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June 18, 2014
Grain Market Outlook
“new crop” MY 2014/15 are up from 1,120 mmt in MY 2012/13,
and up from 1,003 mmt in MY 2011/12. Projected World corn ending stocks of 182.7 mmt (18.9% S/U) in MY
2014/15 are up from 169.1 mmt (17.8% S/U) in MY 2013/14, and up from 138.1 mmt (16.0% S/U) in MY
2011/12. Combined “new crop” MY 2014/15 corn production for major export competitors Brazil (74.0 mmt –
down 2.0) and Argentina (26.0 mmt – up 2.0) is projected to be unchanged – with harvests with the U.S. in
World grain export markets in late winter‐spring 2015. However, these projections are still uncertain given the
possibility of a strong El Nino event beginning in mid‐2014.
A number of key corn market factors in “new crop” MY 2014/15 are still unknown, including a) final 2014 U.S.
corn planted acreage, b) uncertainty regarding 2014 U.S. and World corn production prospects should an El
Nino‐related weather patterns occur in 2014 as is now forecast, and c) the potential impact of ongoing and
escalating geopolitical conflicts in the Black Sea Region between major World coarse grain and wheat
exporters Russia and the Ukraine, as well as in the Middle East. Escalating conflict in the Middle East could
impact World oil and U.S. bioenergy market prices, and have a corresponding impact on feedgrain markets.
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I. U.S. Corn Market Situation and Outlook
I‐A. June 2014 USDA Reports & Projections for “New Crop” MY 2014/15
On June 11, 2014 the USDA World Agricultural Outlook Board (WAOB) released its June 2014 World
Agricultural Supply and Demand Estimates (WASDE) report – containing U.S. and World corn supply‐demand
and price projections for both the “old crop” 2013/14 marketing year as well as for “new crop” MY 2014/15.
The “old crop” 2013/14 marketing year will end on August 31, 2014, while the “new crop” 2014/15 U.S. wheat
marketing year will last from September 1, 2014 through August 31, 2015.
The USDA National Agricultural Statistics Service (NASS) will release its 2014 Acreage and June 1st
Quarterly Stocks reports on Friday, June 30. The 2014 Acreage report will provide a survey‐based update of
2014 planted and harvested acreage of U.S. corn and other crops. The June 1st Quarterly Stocks report will
provide information on the pace of U.S. corn usage during the March‐April‐May 2014 quarter, and allow for
increased accuracy in projecting U.S. corn “old crop” MY 2013/14 ending stocks on August 31, 2014.
I‐B. Corn Futures Trends Since the June 11th USDA Reports
The “old crop” JULY 2014 corn futures market contract responded in a volatile and ultimately negative
manner to the information in the June 11th USDA reports. On the day of the report – Wednesday, June 11th –
Chicago Board of Trade (CBOT) JULY 2014 corn futures prices opened at $4.45 ½ per bushel, and traded as
high as $4.49 ¾ and as low as $4.39 ½ during the session, before settling at $4.41 – down $0.04 ½ for the day
(Figure 1). The USDA report findings were publicly released at approximately mid‐session, i.e., 12:00 noon
eastern time (11:00 a.m. central) that day. Since then JULY 2014 corn futures prices have traded first higher
and then lower – ranging from a high of $4.49 ¾ on Friday, June 13th to a low of $4.35 ½ on Tuesday, June 17th
before closing at $4.38 ¾ on the same day.
Figure 1. July 2014 and December 2014 CME Corn Futures Price Charts (electronic trade) …
March 19, 2014
Grain Market Outlook
begin selling their 2013 crops in storage “en mass”, or some combination of
crop weather‐development factors negatively affect the 2014 U.S. corn crop and/or World geopolitical events
bring volatility to grain markets, there still seems to be limits as to how high U.S. cash corn prices can move.
U.S. Corn Supply‐Demand for “Current” 2013/14: The USDA left unchanged its forecast 2013 U.S. corn
production at a record high 13.925 billion bushels (bb) – up from 10.780 bb in 2012. The forecast of “current”
MY 2013/14 total supplies of 14.781 bb was also unchanged, while forecasts exports of 1.625 bb and total use
of 13.325 bb were both raised 25 mb due to strong export shipments and forward sales to date in the current
marketing year. As a result, “current” MY 2013/14 ending stocks were projected to be 1.456 bb – down 25 mb
from February, and down 336 mb from December 2013, but still up from 821 mb in “last year’s” MY 2012/13.
Projected ending stocks‐to‐use of 10.9% for “current” MY 2013/14 has continued to trend lower on a monthly
basis since a projection of 14.7% in the November 2013 WASDE, but is still up sharply from 7.4% for “last
year’s” MY 2012/13 and 7.9% in MY 2011/12. U.S. average corn prices for “current” MY 2013/14 are forecast
to be in the range of $4.25‐$4.75 / bu, down from a record high $6.89 /bu in “last year’s” MY 2012/13.
USDA U.S. Corn Forecasts for “Next Crop” MY 2014/15: Based on projections from the Feb. 21 USDA
Agricultural Outlook Conference, with small adjustments made in the beginning stocks estimate, forecast 2014
U.S. corn production and “next crop” MY 2014/15 supply‐demand and price scenarios are: 92.0 ma planted,
84.6 ma harvested, 165.3 bu/ac yields, a 13.985 bb 2014 U.S. corn crop, 13.380 bb total use, 2.086 bb ending
stocks, 15.6% S/U, & ≈$3.90 average price per bu.
KSU U.S. Corn Forecasts for “Next Crop” MY 2014/15: KSU projections of 2014 U.S. corn production and “next
crop” MY 2014/15 supply‐demand and price scenarios are: a) KSU “Low Production” Scenario: 20% prob. of
90.0 ma planted, 81.9 ma harvested, 154.4 bu/ac yields, a 12.645 bb 2014 U.S. corn crop, 12.775 bb total use,
1.366 bb ending stocks, 10.7% S/U, & $4.30‐$5.30 ($4.80 average) /bu; b) KSU “Likely Production” Scenario:
60% prob. of 92.5 ma planted, 84.2 ma harvested, 159.4 bu/ac yields, a 13.421 bb 2014 U.S. corn crop, 13.275
bb total use, 1.632 bb ending stocks, 12.3% S/U, & $3.75‐$4.75 ($4.25 average) /bu; and c) KSU “High
Production” Scenario: 20% prob. of 95.0 ma planted, 86.5 ma harvested, 164.4 bu/ac yields, a 14.221 bb 2014
U.S. corn crop, 13.650 bb total use, 2.057 bb ending stocks, 15.1% S/U, & $3.40‐$4.40 ($3.90 average) /bu.
World Corn: World corn total supplies of 1,102 mmt in “current” MY 2013/14 are up from 996 mmt in “last
year’s” MY 2012/13, and up from 1,015 mmt in MY 2011/12. Projected World corn ending stocks of 158.5
mmt (16.8% S/U) in “current” MY 2013/14 are up from 134.7 mmt (15.6% S/U) in “last year’s” MY 2012/13,
and up from 132.8 mmt (15.0% S/U) in MY 2011/12. Corn production in major export competitors Brazil and
Argentina is projected to be lower in the coming year in favor of increased soybean production. Conversely,
corn production in China and Ukraine are projected to be sharply higher in the coming year – injecting a
degree of caution on U.S. corn market prospects for both the remainder of “current” MY 2013/14 and for
“next crop” MY 2014/15. …
July 16, 2014
Grain Market Outlook
roduction in North America or other major wheat producing regions of the World, or geopolitically‐driven
disruptions to trade World wheat markets in such places as the Middle East or the Black Sea region. Unless or
until such disruptive events as these would occur, World wheat market prospects are pointing to steady‐to‐
lower World wheat prices.
USDA U.S. Wheat Forecast for “New Crop” MY 2014/15: Compared to a year earlier, the USDA projected
lower 2014 U.S. wheat production, reduced wheat usage, an increase in U.S. wheat ending stocks and %
stocks‐to‐use, and lower prices in “new crop” MY 2014/15. The USDA’s projected “new crop” market scenario
is: 56.5 million acres (ma) planted, 46.2 ma harvested, 81.9% harvested‐to‐planted acres, 43.1 bu/ac yield (up
from 42.3 bu/ac a month ago), a 1.992 billion bushel (bb) 2014 U.S. wheat crop (up 50 million bushels or ‘mb’),
2.741 bb total supplies (up 46 mb), 900 mb exports (down 25 mb), 2.081 bb total use (down 40 mb), 660 mb
ending stocks (up 86 mb), 31.7% ending stocks‐to‐use (up from 27.1%), and $6.60 average price per bu. (range
of $6.00 to $7.20) – down from $7.00 /bu.
KSU U.S. Wheat Forecast for “New Crop” MY 2014/15: KSU projections of “new crop” MY 2014/15 supply‐
demand balances and prices are as follows: a) “Likely Production” Scenario: 65% prob. of 46.2 ma harvested,
43.1 bu/ac, 1.992 bb 2014 U.S. wheat production, 2.741 bb U.S. wheat supplies, 900 mb exports, 2.081 bb total
use, 660 mb ending stocks, 31.7% S/U, & $6.10 /bu; b) “Low Production” Scenario: 20% prob. of 45.4 ma
harvested, low yields of 41.1 bu/ac (both harvested acres and yield lower than USDA), 1.868 bb 2014 U.S.
wheat production, 2.628 bb U.S. wheat supplies, 890 mb exports, 2.061 bb total use, 567 mb ending stocks,
27.5% S/U, & $6.55 /bu; and c) “Expected Production – Higher Exports” Scenario: 15% prob. of 46.2 ma
harvested, yields of 43.1 bu/ac, 1.992 bb 2014 U.S. wheat production, 2.741 bb U.S. wheat supplies, 1.050 bb
exports (up 150 mb from USDA forecast), 2.231 bb total use, 510 mb ending stocks, 22.9% S/U, & $7.50 /bu.
USDA World Wheat: World wheat total supplies of 889.5 mmt in “new crop” MY 2014/15 are down marginally
from 889.8 mmt in “old crop” MY 2013/14, but up from 854.9 mmt in MY 2012/13. Projected World wheat
ending stocks in “new crop” MY 2014/15 of 189.5 mmt (27.0% S/U) are up from 184.3 mmt (26.1% S/U) in MY
2013/14, and from 175.6 mmt (25.9% S/U) in MY 2012/13.
For market perspective these levels of World wheat stocks need to be analyzed relative to the historic World
wheat stocks minimum of 129.4 mmt (21.0% S/U) in MY 2007/08. Year‐over‐year increases are projected for
wheat exports in “new crop” MY 2014/15 for Argentina (+4.5 mmt), Brazil (+0.4 mmt), and Russia (+1.0 mmt),
with decreases forecast for the U.S. (‐7.7 mmt), Australia (‐0.5 mmt), Canada (‐1.5 mmt), the EU (‐2.5 mmt),
India (‐2.4 mmt), Kazakhstan (‐2.4 mmt), and Ukraine (‐0.5 mmt). …
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.
…
October 25, 2017
Grain Market Outlook
t least spring
2018 if not into the summer months.
Third, at least “moderate” continued strength is expected in U.S. corn exports due to low U.S. corn prices
and also to a moderate weakening of the U.S. dollar against other World currencies. Exports of U.S. corn are
expected to continue at a “decent” pace of 1.850 bb for “new crop” MY 2017/18 even though South American
corn production will continue to be a competitive factor in World trade through at least the end of 2017. Also,
preliminary forecasts for 2018 are that Brazilian corn acreage and production will be lower due to low prices
and poor profitability in 2017. Combined with emerging weather concerns in Brazil – these factors “could”
have a positive impact on U.S. corn exports and price prospects in spring‐summer 2018.
Fourth, a continuing threat exists of U.S. and Foreign economic and/or financial system disruptions that
could impact grain, energy, and other commodity markets in 2017‐2018. World geo‐political events could
provide “shocks” to U.S. and World energy and grain markets which could in turn impact grain prices in either
direction depending on the circumstances, the countries involved, and their role in global corn export trade.
4. USDA Supply‐Demand & Price Forecast for “New Crop” MY 2017/18
In the October 12th Crop Production report, the USDA adjusted its projection of a) 2017 U.S. corn plantings
at 90.429 million acres or ‘ma’ (down 3.575 ma from 2016), b) harvested acres of 83.119 ma (down 3.629 ma),
c) projected yields of 171.8 bu/ac (vs the record high of 174.6 in 2016), and d) 2017 U.S. corn production of
14.280 bb – down from the record high of 15.148 bb in 2016.
The USDA forecast “new crop” MY 2017/18 total supplies to be 16.625 bb – down 317 mb from last year’s
record high. Total use is forecast at 14.285 bb – down 362 mb from last year’s record high. Ending stocks are
projected to be 2.240 bb (16.38% S/U) – down from 2.295 bb (15.67% S/U) in “old crop” MY 2016/17. United
States’ corn prices are projected to average $3.20 /bu (range of $2.80‐$3.60). This is down $0.16 /bu from the
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midpoint estimate of $3.36 /bu from “old crop” MY 2016/17. This scenario is given a 75% likelihood of
occurring by KSU Extension Agricultural Economist D. O’Brien.
5. Alternative KSU Supply‐Demand & Price Forecast for “New Crop” MY 2017/18
Three alternative KSU‐Scenarios for U.S. corn supply‐demand and prices are presented for “new crop” MY
2017/18. Each forecast scenario presents the likelihood of lower U.S. corn acreage, yields, and production
than projected by the USDA in the October 12, 2017 WASDE report for “new crop” MY 2017/18.
A ‐ KSU “New Crop” MY 2017/18 Scenario #1) “169.5 bu/ac – 14.059 bb” Scenario (20% probability) assumes:
90.404 ma planted, 82.941 ma harvested, 169.5 bu/ac trend yield, 14.059 bb production, 16.404 bb total
supplies, 14.241 bb total use, 2.164 bb ending stocks, 15.19% S/U, & $3.35 /bu U.S. corn average price;
B ‐ KSU “New Crop” MY 2017/18 Scenario #2) “167.3 bu/ac – 13.876 bb” Scenario (5% probability) assumes:
90.404 ma planted, 82.941 ma harvested, 167.3 bu/ac yield, 13.876 bb production, 16.221 bb total
supplies, 14.196 bb total use, 2.026 bb ending stocks, 14.27% S/U, & $3.45 /bu U.S. corn average price;
C ‐ KSU “New Crop” MY 2017/18 “Wildcard” Scenario #3) “169.5 bu/ac – 14.059 bb” Scenario (???% prob.)
assumes: 90.404 ma planted, 82.941 ma harvested, 169.5 bu/ac trend yield, 14.059 bb production, 16.404
bb total supplies, 13.926 bb total use, 2.479 bb ending stocks, 17.80% S/U, & ≈ $3.10 /bu U.S. corn
average;
Note: even with moderate reductions in 2017 U.S. corn production as represented in the KSU Scenarios A, B
and C above, the presence of large beginning stocks of 2.295 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 1,038.8 million metric tons (mmt) is projected for “new crop” MY 2017/18, down
3.4% from the record of 1,075.3 mmt in “old crop” MY 2016/17, but still up 6.8% from 972.4 mmt in MY
2015/16. World corn total supplies of 1,265.8 mmt are projected for “new crop” MY 2017/18, down from the
record high of 1,289.3 mmt in “old crop” MY 2016/17, but up from 1,181.8 mmt in MY 2015/16.
World corn exports of a 150.7 mmt are projected for “new crop” MY 2017/18, down 8.0% from the record
high of 163.8 mmt in “old crop” MY 2016/17, and up 25.9% from 119.7 mmt in MY 2015/16. Projected World
corn ending stocks of 201.0 mmt (18.9% S/U) in “new crop” MY 2017/18 are down from the record high 227.0
mmt (21.4% S/U) in “old crop” MY 2016/17, and from 214.0 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 121.8 mmt
(14.8% S/U) in “new crop” MY 2017/18, down from 125.7 mmt (15.1% S/U) in “old crop” MY 2016/17, but up
from 103.2 mmt (13.8% S/U). These figures show that World stocks‐to‐use of corn less China’s direct influence
are projected to be down approximately 22% (i.e., 14.8% S/U for the “World Less China” versus 18.9% S/U for
the “World” overall in “new crop” MY 2017/18).
At the same time, these figures also show that Chinese ending stocks of corn as proportion of the World
total are declining – down from 51.8% in MY 2015/16, to 44.6% in “old crop” MY 2016/17, and down to 39.4%
in “new crop” MY 2017/18. The deliberate actions in recent years ‐ taken by the Chinese government to
reduce feedgrain stockpiles – is impacting the relative amount of World total corn stocks they hold.
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I. USDA Reports, Corn Futures, Seasonal Prices & U.S. Dollar
I‐a. October 12th USDA Crop Production & WASDE Reports
On October 12th the USDA World Agricultural Outlook Board (WAOB) released its October 2017 World
Agricultural Supply and Demand Estimates (WASDE) report – containing U.S. and World corn supply‐demand
and price projections for the 2015/16, “old crop” 2016/17, and “new crop” 2017/18 marketing years (MY).
The “new crop” MY 2017/18 for U.S. corn began on September 1, 2017 and will last through August 31, 2018.
On the same day the USDA National Agricultural Statistics Service (NASS) released its October 2017 Crop
Production report. In this report the USDA used a combination of in‐field objective yield measurements and
farmer surveys conducted between September 26th and October 5th to estimate expected U.S. corn yields as of
October 1st. The objective yield surveys for corn were conducted in the major producing states for
approximately 75% of U.S. corn production. Counts were made within sample plots in person by USDA
enumerators, recording number of corn plants and ears, and ear weights in order to calculate the projected
2017 biological yields for each plot. Average percent harvest loss was then subtracted from these biological
yield estimates to obtain a net yield for each plot sampled.
The same corn plots which were sampled for the August and September USDA NASS Crop Production
reports were revisited for the October report. The upcoming November 9th USDA NASS Crop Production
report will also be based on a similar combination of farmers’ own crop observations and harvested yield
reports, and actual in‐the‐field yield measurements and conditions for fields remaining to be harvested. A final
USDA NASS Crop Production Summary report with an estimate of 2017 U.S. corn production will be reported
in January 2018.
I‐b. CME DECEMBER 2017 & JULY 2018 Corn Futures Trends
DECEMBER 2017 CME Corn Futures
Following a low of $3.58 ½ on August 31, 2016, DECEMBER 2017 Chicago Mercantile Exchange (CME) corn
futures prices trended upward over time to highs of $4.04 on February 28, 2017, $4.09 on June 8th, and $4.17
¼ on July 11th (Figure 1). Following that high, DEC 2017 corn futures prices have declined to lows of $3.44 ¼ on
August 31st, $3.42 ½ on October 12th, and $3.43 on October 23rd ‐ before closing at $3.52 ¾ on October 24th.
JULY 2018 CME Corn Futures
In a similar trading pattern to DEC 2017 corn futures, following a low of $3.79 on August 31, 2016, JULY
2018 CME corn futures prices trended upward over time to highs of $4.18 ¾ on February 28, 2017, $4.26 ½ on
June 8th, and $4.34 ¼ on July 11th (Figure 1). Following that high, JULY 2018 corn futures prices declined to
lows of $3.71 on August 31, 2017, $3.72 ½ on September 12th, $3.73 on October 12th, and $3.73 ¼ on October
23rd ‐ before closing at $3.82 ½ on October 24th.
CME Corn Futures DEC 2017 – JULY 2018 Contract Spreads
The total futures carrying charge or “term spread” between DEC 2017 and JULY 2018 corn futures on
Wednesday, October 25th in mid‐morning trading was $0.29 ½ per bushel (i.e., $3.83 ¼ for JULY 2018 Corn less
Page | 5
$3.53 ¾ for DEC 2017 Corn), or $0.0421 per bushel per month over a 7‐month period. This compares to
commercial grain storage charges in Kansas grain elevators in the range of $0.04 to $0.05 per bushel per
month – before accounting for interest, additional handling costs, or other discounts.
Figure 1. DEC 2017 & JULY 2018 CME Daily Corn Futures Price Charts (as of October 24, 2017)
ne …
November 21, 2017
Grain Market Outlook
corn prices
and also to a moderately weaker U.S. dollar against other World currencies compared to a year ago. Exports of
U.S. corn are expected to continue at a “decent” pace of 1.925 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 and production will be lower
due to low prices and poor profitability in 2017, as well as a delayed 2nd crop of corn in parts of the country.
Combined with the potential for crop‐weather concerns in Brazil in coming months – these factors “could”
have a positive impact on U.S. corn exports and price prospects in spring‐summer 2018.
Fourth, a continuing threat exists of U.S. and Foreign economic and/or financial system disruptions that
could impact grain, energy, and other commodity markets in 2017‐2018. World geo‐political events could
provide “shocks” to U.S. and World energy and grain markets which could in turn impact grain prices in either
direction depending on the circumstances, the countries involved, and their role in global corn export trade.
4. USDA Supply‐Demand & Price Forecast for “New Crop” MY 2017/18
In the November 12th Crop Production report, the USDA raised its projections of a) projected yields up to a
record high of 175.4 bu/ac (vs the previous record of 174.6 in 2016), and b) 2017 U.S. corn production up to
14.578 bb – down from the record high of 15.148 bb in 2016.
The USDA raised its forecast “new crop” MY 2017/18 total supplies to 16.922 bb – down marginally (20
mb) from last year’s record high. Total use is forecast at 14.435 bb – down 212 mb from last year’s record
high. Ending stocks are projected to be a 2.487 bb (17.2% S/U) – up from 2.295 bb (15.7% S/U) in “old crop”
MY 2016/17. United States’ corn prices are projected to average $3.20 /bu (range of $2.80‐$3.60). This is
down $0.16 /bu from $3.36 /bu from “old crop” MY 2016/17. This scenario is given an 80% likelihood of
occurring by KSU Extension Agricultural Economist D. O’Brien.
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5. Alternative KSU Supply‐Demand & Price Forecast for “New Crop” MY 2017/18
Three alternative KSU‐Scenarios for U.S. corn supply‐demand and prices are presented for “new crop” MY
2017/18. These forecast scenarios vary from the USDA’s projection in the November 9, 2017 WASDE report
for “new crop” MY 2017/18.
A ‐ KSU “Higher Exports” MY 2017/18 Scenario) “2.250 bb Exports” Scenario (10% probability) assumes:
90.404 ma planted, 82.941 ma harvested, 175.4 bu/ac trend yield, 14.548 bb production, 16.893 bb total
supplies, 2.250 bb exports, 14.735 bb total use, 2.158 bb ending stocks, 14.65% S/U, & $3.50 /bu U.S. corn
average price;
B ‐ KSU “Lower Exports” MY 2017/18 Scenario) “1.800 bb Exports” Scenario (5% probability) assumes: 90.404
ma planted, 82.941 ma harvested, 175.4 bu/ac trend yield, 14.548 bb production, 16.893 bb total supplies,
1.800 bb exports, 14.310 bb total use, 2.583 bb ending stocks, 18.05% S/U, & $3.15 /bu U.S. corn average
price;
C ‐ KSU “Lower Yield” MY 2017/18 Scenario) “172.5 bu/ac – 14.307 bb crop” Scenario (5% probability)
assumes: 90.404 ma planted, 82.941 ma harvested, 172.5 bu/ac trend yield, 14.307 bb production, 16.652
bb total supplies, 14.435 bb total use, 2.217 bb ending stocks, 15.36% S/U, & $3.40 /bu U.S. corn average;
Note: The presence of large beginning stocks of 2.295 bb in “new crop” MY 2017/18 limit the “tightness” of
corn supply‐demand balances in scenarios “A” and “C”, and hinder potential upward price responses.
5. World Corn Supply‐Demand – With & Without China
World corn production of 1,043.9 million metric tons (mmt) is projected for “new crop” MY 2017/18, down
3.9% from the record of 1,074.8 mmt in “old crop” MY 2016/17, but still up 7.3% from 972.9 mmt in MY
2015/16. World corn total supplies of 1,270.5 mmt are down 1.45% from the record high 1,289.2 mmt in “old
crop” MY 2016/17, and still up 7.4% from 1,182.4 mmt in MY 2015/16.
World corn exports of a 151.6 mmt are projected for “new crop” MY 2017/18, down 7.3% from the record
high of 163.6 mmt in “old crop” MY 2016/17, and up 26.7% from 119.7 mmt in MY 2015/16. Projected World
corn ending stocks of 203.9 mmt (19.1% S/U) in “new crop” MY 2017/18 are down from the record high 226.6
mmt (21.3% S/U) in “old crop” MY 2016/17, and from 214.4 mmt (22.2% S/U) in MY 2015/16.
An alternative view of the World corn supply‐demand is presented if Chinese corn usage and ending stocks
are isolated from the World market. “World‐Less‐China” corn ending stocks are projected to be 125.2 mmt
(15.1% S/U) in “new crop” MY 2017/18, down from 125.9 mmt (15.2% S/U) in “old crop” MY 2016/17, but up
from 103.7 mmt (13.8% S/U) in MY 2015/16. These figures show that World stocks‐to‐use of corn less China’s
direct influence are projected to be approximately 21% lower (i.e., 15.1% S/U for the “World‐Less‐China”
versus 19.1% S/U for the “World” overall in “new crop” MY 2017/18).
At the same time, these figures also show that Chinese ending stocks of corn as proportion of the World
total are declining – down from 51.7% in MY 2015/16, to 44.5% in “old crop” MY 2016/17, and down to 38.6%
in “new crop” MY 2017/18. The deliberate actions in recent years ‐ taken by the Chinese government to
reduce feedgrain stockpiles – is impacting the relative amount of World total corn stocks they hold. These
actions may also eventually increase Chinese import demand for both U.S. corn and grain sorghum.
…
December 21, 2017
Grain Market Outlook
new crop” MY 2017/18 U.S. corn exports
because of a) low U.S. corn prices, b) expectations of significantly tighter foreign stocks and percent (%)
stocks‐to‐use for corn, and c) the eventual “using up” of competing South American corn exports in early 2018.
Early forecasts are for 2018 Brazilian corn production to be 95 million metric tons (mmt) in this marketing
year with harvests lasting from February through May. Early forecasts are for 2018 Argentina corn production
to be 42 mmt in this marketing year with harvests lasting from March through May. However, dry conditions
may limit 2018 corn production in Argentina and southern Brazil – and subsequently support U.S. corn exports.
Fourth, a continuing threat exists of U.S. and Foreign economic and/or financial system disruptions that
could impact grain, energy, and other commodity markets in 2018. World geo‐political events could provide
“shocks” to U.S. and World energy and grain markets which could in turn impact grain prices in either direction
depending on the circumstances, the countries involved, and their role in global corn export trade.
4. USDA Supply‐Demand & Price Forecast for “New Crop” MY 2017/18
In the December 12th Crop Production reports, the USDA left unchanged its projections of a) projected
yields up to a record high of 175.4 bu/ac (vs the previous record of 174.6 in 2016), and b) 2017 U.S. corn
production up to 14.578 bb – down from the record high of 15.148 bb in 2016. The also USDA left unchanged
its forecast “new crop” MY 2017/18 total supplies to 16.922 bb – down marginally (20 mb) from last year’s
record high. Total use is forecast at 14.485 bb – raised 50 mb from November on higher ethanol use, but still
down 162 mb from last year’s record high. Ending stocks are projected to be a 2.437 bb (16.8% S/U) – up from
2.295 bb (15.7% S/U) in “old crop” MY 2016/17. United States’ corn prices are projected to average $3.20 /bu
(range of $2.85‐$3.55). This is down $0.16 /bu from $3.36 /bu from “old crop” MY 2016/17. This scenario is
given an 80% likelihood of occurring by KSU Extension Agricultural Economist D. O’Brien.
5. Alternative KSU Supply‐Demand & Price Forecast for “New Crop” MY 2017/18
Two alternative KSU‐Scenarios for U.S. corn supply‐demand and prices are presented for “new crop” MY
2017/18. These projections are to show how varying corn export outcomes could affect the USDA’s projection
in the December 9, 2017 WASDE report.
A ‐ KSU “Higher Exports” MY 2017/18 Scenario: “2.250 bb Exports” Scenario (10% probability) assumes:
90.348 ma planted, 82.890 ma harvested, 175.4 bu/ac trend yield, 14.539 bb production, 16.884 bb total
supplies, 2.250 bb exports, 14.785 bb total use, 2.099 bb ending stocks, 14.20% S/U, & $3.55 /bu U.S. corn
average price;
Page | 3
B ‐ KSU “Lower Exports” MY 2017/18 Scenario: “1.800 bb Exports” Scenario (10% probability) assumes:
90.348 ma planted, 82.890 ma harvested, 175.4 bu/ac trend yield, 14.539 bb production, 16.884 bb total
supplies, 1.800 bb exports, 14.360 bb total use, 2.524 bb ending stocks, 17.58% S/U, & $3.20 /bu U.S. corn
average price;
6. USDA Supply‐Demand & Price Forecast for “Next Crop” MY 2018/19
In the November 28th Long Term Baseline projections, the USDA forecast for “next crop” MY 2018/19 that
2018 U.S. corn planted and harvested acres would equal 91.0 million acres (ma) and 83.7 ma, respectively,
both up from 90.429 ma planted and 83.119 ma harvested in 2017. Corn yields in 2018 are forecast at 173.5
bu/ac, down from the record high of 175.4 bu/ac in 2017. U.S. corn production is 2018 is projected to be
14.520 bb – down from 14.578 bb now projected for 2017.
The USDA forecast “new crop” MY 2017/18 total supplies to 17.007 bb – adjusted for changes in the
December WASDE report in MY 2017/18 ending stocks. Total use is forecast at 14.450 bb – down 35 mb from
this current marketing year. Ending stocks are projected to be a 2.557 bb (17.7% S/U) – up from 2.437 bb
(16.8% S/U) in “new crop” MY 2017/18. United States’ corn prices are projected to average $3.30 /bu – up
from $3.20 /bu in “new crop” MY 2017/18.
5. World Corn Supply‐Demand – With & Without China
World corn production of 1,044.8 million metric tons (mmt) is projected for “new crop” MY 2017/18, down
2.9% from the record of 1,074.8 mmt in “old crop” MY 2016/17, but still up 7.3% from 973.5 mmt in MY
2015/16. World corn total supplies of 1,272.1 mmt are down marginally from the record high 1,290.5 mmt in
“old crop” MY 2016/17, but up from 1,183.2 mmt in MY 2015/16.
World corn exports of a 151.6 mmt are projected for “new crop” MY 2017/18, down 7.6% from the record
high of 164.1 mmt in “old crop” MY 2016/17, and up 26.7% from 119.7 mmt in MY 2015/16. Projected World
corn ending stocks of 204.1 mmt (19.1% S/U) in “new crop” MY 2017/18 are down from the record high 227.3
mmt (21.4% S/U) in “old crop” MY 2016/17, and from 214.9 mmt (22.2% S/U) in MY 2015/16. Projected
Foreign (Non‐U.S.) corn ending stocks of 142.2 mmt (16.5% S/U) in “new crop” MY 2017/18 are down from
169.0 mmt (19.8% S/U) in “old crop” MY 2016/17, and from 170.8 mmt (23.1% S/U) in MY 2015/16.
An alternative view of the World corn supply‐demand is presented if Chinese corn usage and ending stocks
are isolated from the World market. “World‐Less‐China” corn ending stocks are projected to be 124.5 mmt
(15.0% S/U) in “new crop” MY 2017/18, down from 126.6 mmt (15.2% S/U) in “old crop” MY 2016/17, but up
from 104.1 mmt (13.9% S/U) in MY 2015/16. These figures show that World stocks‐to‐use of corn less China’s
direct influence are projected to be approximately 21% lower (i.e., 15.0% S/U for the “World‐Less‐China”
versus 19.1% S/U for the “World” overall in “new crop” MY 2017/18).
At the same time, these figures also show that Chinese ending stocks of corn as proportion of the World
total are declining – down from 51.5% in MY 2015/16, to 44.3% in “old crop” MY 2016/17, and down to 39.0%
in “new crop” MY 2017/18. The deliberate actions in recent years ‐ taken by the Chinese government to
reduce feedgrain stockpiles – is impacting the relative amount of World total corn stocks they hold. These
actions may increase Chinese import demand for both U.S. corn and grain sorghum.
…
March 15, 2018
Grain Market Outlook
tighter foreign stocks and percent (%) stocks‐to‐use for corn, and c) the eventual “using up” of competing
South American corn exports in spring 2018.
Current forecasts are for 2018 Brazilian corn production to be 94.5 million metric tons (mmt) in this
marketing year – versus 98.5 mmt last year ‐ with harvests lasting from February through May. However,
forecasts are for 2018 Argentina corn production to be 36.0 mmt in this marketing year – versus 41.0 mmt a
year ago ‐ with harvests lasting from March through May. The Argentina production figure is at risk to falling
further. To the degree that 2018 corn production in Argentina and southern Brazil is limited by crop weather
issues, there will likely be subsequent support U.S. corn export prospects.
Fourth, a continuing threat exists of U.S. and Foreign economic and/or financial system disruptions that
could impact grain, energy, and other commodity markets in 2018. World geo‐political events could provide
“shocks” to U.S. and World energy and grain markets which could in turn impact grain prices in either direction
depending on the circumstances, the countries involved, and their role in global corn export trade.
4. USDA Supply‐Demand & Price Forecasts
In the March 8th WASDE report, the USDA left unchanged its projections of a) 2017 U.S. corn production of
14.604 bb – down from the record high of 15.148 bb in 2016, and b) “old crop” MY 2017/18 total supplies of
16.947 bb – up marginally from a year earlier. Total use is forecast at 14.820 bb – raised 225 mb from the
February WASDE on prospects for a) higher ethanol use of 5.575 bb (raised 50 mb), and b) higher exports of
2.225 bb (raised 175 mb). Ending stocks are projected to be a 2.127 bb (14.35% Stocks/Use) – down 225 mb
from February, and down from 2.293 bb (15.65% S/U) in MY 2016/17. United States’ corn prices are projected
to average $3.35 /bu (range of $3.15‐$3.55). This is down $0.01 /bu from $3.36 /bu from MY 2016/17.
At the Agricultural Outlook Forum in Arlington, Virginia on February 23, 2018, the USDA forecast that a)
2018 U.S. corn production would be 14.390 bb – based on 90.0 million acres (ma) planted, 82.7 ma harvested,
and a yield of 174.0 bu. Total use is forecast at 14.520 bb – with projections of ethanol use at 5.650 bb (a
record high), non‐ethanol food seed and industrial use at 1.495 bb (also a record high), exports of 1.900 bb
(down 325 mb from the current marketing year), and feed and residual use of 5.475 mb (down 75 mb from this
year). After a KSU‐adjustment for lower beginning stocks based on the March 8th WASDE report, ending stocks
are projected to be a 2.047 bb (14.10% Stocks/Use) – with both being down moderately from “old crop” MY
2017/18 levels. United States’ corn prices are projected to average a KSU‐adjusted $3.45 /bu (up $0.05‐$0.10
Page | 3
from this year). It is probable that the export projection for “new crop” MY 2018/19 may be raised in coming
months due to South American production problems – causing these ending stocks and % stocks‐to‐use
estimates to tighten further. This scenario is given a 50% likelihood of occurring by KSU Extension
Agricultural Economist D. O’Brien.
5. Alternative KSU Supply‐Demand & Price Forecast for “New Crop” MY 2018/19
Two alternative KSU‐Scenarios for U.S. corn supply‐demand and prices are presented for “new crop” MY
2018/19. These projections are to show how varying 2018 U.S. corn production outcomes could affect U.S.
corn supply‐demand and price outcomes in “new crop” MY 2018/19.
A ‐ KSU “Higher 2018 U.S. Corn Production” Scenario for “new crop” MY 2018/19: (25% probability):
Assumptions are as follows: 90.000 ma planted, 82.700 ma harvested, 176.6 bu/ac record yield (equal to
2017 record high), 14.605 bb production, 16.782 bb total supplies, 14.600 bb total use, 2.182 bb ending
stocks, 14.95% S/U, & $3.30 /bu U.S. corn average price;
B ‐ KSU “Lower 2018 U.S. Corn Production” Scenario for “new crop” MY 2018/19: (25% probability):
Assumptions are as follows: 90.000 ma planted, 82.700 ma harvested, 164.4 bu/ac yield (equal to 2009
yield), 13.596 bb production, 15.773 bb total supplies, 14.315 bb total use, 1.458 bb ending stocks, 10.19%
S/U, & $4.20 /bu U.S. corn average price;
6. World Corn Supply‐Demand – With & Without China
World corn production of 1,041.7 million metric tons (mmt) is projected for “old crop” MY 2017/18, down
3.1% from the record of 1,075.2 mmt in MY 2016/17, but still up 7.0% from 973.45 mmt in MY 2015/16. World
corn total supplies of 1,273.6 mmt in “old crop” MY 2017/18 are forecast to be down moderately from the
record high 1,290.2 mmt in MY 2016/17, but up from 1,183.2 mmt in MY 2015/16.
World corn exports of a 155.9 mmt are projected for “old crop” MY 2017/18, down 2.4% from the record
high of 159.8 mmt in MY 2016/17, and up 30.2% from 119.7 mmt in MY 2015/16. Projected World corn ending
stocks of 199.2 mmt (18.5% S/U) in “old crop” MY 2017/18 are down from the record high 231.9 mmt (21.9%
S/U) in MY 2016/17, and from 215.0 mmt (22.2% S/U) in MY 2015/16. Projected Foreign (Non‐U.S.) corn
ending stocks of 145.1 mmt (17.0% S/U) in “old crop” MY 2017/18 are down from 173.6 mmt (21.9% S/U) in
MY 2016/17, and from 170.9 mmt (23.1% S/U) in MY 2015/16.
An alternative view of the World corn supply‐demand is presented if Chinese corn usage and ending stocks
are isolated from the World market. “World‐Less‐China” corn ending stocks are projected to be 119.6 mmt
(14.35% S/U) in “old crop” MY 2017/18, down from 131.1 mmt (15.9% S/U) in MY 2016/17, but up from 104.2
mmt (13.9% S/U) in MY 2015/16. These figures show that World stocks‐to‐use of corn less China’s direct
influence are projected to be approximately 22% lower (i.e., 14.35% S/U for the “World‐Less‐China” versus
18.5% S/U for the “World” overall in “old crop” MY 2017/18).
At the same time, these figures also show that Chinese ending stocks of corn as proportion of the World
total are declining – down from 51.5% in MY 2015/16, to 43.4% in MY 2016/17, and down to 39.9% in “old
crop” MY 2017/18. The deliberate actions in recent years ‐ taken by the Chinese government to reduce
feedgrain stockpiles – is impacting the relative amount of World total corn stocks they hold. These actions
may eventual increase Chinese import demand for U.S. corn and grain sorghum.
…