to 12.008 bb in MY 2008/09, 13.041 bb in MY 2009/10, 13.033 bb in MY 2010/11, 12.482 bb in
MY 2011/12, 11.083 bb in MY 2012/13, the one time record high of 13.454 bb in MY 2013/14, the previous
record high amount of 13.705 bb in “old crop” MY 2014/15, and now the new projected record high of 13.775
bb in “new crop” MY 2015/16.
U.S. Corn Ending Stocks, % Ending Stocks‐to‐Use, & Prices
U.S. corn ending stocks for “new crop” MY 2015/16 are projected to be 1.713 bb (up 114 mb from July),
which is down 59 mb from 1.772 bb in “old crop” MY 2014/15 (also down 9 mb from July) (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 1.772 bb in “old crop” MY 2014/15, and now are forecast
to be 1.713 bb in “new crop” MY 2015/16.
Projected percent (%) ending stocks‐to‐use of 12.44% in “new crop” MY 2015/16 is up from 11.64% in the
July WASDE report, and down from 12.93% in “old crop” MY 2014/15 (Table 1 and Figures 9 and 10). On a
year‐by‐year basis, U.S. corn % ending stocks‐to‐use trended downward from 12.75% in MY 2007/08 and
13.94% in MY 2008/09, to 13.10% in MY 2009/10, 8.65% in MY 2010/11, 7.92% in MY 2011/12, and then down
to 7.41% in “drought stricken” MY 2012/13. Then U.S. corn ending stocks‐to‐use increased for the first time in
six (6) years to 9.16% in MY 2013/14, and then increased again to 12.93% in “old crop” MY 2014/15 – with a
projected decline to 12.44% in “new crop” MY 2015/16.
U.S. average corn prices for “new crop” MY 2015/16 are projected to be in the range of $3.35‐$3.95 bu/ac
(midpoint = $3.65) – down marginally from a projection of $3.45‐$4.05 ($3.70 midpoint) by the USDA in last
month’s July 10th WASDE report (Table 1 and Figures 9 and 10). Since the beginning of the rapid expansion in
U.S. ethanol production in 2006, U.S. corn prices have moved 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 August 12th WASDE projection
holds true, prices will now have declined year‐by‐year since the $6.89 record high in MY 2012/13, down to
$4.46 in MY 2013/14, $3.65‐$3.75 (midpoint = $3.70) in “old crop” MY 2014/15, and now to a projected range
of $3.35‐$3.95 (midpoint = $3.65) in “new crop” MY 2015/16.
I‐D. KSU Corn Market Scenarios for “New Crop” MY 2015/16
Kansas State University Research and Extension has provided forecasts of U.S. corn supply‐demand
balances and prices for the “new crop” MY 2015/16 to complement and expand upon those of the USDA, with
details provided below. Three probability‐weighted Kansas State University (KSU) projections are provided.
The first scenario is based on USDA reported 2015 U.S. corn planted acreage with a 101 ma reduction from
the USDA’s forecast of 2015 U.S. harvested acres, and with a 2015 U.S. corn yield of 167.5 bu/ac and 13.568 bb
of 2015 U.S. corn production – and is given a 40% probability of occurring in 2015. The second scenario is
based on the same U.S. corn acreage estimates as in the first scenario, but with a lower U.S. corn yield of 165.0
bu/ac and 13.356 bb of 2015 U.S. corn production – and is given a 50% probability of occurring in 2015. The
Page | 8
third scenario is based on the same USDA planted acreage projections as the first two scenarios, but with a
more pronounced short crop “low yield” of 155.0 bu/ac and 12.555 bb of 2015 U.S. corn production – and is
given a 10% probability of occurring in 2015.
KSU Scenario #1 – A “Normal Crop” of 13.568 bb with 40% Likelihood of Occurring
For “new crop” MY 2015/16, this “normal crop” yield KSU projection reflects the likelihood of a reduction
in U.S. corn harvested acreage in 2015 (down approximately 100 ma from current USDA projections), and how
U.S. corn yields that are marginaly lower than USDA’s most recent August 12th NASS Crop Production report
projection would impact 2015 U.S. corn production, supply‐demand balances and prices in the coming “new
crop” 2015/16 marketing year, i.e., September 1, 2015 through August 31, 2016. This scenario is thought to
have approximately a 40% probability of occurring (i.e., 4 out of 10) at this point in time.
Specifically, this KSU U.S. corn supply‐demand scenario assumes that 2015 U.S. corn planted acreage will
be down 1.700 million acres (ma) to 88.897 ma (equal to the USDA’s June 30th Acreage Report projection and
the August 12th Crop Production report forecast), with 2015 U.S. corn harvested acreage down 2.136 ma to
81.000 ma (down 101 ma from the USDA’s August 12th Crop Production report projection) (Table 1 and Figure
3). Forecast 2015 U.S. corn yields of 167.5 bu/ac in this scenario are down from the USDA’s August 12th
forecast of 168.8 bu/ac, but still would be the second highest on record, and up from the long term (1973‐
2014) trend line U.S. corn yields of 162.3 bu/ac. Taking these forecasts of 2015 U.S. corn acreage and yields
together, 2015 U.S. corn production is forecast to be 13.568 bb.
Following these projections of corn production for “new crop” MY 2015/16, U.S. total corn usage is then
estimated to be a record high 13.775 – equal to the USDA’s August 12th projection for “new crop” MY 2015/16
(Table 1 and Figure 6). In this scenario, KSU estimates are for U.S. corn ending stocks to be 1.595 bb, and for %
ending stocks‐to‐use of 11.58% for “new crop” MY 2015/16. Marketing year average U.S. corn prices would
be projected to average near $4.25 /bu for “new crop” MY 2015/16 (Table 1 and Figures 9 and 10).
Following is the KSU “normal crop” U.S. corn supply‐demand and price scenario for “new crop” MY
2015/16 – given a 40% probability of occurring (4 out of 10 odds).
1st KSU Scenario for “New Crop” MY 2015/16 U.S. Corn Supply/Demand & Prices
Estimated Probability of Occurring = 40% …