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June 2, 2016
Grain Market Outlook
tion problems in major world wheat
production areas such the Black Sea Region, China, parts of Europe, and elsewhere, b) ongoing geopolitical
conflicts and tensions in the Middle East and the Black Sea region that could impact commodity markets, and
c) spillover impacts into grain markets and other commodities from volatile World economies, and financial
and currency markets. Even so, the “large crop‐over supply” situation that exists in World and U.S. wheat
markets continues to have a strong prevailing negative influence on World wheat prices.
It is likely that significant World wheat production problems and/or trade disruptions would need to occur in
coming weeks and months in order to have wheat prices recover significantly in spring‐summer 2016. Ongoing
strength in the U.S. dollar exchange rate – although it has been weakening recently – also is a serious negative
factor that is limiting U.S. wheat exports, raising U.S. wheat ending stocks and % ending stocks‐to‐use, and
causing sharply lower U.S. wheat prices.
USDA U.S. Wheat S/D Forecast for “Old Crop” MY 2015/16: The USDA made minor changes in its supply‐
demand and price projections for U.S. wheat in the “old crop” 2015/16 marketing year – with 2.052 billion
bushels (bb) production, 2.924 bb total supplies, 960 mb million bushels (mb) of food use (down 7 mb), 780
mb of exports (up 5 mb), 140 mb wheat feed use, 1.946 bb of total use (down 2 mb), 978 mb ending stocks (up
2 mb), and 50.24% ending‐stocks‐to‐use (up from 50.09% in April to the highest level since 48.6% in MY
2009/10). The USDA forecast of “old crop” MY 2015/16 U.S. average wheat prices to be $4.90 /bu – the lowest
U.S. wheat marketing year average price since $4.87 /bu in MY 2009/10.
USDA U.S. Wheat S/D Forecast for “New Crop” MY 2016/17: Based on the May 10th WASDE and the March
31st Prospective Plantings report, the USDA projected 2016 U.S. wheat plantings of 49.559 million acres (ma) –
down 5.085 ma from 2015. Forecast 2016 harvested acres of 42.783 ma would be down 4.310 ma vs 2015.
Based on projected 2016 U.S. wheat yields of 46.7 bu/ac (up from 43.6 bu/ac in 2015), 2016 U.S. wheat
production is projected to be 1.998 bb (vs 2.052 bb in 2015), with “new crop” MY 2016/17 total supplies of
3.106 bb (up from 2.924 bb in “old crop” MY 2015/16), and projected “new crop” MY 2016/17 total use of
2.077 bb (up from 1.946 bb in “old crop” MY 2015/16). Given these numbers, the USDA projected “new crop”
MY 2016/17 ending stocks of 1.029 bb (vs 978 mb a year ago), with percent ending stocks‐to‐use of 49.52%
S/U (vs 50.24% last year). U.S. wheat average prices are projected to be in the range of $3.70 to $4.50
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(midpoint = $4.10 /bu) – down from $4.90 /bu in “old crop” MY 2015/16. It is assumed by KSU that these
adjusted USDA projections for “New crop” MY 2016/17 is assumed to have a 45% probability of occurring.
KSU Forecasts for “New Crop” MY 2016/17: Three alternative KSU‐Scenarios for U.S. wheat supply‐demand
and prices are presented for “new crop” MY 2016/17, with each assuming the same 2016 planted acreage as
USDA, but 1.027 million less acres harvested than the adjusted USDA estimates based on historical percent
harvested‐to‐planted acres relationships. These KSU projections also assume at least a moderation in the high
value of the U.S. dollar, and some improvement in U.S. wheat exports as a result. A) KSU‐Scenario A (Trend
Yield) (35% probability) assumes for “new crop” MY 2016/17: 49.559 ma planted, 41.737 ma harvested, 46.0
bu/ac yield, 1.920 bb production, 3.028 bb total supplies, 850 mb exports, 2.031 bb total use, 997 mb ending
stocks, 49.09% S/U, & $4.40 /bu U.S. wheat average price; B) KSU‐Scenario B (Foreign Crop Problems –
Higher U.S. Exports) (10% prob.) assumes for “new crop” MY 2016/17: 49.559 ma planted, 41.737 ma
harvested, 46.0 bu/ac yield, 1.920 bb production, 3.028 bb total supplies, 1.100 bb exports, 2.272 bb total use,
756 mb ending stocks, 33.27% S/U, & $5.55 /bu U.S. wheat average price; and C) KSU‐Scenario C (Widespread
2016‐2017 U.S. Crop Problems) (10% prob.) assumes for “new crop” MY 2016/17: 49.559 ma planted, 41.737
ma harvested, 43.0 bu/ac yield, 1.753 bb production, 2.861 bb total supplies, 900 mb exports, 2.081 bb total
use, 780 mb ending stocks, 37.48% S/U, & $5.30 /bu U.S. wheat average price.
…
December 22, 2015
Grain Market Outlook
U.S. 2015/16
Page | 4
in August, 94.4% ($4.72) on September, 97.4% ($4.87) in October, 87.4% ($4.37 estimate) in November, and a
preliminary estimated low of 87.2% ($4.36) in December 2015.
United States’ wheat prices are moving in an unusual price pattern in “new crop” MY 2015/16 – declining
during the November‐December post‐harvest period rather than following a more normal seasonal sideways‐
to‐upward trend. Weakness in U.S. wheat exports caused by a combination of a) large World wheat supply‐
demand balances, and b) the high value of the U.S. dollar relative to other major currencies, is the primary
cause of this downward price trend in fall‐early winter 2016.
I‐D. U.S. Trade Weighted Dollar Index
The Trade Weighted U.S. Dollar Index has been generally trending higher from mid‐July 2011 through
early December 2015 (Figure 3). After an index value of 75.69 on July 1, 2014 the calculated U.S. trade
weighted dollar index trended up to a high of 93.37 on Friday, February 13, 2015 – an increase of 23.4%. After
moving lower for a period of time, the index rose again to an even higher high of 95.21 on December 17, 2015.
The latest recorded value of the Trade Weighted U.S. Dollar Index was 94.62 on Friday, December 18, 2015.
Figure 3. Daily U.S. Trade Weighted Dollar Index – Major Currencies (DTWEXM) …
April 10, 2023
Ag Law Issues
a spouse’s debts, among other issues. That
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diesel, propane, fertilizer and other ag production inputs. The … absorption bands of water – in other words water
completely masks … with various cancers and other health problems, and there …
December 3, 2015
Grain Market Outlook
This trend in the value of the U.S. trade weighted dollar index is especially significant to the U.S. wheat
market. A higher U.S. dollar exchange rate relative to other major currencies generally makes it more
expensive for foreign buyers of U.S. wheat to exchange their country’s currencies for U.S. dollars – which they
would then in turn use to purchase U.S. wheat exports (i.e., which are denominated or “priced” in U.S. dollars).
Although this is not the only factor negatively impacting U.S. wheat exports, it is a very important one which
currently works against U.S. wheat being an affordable, competitive export seller in World wheat trade. …
April 29, 2016
Grain Market Outlook
Asia/India, China, South America, and
Australia, and the central and southern plains of the United States (possible wheat disease problems from
seasonal rains), b) ongoing geopolitical conflicts and tensions in the Middle East and the Black Sea region that
could impact commodity markets, and c) spillover impacts into grain markets and other commodities from
volatile World economies, and financial and currency markets. Even so, the “large crop‐over supply” situation
that exists in World and U.S. wheat markets continues to have a strong prevailing negative influence on World
wheat prices.
It is likely that significant World wheat production problems and/or trade disruptions would need to occur in
coming weeks and months in order to have wheat prices recover significantly before summer‐2016. Ongoing
strength in the U.S. dollar exchange rate – although it has been weakening recently – alos is a serious negative
factor that is limiting U.S. wheat exports, raising U.S. wheat ending stocks and % ending stocks‐to‐use, and
causing sharply lower U.S. wheat prices.
USDA U.S. Wheat Forecast for “Current Crop” MY 2015/16: The USDA made minor changes in its supply‐
demand and price projections for U.S. wheat in the “current crop” 2015/16 marketing year – with 2.052 billion
bushels (bb) production, 2.924 bb total supplies, 775 million bushels (mb) of exports, 140 mb wheat feed use
(down 10 mb), 1.948 bb of total use (down 10 mb), 976 mb ending stocks (up 10 mb), and 50.09% ending‐
stocks‐to‐use (up from 49.34% in March to the highest level since 48.6% in MY 2009/10). A price range of
$4.90‐$5.00 /bu was forecast by the USDA with a midpoint of $4.95 /bu – the lowest U.S. wheat marketing
year average price since $4.87 /bu in MY 2009/10.
USDA U.S. Wheat Forecast for “Next Crop” MY 2016/17: Based on March 31st USDA Prospective Plantings
Report forecasts and information from the USDA Agricultural Outlook Forum in Arlington, VA on February 25‐
26, 2016, a KSU‐adjusted USDA forecast of U.S. wheat supply‐demand is available for “next crop” 2016/17
marketing year beginning June 1, 2016. The USDA projected 2016 U.S. wheat plantings of 49.559 million acres
(ma) – down 5.085 ma from 2015. Forecast 2016 harvested acres of 42.174 ma would be down 4.920 ma vs
Page | 2
2015. Based on projected 2016 U.S. wheat yields of 45.9 bu/ac (up from 43.6 bu/ac in 2015), 2016 U.S. wheat
production is projected to be 1.935 bb (vs 2.052 bb in 2015), with “next crop” MY 2016/17 total supplies of
3.036 bb (up from 2.924 bb in “current crop” MY 2015/16). With projected “next crop” MY 2016/17 ending
stocks of 943 mb and percent ending stocks‐to‐use of 45.05% S/U, U.S. wheat average prices are projected to
be $4.20 /bu – down from $4.95 /bu in “current crop” MY 2015/16. It is assumed by KSU that these adjusted
USDA projections for “next crop” MY 2016/17 is assumed to have a 40% probability of occurring.
KSU Forecast for “Next Crop” MY 2016/17: Three alternative KSU‐Scenarios for U.S. wheat supply‐demand
and prices are presented for “next crop” MY 2016/17, with each assuming the same 2016 planted acreage as
USDA, but 437,000 less acres harvested than the adjusted USDA estimates based on historical percent
harvested‐to‐planted acres relationships. A) KSU‐Scenario A (Trend Yield) (30% probability) assumes for “next
crop” MY 2016/17: 49.559 ma planted, 41.737 ma harvested, 46.0 bu/ac yield, 1.920 bb production, 3.021 bb
total supplies, 850 mb exports, 2.043 bb total use, 978 mb ending stocks, 47.87% S/U, & $4.05 /bu U.S. wheat
average price; B) KSU‐Scenario B (Foreign Crop Problems – Higher U.S. Exports) (15% prob.) assumes for
“next crop” MY 2016/17: 49.559 ma planted, 41.737 ma harvested, 46.0 bu/ac yield, 1.920 bb production,
3.021 bb total supplies, 1.050 bb exports, 2.243 bb total use, 778 mb ending stocks, 34.7% S/U, & $5.10 /bu
U.S. wheat average price; and C) KSU‐Scenario C (Widespread U.S. Crop Problems) (15% prob.) assumes for
“next crop” MY 2016/17: 49.559 ma planted, 41.737 ma harvested, 40.0 bu/ac yield, 1.669 bb production,
2.770 bb total supplies, 850 mb exports, 2.043 bb total use, 727 mb ending stocks, 35.6% S/U, & $5.00 /bu U.S.
wheat average price.
…
March 17, 2016
Grain Market Outlook
e
Middle East, the Former Soviet Union/Black Sea region, south Asia/India, and Australia, and the central and
southern plains of the United States, b) ongoing geopolitical conflicts and tensions in the Middle East and the
Black Sea region that could impact commodity markets, and c) spillover impacts into grain markets and other
commodities from volatile World economies, and financial and currency markets. Even so, the “large crop‐
over supply” situation currently existing in World and U.S. wheat markets continues to have a strong prevailing
negative influence on World wheat prices.
It is likely that significant World wheat production problems and/or trade disruptions would need to occur in
coming weeks and months in order to have wheat prices recover significantly before summer‐2016. Ongoing
strength in the U.S. dollar exchange rate also is a serious negative factor that is limiting U.S. wheat exports,
raising U.S. wheat ending stocks and % ending stocks‐to‐use, and causing sharply lower U.S. wheat prices.
USDA U.S. Wheat Forecast for “Current Crop” MY 2015/16: The USDA left unchanged its supply‐demand and
price projections for U.S. wheat in the “current crop” 2015/16 marketing year – with 2.052 billion bushels (bb)
production, 2.924 bb total supplies, 775 million bushels (mb) of exports, 1.958 bb of total use, 966 mb ending
stocks, and 49.34% ending‐stocks‐to‐use (up from 47.45% in January to the highest level since 48.6% in MY
2009/10). A price range of $4.90‐$5.10 /bu was forecast by the USDA with a midpoint of $5.00 /bu – the
lowest U.S. wheat marketing year average price since $4.87 /bu in MY 2009/10.
USDA U.S. Wheat Forecast for “Next Crop” MY 2016/17: At the Agricultural Outlook Forum in Arlington, VA
on February 25‐26, 2016, the USDA provided a forecast of U.S. wheat supply‐demand for “next crop” 2016/17
marketing year beginning June 1, 2016. The USDA projected 2016 U.S. wheat plantings of 51.0 million acres
(ma) – down 3.644 ma from 2015. Forecast 2016 harvested acres of 43.4 ma would be down 3.694 ma vs
2015. Based on projected 2016 U.S. wheat yields of 45.9 bu/ac (up from 43.6 bu/ac in 2015), 2016 U.S. wheat
production is projected to be 1.991 bb (vs 2.052 bb in 2015), with “next crop” MY 2016/17 total supplies of
3.082 bb (up from 2.924 bb in “current crop” MY 2015/16). With projected “next crop” MY 2016/17 ending
Page | 2
stocks of 989 mb and percent ending stocks‐to‐use of 47.25% S/U, U.S. wheat average prices are projected to
be $4.20 /bu – down from $5.00 /bu in “current crop” MY 2015/16.
KSU U.S. Wheat Forecast for “Next Crop” MY 2016/17: Compared to the USDA forecast, Kansas State
University (KSU) forecasts for “next crop” MY 2016/17 are a combination of lower 2016 wheat planted and
harvested acres, marginally higher harvested acres, trendline yields, higher production and total supplies,
uncertain exports, lower feed use, higher ending stocks, higher percent ending stocks‐to‐use, along with
marginally higher prices. The KSU forecast is based on 2016 U.S. wheat plantings of 50.695 ma – down 3.949
ma from 2015 and less than 51.000 ma forecast by the USDA. Forecast 2016 harvested acres of 43.690 ma
would be down 3.404 ma vs 2015, and up from the 43.400 ma USDA forecast. With projected trendline yields
of 46.0 bu/ac (nearly equal to the USDA), 2016 U.S. wheat production is projected to be 2.010 bb (down from
2.052 bb in 2015 and up from 1.991 bb projected by the USDA), with MY 2016/17 total supplies equaling 3.101
bb (up from 2.924 bb in “current crop” MY 2015/16 and up 81 mb from USDA’s projection for MY 2016/17).
With forecasts of exports at 850 mb (equal to USDA but still up from 775 mb in “current crop” MY 2015/16)
and feed and residual use of 175 mb (down 25 mb from USDA’s forecast, but up from 150 mb in “current crop”
MY 2015/16), “next crop” MY 2016/17 total use of 2.068 bb is forecast, along with projected ending stocks of
1.033 bb, with ending stocks‐to‐use of 49.95%. Based on historic price relationships and the downward price
adjustment that has occurred in recent months, U.S. wheat prices are projected to be $4.25 /bu – up $0.05
from the USDA’s projection of $4.20 /bu in “next crop” MY 2016/17, and down from $5.00 /bu in “current
crop” MY 2015/16, $5.99 in MY 2014/15, $6.87 in MY 2013/14, and the record $7.77 in MY 2012/13.
…
October 20, 2016
Grain Market Outlook
e projected for “current” MY 2016/17. The “large crop‐over supply‐low price” situation that now
exists in World and U.S. wheat markets continues to have a strong prevailing negative influence on World
wheat prices.
However, the broader large crop‐over supply‐low price” situation in the World wheat market may be
“masking” or “obscuring” at least a couple of other important market issues. …