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March 2, 2017
Grain Market Outlook
ding
through spring‐summer 2017. Third, at least moderate continued strength in U.S. corn exports – driven partly
by the availability of exportable corn supplies from South America through spring 2017. And fourth, the
always present possibility of broader U.S. and Foreign economic and/or financial system disruptions that could
impact grain, energy, and other commodity markets in 2017. World geo‐political events could provide an
unanticipated “shock” to U.S. and World energy and grain markets – with the impact on the direction of U.S.
and World corn markets being difficult to anticipate.
USDA Supply‐Demand Forecast for “Next Crop” MY 2017/18. With early USDA projections of 2017 U.S. corn
plantings of 90.000 million acres or ‘ma’ (down 4.004 ma), harvested acres of 82.400 ma (down 4.348 ma),
projected yields of 170.7 bu/ac (vs the record high of 174.6 in 2016), 2017 U.S. corn production is forecast to
be 14.065 bb – down from the record high of 15.148 bb in 2016.
The USDA forecast “next crop” MY 2017/18 total supplies of 16.435 bb – down 505 mb from last year’s record
high). Total use is forecast at 14.220 bb – down 400 mb from last year’s record high. Ending stocks are
projected to be 2.215 bb (15.58% S/U) – down from 2.320 bb (15.87% S/U) in “current” MY 2016/17. United
States’ corn prices are projected by the USDA to average $3.50 /bu – up from a midpoint estimate of $3.40 /bu
from a year ago – but within the range of $3.20‐$3.60 /bu for “current” MY 2016/17. This scenario is given a
55% likelihood of occurring by KSU Extension Ag Economist D. O’Brien.
Alternative KSU Forecasts for “Next Crop” MY 2017/18: Three alternative KSU‐Scenarios for U.S. corn supply‐
demand and prices are presented for “next crop” MY 2017/18. Each forecast scenario presents the likelihood
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of alternative, lower U.S. corn yields and production than projected by the USDA in the February 23‐24, 2017
Agricultural Outlook Forum for “next crop” MY 2017/18.
KSU “Next Crop” MY 2017/18 Scenario #1) “167.3 bu/ac – 13.786 bb” Scenario (25% probability) assumes:
90.000 ma planted, 82.400 ma harvested, 167.3 bu/ac trend yield, 13.786 bb production, 16.156 bb total
supplies, 14.185 bb total use, 1.971 bb ending stocks, 13.89% S/U, & $3.65 /bu U.S. corn average price for
“next crop” MY 2017/18;
KSU “Next Crop” MY 2017/18 Scenario #2) “165.0 bu/ac – 13.596 bb” Scenario (15% probability) assumes:
90.000 ma planted, 82.400 ma harvested, 165.0 bu/ac yield, 13.596 bb production, 15.966 bb total supplies,
14.080 bb total use, 1.886 bb ending stocks, 13.39% S/U, & $3.70 /bu U.S. corn average price for “next crop”
MY 2017/18;
KSU “Next Crop” MY 2017/18 Scenario #3) “150.0 bu/ac – 12.360 bb” Scenario (5% probability) assumes:
90.000 ma planted, 82.300 ma harvested, 150.0 bu/ac yield, 12.3605 bb production, 14.680 bb total supplies,
13.460 bb total use, 1.220 bb ending stocks, 8.92% S/U, & $4.55 /bu U.S. corn average price for “next crop” MY
2017/18;
World Corn Supply‐Demand: Record high World corn production of 1,040.2 million metric tons (mmt) is
projected for “current” MY 2016/17, up 8.3% from 960.7 mmt in MY 2015/16, and up 2.4% from 1,015.6 mmt
in MY 2014/15. Record high World corn total supplies of 1,250.6 mmt are projected for “current” MY 2016/17,
up from 1,170.5 mmt in MY 2015/16, and from 1,190.3 mmt in MY 2014/15.
World corn exports of 149.0 mmt are projected for “current” MY 2016/17, up 23.0% from 121.1 mmt in MY
2015/16, and up 4.8% from 142.2 mmt in MY 2014/15. Projected record high World corn ending stocks of
217.6 mmt (21.1% S/U) in “new crop” MY 2016/17 are up from 210.4 mmt (21.9% S/U) in MY 2015/16, and
from 209.8 mmt (21.4% S/U) in MY 2014/15.
Although World corn ending stocks are projected to be a record high in “current” MY 2016/17 at 217.6 mmt,
World corn percent ending stocks‐to‐use are forecast to actually decline marginally to 21.1%. Strong World
demand for corn at low prices is expected to continue – especially in the United States, Argentina, Mexico,
Southeast Asia, China, Ukraine, and other Former Soviet Union countries (less Ukraine). Ongoing, strong
demand could cause sharply increased corn market volatility in the summer of 2017 IF any threats to the 2017
U.S. crop emerge.
…
May 2, 2017
Grain Market Outlook
… World Corn Price$
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in 2014, 87.451 ma in 2013 (the record high), 87.365 ma in 2012 (2nd highest), and 83.879 ma in 2011 (Table 1
and Figure 4).
KSU projections for 2017 U.S. corn planted and harvested acres are the less than as those of the USDA, at
88.500 ma planted and 81.031 ma harvested (Table 1a and Figure 4). This KSU forecast is based on current
prospects for 2017 U.S. corn versus soybean prices and profitability and on extremely wet conditions in the
U.S. Corn Belt in early May 2017 which is causing significant corn planting delays.
Figure 4. U.S. Corn Planted Acreage for 2000‐2017 as of the March 31, 2017 USDA NASS Prospective Plantings
Report with an alternative KSU Estimate for 2017
U.S. Corn Yield
In its February 23‐24, 2017 Agricultural Outlook Forum the USDA forecast 2017 U.S. corn average yields to
be 170.7 bu/ac (Table 1 and Figure 5). This yield projection for 2017 is down from the 2016 record high of
174.6 bu/ac, while being up from 168.4 bu/ac in 2015 (3rd highest on record). The 2017 projection of 170.7
bu/ac is also marginally less than the previous record high of 171.0 ma in 2014, while being up from lows of
158.1 bu/ac in 2013 and 123.1 bu/ac in the drought‐ravaged year of 2012. The USDA’s forecast of the “next
crop” 2017 U.S. corn yield of 170.7 bu/ac is given a 55% probability of occurring by KSU (KSU Extension Ag Economist
Daniel O’Brien).
Three (3) alternative probability‐weighted KSU projections for “next crop” 2017 U.S. Corn Yields include
the following forecasts (Table 1a):
1) a 25% probability of a 2017 U.S. corn long term trend yield of 167.3 bu/ac (3.4 bu/ac less than USDA)
2) a 15% probability of a 2017 U.S. corn yield of 165.0 bu/ac (resulting from a “moderate crop stress”)
3) a 5% probability of a 2017 U.S. corn yield of 150.0 bu/ac (resulting from a “serious drought”)
93.5
86.0 …
September 5, 2017
Grain Market Outlook
feeding through at least fall‐winter 2017.
Third, at least moderate continued strength is expected in U.S. corn exports due to low U.S. corn prices
and a moderate weakening of the U.S. dollar against other World currencies. Exports of U.S. corn are expected
to continue at a “decent” pace of 1.850 bb for “new crop” MY 2017/18 even though South American corn
production will continue to be a competitive factor in World trade through at least the end of 2017. Also,
preliminary forecasts for 2018 are that Brazilian corn acreage will be lower due to low prices and poor
profitability in 2017 – which may have a positive effect on U.S. corn exports and price prospects.
Fourth, a possibility exists of broader U.S. and Foreign economic and/or financial system disruptions that
could impact grain, energy, and other commodity markets in 2017‐2018. World geo‐political events could
provide “shocks” to U.S. and World energy and grain markets which could in turn impact grain prices in either
direction depending on the circumstances and the countries involved and their role in global corn export trade.
4. USDA Supply‐Demand & Price Forecast for “New Crop” MY 2017/18
With the USDA’s projection of 2017 U.S. corn plantings at 90.886 million acres or ‘ma’ (down 3.118 ma
from 2016), harvested acres of 83.496 ma (down 3.252 ma), and projected yields of 169.5 bu/ac (vs the record
high of 174.6 in 2016), 2017 U.S. corn production is forecast to be 14.153 bb – down from the record high of
15.148 bb in 2016.
The USDA forecast “new crop” MY 2017/18 total supplies to be 16.573 bb – down 367 mb from last year’s
record high. Total use is forecast at 14.300 bb – down 270 mb from last year’s record high. Ending stocks are
projected to be 2.273 bb (15.90% S/U) – down from 2.370 bb (16.27% S/U) in “old crop” MY 2016/17. United
States’ corn prices are projected to average $3.30 /bu (range of $2.90‐$3.70). This is down $0.05 /bu from the
midpoint estimate of $3.35 /bu from “old crop” MY 2016/17. This scenario is given a 50% likelihood of
occurring by KSU Extension Agricultural Economist D. O’Brien.
5. Alternative KSU Supply‐Demand & Price Forecast for “New crop” MY 2017/18
Four alternative KSU‐Scenarios for U.S. corn supply‐demand and prices are presented for “new crop” MY
2017/18. Each forecast scenario presents the likelihood of lower U.S. corn acreage, yields and production than
projected by the USDA in the August 10, 2017 WASDE report for “new crop” MY 2017/18.
A ‐ KSU “New crop” MY 2017/18 Scenario #1) “167.3 bu/ac – 13.815 bb” Scenario (35% probability) assumes:
89.886 ma planted, 82.577 ma harvested, 167.3 bu/ac trend yield, 13.815 bb production, 16.235 bb total
supplies, 14.245 bb total use, 1.990 bb ending stocks, 13.97% S/U, & $3.60 /bu U.S. corn average price for
“new crop” MY 2017/18;
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B ‐ KSU “New crop” MY 2017/18 Scenario #2) “164.0 bu/ac – 13.543 bb” Scenario (10% probability) assumes:
89.886 ma planted, 82.577 ma harvested, 164.0 bu/ac yield, 13.543 bb production, 15.963 bb total
supplies, 14.120 bb total use, 1.843 bb ending stocks, 13.05% S/U, & $3.75 /bu U.S. corn average price for
“new crop” MY 2017/18;
C ‐ KSU “New crop” MY 2017/18 Scenario #3) “160.0 bu/ac – 13.212 bb” Scenario (4% probability) assumes:
89.886 ma planted, 82.577 ma harvested, 160.0 bu/ac yield, 13.212 bb production, 15.632 bb total
supplies, 13.920 bb total use, 1.712 bb ending stocks, 12.30% S/U, & $3.85 /bu U.S. corn average price for
“new crop” MY 2017/18;
D ‐ KSU “New crop” MY 2017/18 “Wildcard” Scenario #4) “167.3 bu/ac – 13.815 bb” Scenario (1%
probability) assumes: 89.886 ma planted, 82.577 ma harvested, 167.3 bu/ac trend yield, 13.815 bb
production, 16.235 bb total supplies, 14.085 bb total use, 2.150 bb ending stocks, 15.26% S/U, & $3.45 /bu
U.S. corn average price for “new crop” MY 2017/18;
Note: even with significant reductions in 2017 U.S. corn production as represented in the KSU Scenarios A, B, C
and D above, the presence of large beginning stocks of 2.370 bb in “new crop” MY 2017/18 limit the
“tightness” of corn supply‐demand balances, and hinders any upward price responses.
5. World Corn Supply‐Demand – With & Without China
World corn production of 1,033.5 million metric tons (mmt) is projected for “new crop” MY 2017/18, down
1.7% from the record high of 1,070.5 mmt in “old crop” MY 2016/17, but still up 7.1% from 969.5 mmt in MY
2015/16. Near record World corn total supplies of 1,262.1 mmt are projected for “new crop” MY 2017/18,
down marginally from the record high of 1,284.0 mmt in “old crop” MY 2016/17, but up from 1,178.7 mmt in
MY 2015/16.
World corn exports of a 152.0 mmt are projected for “new crop” MY 2017/18, down 6.4% from the record
high of 162.4 mmt in “old crop” MY 2016/17, and up 27.1% from 119.6 mmt in MY 2015/16. Projected World
corn ending stocks of 200.9 mmt (18.9% S/U) in “new crop” MY 2017/18 are down from the record high 228.6
mmt (21.7% S/U) in “old crop” MY 2016/17, and from 213.5 mmt (22.1% S/U) in MY 2015/16.
An alternative view of the World corn supply‐demand is presented if Chinese corn usage and ending stocks
are isolated from the World market. “World Less China” corn ending stocks are projected to be 119.6 mmt
(14.5% S/U) in “new crop” MY 2017/18, down from 127.3 mmt (15.5% S/U) in “old crop” MY 2016/17, but up
from 102.7 mmt (13.7% S/U). These figures show that World stocks‐to‐use of corn less China’s direct influence
are projected to be down approximately 23% (i.e., 14.5% S/U for the “World Less China” versus 18.9% S/U for
the “World” overall in “new crop” MY 2017/18).
These figures also show that Chinese ending stocks of corn as proportion of the World overall is declining –
down from 51.9% in MY 2015/16 to 44.3% in “old crop” MY 2016/17, and down to 40.5% in “new crop” MY
2017/18. The deliberate actions taken by the Chinese government in recent years to reduce feedgrain
stockpiles is impacting the relative amount of corn stocks they hold in the World corn market.
…
September 19, 2017
Grain Market Outlook
… I‐C. Kansas Corn Seasonal Average Price Trends
Season Average Prices for “New Crop” MY 2017/18
Except for a brief period of relative price strength during October 2016, corn price movements in the U.S.
in “old crop” 2016/17 marketing year were generally consistent with long‐term seasonal average patterns
through March 2017, but then trended “lower” during April‐June than the average trend during previous years
(Figure 2). However, after U.S. corn prices “held up” higher in July 2017 than long‐term trends, they resumed
their pattern of decline in later summer during August.
Projections of “new crop” MY 2017/18 U.S. corn average prices come from an adjusted version of the
USDA corn futures price forecast model (http://www.ers.usda.gov/data‐products/season‐average‐price‐forecasts.aspx) and are
based on U.S. cash corn and CME corn futures prices as of September 7, 2017.
This updated version of the USDA futures‐based price model projects U.S. corn season average prices for
“new crop” MY 2017/18 of $3.63 per bushel. This is up $0.43 per bushel from the September 12th USDA
WASDE midpoint projection of $3.20, and just above the upper end of the USDA forecast range of $2.80‐$3.60
per bushel. The seasonal price patterns presented in Figure 2 are calculated as a percent of an adjusted
USDA’s futures‐based price model season average price projection for “new crop” MY 2016/17 of $3.63 per
bushel. It is likely that JULY 2018, SEPT 2018, and DEC 2018 CME corn futures prices are higher than they
would be if grain markets were more confident of an average‐large 2018 U.S. corn crop. These corn futures
contract prices may decline if 2018 crop problems ultimately do NOT emerge in Spring‐early Summer 2018.
CME DEC 2017 Corn Futures
July 19, 2017 – September 18, 2017
CME JULY 2018 Corn Futures
July 19, 2017 – September 18, 2017
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Figure 2. Kansas Corn Seasonal Price Index (MY 1999/00 – MY 2015/16) plus “Old Crop” MY
2016/17 and “New Crop” MY 2017/18 Estimates as of September 14, 2017 (Sources: KSU
www.AgManager.info & USDA ERS http://www.ers.usda.gov/data‐products/season‐average‐price‐forecasts.aspx)
U.S. Trade Weighted Dollar Index & Global Corn Prices
Since 1973 the monthly trade‐weighted index value of the U.S. dollar relative to the currencies of U.S.
trading partner countries has averaged 94.32 with a median value of 93.16 – indicating some positive
skewness in U.S. dollar index values (i.e., a few very high values pulling up the average) (Figure 3).
Figure 3. Monthly U.S. Trade Weighted Dollar Index (Major Currencies) vs Global Corn Prices (in
USD$s), January 1973 to September 8, 2017 (Source: St. Louis Federal Reserve Bank, FRED) …
April 1, 2005
Industry Economics & Trade
Spongiform Encephalopathy (BSE) Events … donations from individuals who
previously resided in BSE affected countries … increase in testing relative to previous
surveillance levels.
Costs …
January 1, 2011
Land Leasing
Forms
the same as those of
the previous landowner(s).
7
PART III
Developing … 25
are used to add items previously shared (lines
17 through … achieve desired split Add items previously
shared or include a cash …
January 30, 2023
Ag Law Issues
Unexpected
catastrophic events such as the war in Ukraine … that to be
delayed. In any event, the Supreme Court will have … profits. While many cases had previously been filed on
the dicamba …
June 28, 2018
Hedging & Options
September 15, 2021
Fed Cattle Pricing
agreements. Similar to the
previous discussion, we focus on relative … represents less volume than previously, though in fed
cattle, cash … with black-swan types of events have raised
concerns about …
May 14, 2014
Grain Market Outlook
crop production prospects in 2014 compared to a year ago for U.S. hard red winter wheat, soft red winter
wheat, and while wheat, and b) geopolitical conflicts in the Black Sea Region between Ukraine and Russia that
could hinder or diminish that region’s wheat and coarse grains exports ‐ and ultimately boost U.S. wheat
export prospects.
Figure 1. JULY 2014 CME Kansas Wheat Futures Price Charts (electronic trade)
“Next crop” or “new crop” JULY 2014 Kansas City wheat futures prices have responded to the release of
the May 9th USDA reports by trading lower. JULY 2014 CBOT Kansas City wheat efutures prices opened at
$8.41 ¾ on Friday, May 9th – the day of the release of the USDA reports at midday (i.e., 11 a.m., central time),
and traded in a low‐high range of $8.28 to $8.45 ¼ during the session before closing $0.13 ¾ lower for the day
at $8.28 ¾ /bu (Figure 1). After the weekend, on Monday, May 12th JULY 2014 Kansas City wheat efutures
prices traded in the range from a low of $8.09 ½ up to a high of $8.26 ½, before closing at $8.24 ½, down $0.04
¼ per bushel from the previous trading day. Longer term, electronic July 2014 Kansas City Hard Red Winter
Wheat futures prices have been trending sharply higher since trading at a low of $5.99 ¾ on January 29th.
$5.99 ¾ Low, Jan. 29th
$7.23 ¼ …