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March 20, 2015
Grain Market Outlook
rts as a proportion of World
soybean trade in “current year” MY 2014/15 has been offset by increases in United States’ exports.
Uptrends in United States’ Soybean Production & Exports
The growth in United States’ soybean production and exports compares to that in South America over this
same three period, with 82.8 mmt of U.S. soybean production in MY 2012/13 (30.8% of World total), 91.4 mmt
in MY 2013/14 (32.2% of World total), and 108.0 mmt in “current crop” MY 2014/15 (34.3% of the World
total). United States’ soybean production in “current crop” MY 2014/15 is projected to be up 18.2% over last
year, and up 30.5% over two years ago.
United States’ soybean exports have grown from 35.9 mmt in MY 2012/13 (35.7% of World total), to 44.8
mmt in MY 2013/14 (39.6% of World total), and a projected amount of 48.7 mmt in “current crop” MY
2014/15 (41.5% of the World total). United States’ soybean exports in “current crop” MY 2014/15 are
projected to be up 8.7% over last year, and up 35.9% over two years ago.
The Necessity to the Soybean Market of Continued Strength in Chinese Import Demand
It is widely acknowledged by soybean market analysts that continued growth and/or at least “level
sustainability” of Chinese soybean imports at current and projected levels is necessary for continuance of the
historically high World soybean market prices that have occurred since the 2012/13 marketing year. Market
analysts have speculated that Chinese soybean import demand growth may eventually slow due to swine
industry production issues or other broad, systematic economic and/or financial factors within the country.
However, the USDA has continued to project that strong growth would occur in Chinese soybean imports in
“current crop” MY 2014/15 and “next crop” MY 2015/16, and beyond. If this recent upward trend in Chinese
soybean imports and import demand were to falter, it would undoubtably have a substantial negative impact
on U.S. and World soybean market prices.
As a result of a record large fall harvest of soybeans in the United States in 2014, cash soybean prices had
fallen below $9.00 per bushel in late November, but have since moved higher. Central Kansas Terminal cash
bids were in the range of $9.00 ¾ ($0.61 under basis) to $9.31 ¾ ($0.30 under basis) on Thursday, March 19th.
Soybean forward contract prices for fall harvest in October 2015 in the key central Kansas market of
Hutchinson, Kansas were in the range of $8.62 / bu. ($0.86 under basis) to $8.96 ($0.50 under basis). “Current
crop” MAY 2015 soybean futures closed at $9.62 ½ per bushel that day, with “next year’s crop” NOVEMBER
2015 soybean futures closing at $9.47 ¾ per bushel.
Given that the USDA projections for “current crop” MY 2014/15 and “next crop” MY 2015/16 indicate that
a) Chinese soybean imports will continue to be strong, and b) South American soybean production to be
harvested in early‐mid 2015 will again be record high, there is no indication yet that any change is expected in
these projected trends in production, exports or imports in the broader World soybean market. The
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possibility of weather‐related soybean production problems in South America during the spring of 2015, or in
the United States during the summer‐fall of 2015 could impact these trends. However, until such potential
production problems actually do occur the World soybean market will likely assume that these “predominant
trends” will continue into the foreseeable future.
I‐C. Soybean Futures Trends Since the March 10th USDA Reports
“Current crop” MAY 2015 soybean futures contract prices responded in a negative manner to the
information in the March 10th USDA reports (Figure 1). On the day of the reports CME MARCH 2015 futures
prices opened at $9.92 ½ /bu, and traded as high as $9.94 and as low as $9.81 ¾ during the session, before
settling at $9.84 ½ – down $0.08 ¾ for the day. Since then MAY 2015 soybean futures prices have traded
within the range from a high of $9.97 ½ on March 11th and 12th, to a low of $9.53 ½ on March 17th and 18th,
before closing at $9.73 ¾ on Thursday, March 20th.
Figure 1. MAY 2015 and NOV 2015 CME Soybean Futures Price Charts (electronic trade) …
August 31, 2016
Grain Market Outlook
in storage after fall harvest, 2) anticipation of continued strong use of 2015‐2016 crop U.S.
corn in domestic U.S. ethanol production and livestock feeding, 3) at least moderate strength in U.S. corn
exports – driven largely by a poor harvest and lack of exportable supplies in Brazil, and 4) the possibility of
broader U.S. and Foreign economic and financial system disruptions impacting grain, energy, and other
commodity markets – such as unanticipated U.S. financial policy announcements by the U.S. Federal Reserve
affecting U.S. interest rates, or geo‐political events that could “shock” World energy markets.
USDA Supply‐Demand Forecast for “New Crop” MY 2016/17: With USDA projections of 2016 U.S. corn
plantings of 94.148 ma (up 6.149 ma from 2015), harvested acres of 86.550 ma (up 5.801 ma from 2015),
record high projected yields of 175.1 bu/ac (vs 168.4 bu/ac in 2015 and the current record high of 171.0 bu/ac
in 2014), 2016 U.S. corn production is forecast to be a record high 15.153 bb – up from 13.601 bb in 2015, the
current record of 14.216 bb in 2014, and 13.829 bb in 2013.
With forecast “new crop” MY 2016/17 total supplies of 16.909 bb (record high), total use of 14.500 bb (record
high), and projected ending stocks of 2.409 bb (16.61% S/U) – up from 1.706 bb (12.46% S/U) in “old crop” MY
2015/16 and the highest since 4.259 bb (54.90% S/U) in MY 2004/05 – U.S. corn prices are projected by the
USDA to be in the range of $2.85‐$3.45 (midpoint = $3.15 /bu) – being down from the $3.60 /bu midpoint
estimate for “current” MY 2015/16. This scenario is given a 20% likelihood of occurring by KSU.
KSU Forecasts for “New Crop” MY 2016/17: Three alternative KSU‐Scenarios for U.S. corn supply‐demand and
prices are presented for “new crop” MY 2016/17, with each assuming a lower U.S. corn yields and production
than the August 12th USDA WASDE report.
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KSU Scenario A) “Minor Crop Problems – 14.9 bb” Scenario (35% probability) assumes: 94.148 ma planted,
86.550 ma harvested, 172.0 bu/ac yield, 14.887 bb production, 16.743 bb total supplies, 14.450 bb total use,
2.293 bb ending stocks, 15.87% S/U, & $3.25 /bu U.S. corn average price for “new crop” MY 2016/17;
KSU Scenario B) “Moderate Crop Problems – 14.5 bb” Scenario (35% probability) assumes: 94.148 ma
planted, 86.550 ma harvested, 168.0 bu/ac yield, 14.540 bb production, 16.396 bb total supplies, 14.344 bb
total use, 2.052 bb ending stocks, 14.31% S/U, & $3.45 /bu U.S. corn average price for “new crop” MY
2016/17;
KSU Scenario C) “More Serious Crop Problems – 14.2 bb” Scenario (10% probability) assumes: 94.148 ma
planted, 86.550 ma harvested, 164.0 bu/ac yield, 14.194 bb production, 16.137 bb total supplies, 14.239 bb
total use, 1.898 bb ending stocks, 13.33% S/U, & $3.60 /bu U.S. corn average price for “new crop” MY
2016/17;
World Corn Supply‐Demand: World corn production of 1,028.4 million metric tons (mmt) is projected for “new
crop” MY 2016/17, up from 959.7 mmt in “old crop” MY 2015/16, and up from 1,013.6 mmt in MY 2014/15.
World corn total supplies of 1,237.7 mmt are projected for “new crop” MY 2016/17, up from 1,170.0 mmt in
“old crop” MY 2015/16, and up from 1,188.9 mmt in MY 2014/15. World corn exports of 137.25 mmt are
projected for “new crop” MY 2016/17, up from 119.7 mmt in “old crop” MY 2015/16, but down from 141.7
mmt in MY 2014/15. Projected World corn ending stocks of 220.8 mmt (21.7% S/U) in “new crop” MY 2016/17
are up from 209.3 mmt (21.9% S/U) in “old crop” MY 2015/16, and from 208.3 mmt (21.2% S/U) in MY
2014/15.
Brazilian corn production in MY 2015/16 (produced in early‐mid 2016) is estimated to be 68.5 mmt, down 16.5
mmt (down 19.5%) from MY 2014/15. This shortfall in Brazilian corn production in 2016 has provided some
support for U.S. corn exports and even ethanol production (via exports). But expectations of a record large
2016 U.S. corn crop have had a predominant negative impact on U.S. corn prices. Brazilian corn production is
forecast by the USDA to rebound back to 80 mmt in MY 2016/17 (2017 production).
…
September 22, 2016
Grain Market Outlook
est, 2) anticipation of continued strong use of carryover 2015 and new 2016
crop U.S. corn in domestic U.S. ethanol production and livestock feeding, 3) at least moderate strength in U.S.
corn exports – driven largely by a poor harvest and lack of exportable supplies in Brazil in 2016, and 4) the
possibility of broader U.S. and Foreign economic and/or financial system disruptions impacting grain, energy,
and other commodity markets. For example, unanticipated U.S. financial policy announcements by the U.S.
Federal Reserve could affect U.S. interest rates, or geo‐political events could occur that would “shock” World
energy and grain markets.
USDA Supply‐Demand Forecast for “New Crop” MY 2016/17: With USDA projections of 2016 U.S. corn
plantings of 94.148 ma (up 6.149 ma from 2015), harvested acres of 86.550 ma (up 5.801 ma from 2015),
record high projected yields of 174.4 bu/ac (vs 168.4 bu/ac in 2015 and the current record high of 171.0 bu/ac
in 2014), 2016 U.S. corn production is forecast to be a record high 15.093 bb – up from 13.601 bb in 2015, the
current record of 14.216 bb in 2014, and 13.829 bb in 2013.
With forecast “new crop” MY 2016/17 total supplies of 16.859 bb (record high), total use of 14.475 bb (record
high), and projected ending stocks of 2.384 bb (16.47% S/U) – up from 1.716 bb (12.54% S/U) in “old crop” MY
2015/16 and the highest since 4.259 bb (54.90% S/U) in MY 2004/05 – U.S. corn prices are projected by the
USDA to be in the range of $2.90‐$3.50 (midpoint = $3.20 /bu) – being down from $3.60 /bu for “old crop” MY
2015/16. This scenario is given a 50% likelihood of occurring by KSU Extension Ag Economist D. O’Brien.
KSU Forecasts for “New Crop” MY 2016/17: Three alternative KSU‐Scenarios for U.S. corn supply‐demand and
prices are presented for “new crop” MY 2016/17, with each assuming a lower U.S. corn yields and production
than the September 12th USDA WASDE report.
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KSU Scenario A) “Minor Crop Problems – 14.9 bb” Scenario (30% probability) assumes: 94.148 ma planted,
86.550 ma harvested, 172.0 bu/ac yield, 14.887 bb production, 16.653 bb total supplies, 14.450 bb total use,
2.203 bb ending stocks, 15.25% S/U, & $3.35 /bu U.S. corn average price for “new crop” MY 2016/17;
KSU Scenario B) “Moderate Crop Problems – 14.5 bb” Scenario (35% probability) assumes: 94.148 ma
planted, 86.550 ma harvested, 168.0 bu/ac yield, 14.540 bb production, 16.306 bb total supplies, 14.344 bb
total use, 1.962 bb ending stocks, 13.68% S/U, & $3.50 /bu U.S. corn avg. price for “new crop” MY 2016/17;
KSU Scenario C) “More Serious Crop Problems – 14.2 bb” Scenario (10% probability) assumes: 94.148 ma
planted, 86.550 ma harvested, 164.0 bu/ac yield, 14.194 bb production, 15.190 bb total supplies, 14.239 bb
total use, 1.721 bb ending stocks, 12.09% S/U, & $3.80 /bu U.S. corn avg. price for “new crop” MY 2016/17;
World Corn Supply‐Demand: World corn production of 1,026.6 million metric tons (mmt) is projected for “new
crop” MY 2016/17, up from 959.0 mmt in “old crop” MY 2015/16, and up from 1,013.6 mmt in MY 2014/15.
World corn total supplies of 1,235.9 mmt are projected for “new crop” MY 2016/17, up from 1,167.3 mmt in
“old crop” MY 2015/16, and up from 1,188.9 mmt in MY 2014/15. World corn exports of 139.8 mmt are
projected for “new crop” MY 2016/17, up from 119.2 mmt in “old crop” MY 2015/16, but down from 141.7
mmt in MY 2014/15. Projected World corn ending stocks of 219.5 mmt (21.6% S/U) in “new crop” MY 2016/17
are up from 209.25 mmt (21.8% S/U) in “old crop” MY 2015/16, and from 208.3 mmt (21.2% S/U) in MY
2014/15.
Brazil corn production in “old crop” MY 2015/16 (1st crop harvested in January‐May 2016, 2nd crop harvested
in May‐August) is estimated to be 67.0 mmt, down 18.0 mmt (down 21.2%) from 85.0 mmt in MY 2014/15.
This shortfall in Brazilian corn production in 2016 has provided some support for U.S. corn exports and even
ethanol production (via exports). But expectations of a record large 2016 U.S. corn crop have had a
predominant negative impact on U.S. corn market prices to date. Brazilian corn production is forecast by the
USDA to rebound back to 82.5 mmt in MY 2016/17 (2017 production).
China corn production in “new crop” MY 2016/17 (harvested in September‐October 2016) is estimated to be
216.0 mmt, down 8.6 mmt (down 3.8%) from 224.6 mmt in MY 2015/16, but marginally higher than 215.65
mmt in MY 2014/15. Most of the focus in World corn markets is on Chinese ending stocks. Ending stocks of
corn in China are projected to be 103.65 mmt (45.9% SU) in “new crop” MY 2016/17, down from 110.7 mmt
(50.9% S/U) in “old crop” MY 2015/16, but up from 110.5 mmt (49.7% S/U) in MY 2014/15.
…
October 19, 2016
Grain Market Outlook
ipation of continued strong use of “new crop” 2016 U.S. corn in
domestic U.S. ethanol production and livestock feeding, 3) at least moderate strength in U.S. corn exports –
driven partly by a poor harvest and lack of exportable supplies in Brazil in 2016 as well as other World corn
market factors, and 4) the always present possibility of broader U.S. and Foreign economic and/or financial
system disruptions impacting grain, energy, and other commodity markets in later 2016 and 2017.
For example, unanticipated U.S. financial policy announcements by the U.S. Federal Reserve could affect U.S.
interest rates which could affect U.S. corn exports. Also, 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 “New Crop” MY 2016/17: With USDA projections of 2016 U.S. corn
plantings of 94.490 ma (up 6.491 ma from 2015), harvested acres of 86.836 ma (up 6.087 ma from 2015),
record high projected yields of 173.4 bu/ac (vs 168.4 bu/ac in 2015 and the previous record high of 171.0
bu/ac in 2014), 2016 U.S. corn production is forecast to be a record high 15.057 bb – up from 13.601 bb in
2015, the current record of 14.216 bb in 2014, and 13.829 bb in 2013.
With forecast “new crop” MY 2016/17 total supplies of 16.845 bb (record high), total use of 14.525 bb (record
high), and projected ending stocks of 2.320 bb (15.97% S/U) – up from 1.738 bb (12.72% S/U) in “old crop” MY
2015/16 and the highest since 4.259 bb (54.90% S/U) in MY 2004/05 – U.S. corn prices are projected by the
USDA to be in the range of $2.95‐$3.55 (midpoint = $3.25 /bu) – being down from $3.61 /bu for “old crop” MY
2015/16. This scenario is given a 70% likelihood of occurring by KSU Extension Ag Economist D. O’Brien.
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Alternative KSU Forecasts for “New Crop” MY 2016/17: Two alternative KSU‐Scenarios for U.S. corn supply‐
demand and prices are presented for “new crop” MY 2016/17, each gauging the likelihood of lower U.S. corn
yields and production than projected by the USDA in the October 12th USDA WASDE report.
KSU Scenario A) “172.5 bu/ac – 14.979 bb” Scenario (25% probability) assumes: 94.490 ma planted, 86.836
ma harvested, 172.5 bu/ac yield, 14.979 bb production, 16.717 bb total supplies, 14.525 bb total use, 2.192 bb
ending stocks, 15.09% S/U, & $3.35 /bu U.S. corn average price for “new crop” MY 2016/17;
KSU Scenario B) “171.0 bu/ac – 14.849 bb” Scenario (5% probability) assumes: 94.490 ma planted, 86.836 ma
harvested, 171.0 bu/ac yield, 14.849 bb production, 16.637 bb total supplies, 14.525 bb total use, 2.112 bb
ending stocks, 14.54% S/U, & $3.45 /bu U.S. corn average price for “new crop” MY 2016/17;
World Corn Supply‐Demand: Record high World corn production of 1,025.7 million metric tons (mmt) is
projected for “new crop” MY 2016/17, up from 959.1 mmt in “old crop” MY 2015/16, and up from 1,014.4
mmt in MY 2014/15.
Record high World corn total supplies of 1,235.7 mmt are projected for “new crop” MY 2016/17, up from
1,168.1 mmt in “old crop” MY 2015/16, and from 1,189.7 mmt in MY 2014/15. World corn exports of 143.8
mmt are projected for “new crop” MY 2016/17, up from 119.5 mmt in “old crop” MY 2015/16, and from 141.7
mmt in MY 2014/15. Projected World corn ending stocks of 216.8 mmt (21.3% S/U) in “new crop” MY 2016/17
are up from 210.9 mmt (21.9% S/U) in “old crop” MY 2015/16, and from 208.9 mmt (21.3% S/U) in MY
2014/15. Although World corn ending stocks are projected to be a record high in “new crop” MY 2016/17 at
216.8 mmt, World corn percent ending stocks‐to‐use in “new crop” MY 2016/17 are forecast to actually
decline to 21.3% ‐ indicative of expected continued strong World demand for corn at low prices – especially in
Europe where grain production has been hampered by extreme weather conditions.
Brazil corn production in “old crop” MY 2015/16 (1st crop harvested in January‐May 2016, 2nd crop harvested
in May‐August) is estimated to be 67.0 mmt, down 18.0 mmt (down 21.2%) from 85.0 mmt in MY 2014/15.
This shortfall in Brazilian corn production in 2016 has provided support for U.S. corn exports and even ethanol
production (via exports). However, expectations of a record large 2016 U.S. corn crop have had a predominant
negative impact on U.S. corn market prices through late summer and early fall. Brazilian corn production is
forecast by the USDA to rebound back to 83.5 mmt in MY 2016/17 (2017 production). Uncertainty about
Brazilian corn production prospects in 2017 could be a major factor impacting U.S. and World corn prices in the
coming spring and summer months of 2017.
China corn production in “new crop” MY 2016/17 (harvested in September‐October 2016) is estimated to be
216.0 mmt, down 8.6 mmt (down 3.8%) from 224.6 mmt in MY 2015/16, but marginally higher than 215.65
mmt in MY 2014/15. A major focus in World corn markets is on the size of Chinese ending stocks and on
recent changes in China’s domestic corn stock management policies. Ending stocks of corn in China are
projected to be 103.7 mmt (45.9% SU) in “new crop” MY 2016/17, down from 110.7 mmt (50.9% S/U) in “old
crop” MY 2015/16, but up from 100.5 mmt (49.7% S/U) in MY 2014/15. Over the last three marketing years,
percent ending stocks‐to‐use of corn for China ranging from 49.7% to 50.9% are the highest since MY 2002/03
(51.6%). During the interim MY 2003/04 to MY 2013/14 period, Chinese corn percent ending stocks‐to‐use
averaged 30.5%, ranging from 25.2% to 39.1%.
…
December 28, 2016
Grain Market Outlook
icipation of continued
strong use of 2016 crop U.S. corn for domestic U.S. ethanol production and livestock feeding, 3) at least
moderate strength in U.S. corn exports – driven partly by a poor harvest and lack of exportable supplies in
Brazil in 2016 as well as other World corn market factors, and 4) the always present possibility of broader U.S.
and Foreign economic and/or financial system disruptions impacting grain, energy, and other commodity
markets in 2017.
For example, U.S. financial policy announcements by the U.S. Federal Reserve in 2017 could lead to increases
in U.S. interest rates and the value of the U.S. dollar relative to other World currencies, which could in turn
have a negative impact on U.S. corn exports. Also, 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 “Current” MY 2016/17: With USDA projections of 2016 U.S. corn plantings
of 94.490 ma, harvested acres of 86.836 ma, record high projected yields of 175.1 bu/ac (vs 168.4 bu/ac in
2015 and the previous record high of 171.0 bu/ac in 2014), 2016 U.S. corn production is forecast to be a record
high 15.226 bb – up from 13.601 bb in 2015, the previous record of 14.216 bb in 2014, and 13.829 bb in 2013.
With forecast “current” MY 2016/17 total supplies of 17.031 bb (record high), total use of 14.610 bb (record
high), and projected ending stocks of 2.403 bb (16.45% S/U) – up from 1.738 bb (12.72% S/U) in MY 2015/16
and the highest since 4.259 bb (54.90% S/U) in MY 2004/05 – U.S. corn prices are projected by the USDA to be
in the range of $3.05‐$3.65 (midpoint = $3.35 /bu) – being down from $3.61 /bu for MY 2015/16. (continued)
USDA Supply‐Demand Forecast for “Next Crop” MY 2017/18: With early USDA projections of 2017 U.S. corn
plantings of 90.000 ma (down 4.490 ma), harvested acres of 82.300 ma (down 4.536 ma), projected yields of
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170.8 bu/ac (vs the record high of 175.3 in 2016), 2017 U.S. corn production is forecast to be 14.060 bb – down
from the record high of 15.226 bb in 2016.
With forecast “next crop” MY 2017/18 total supplies of 16.513 bb (down 500 mb from last year’s record high),
total use of 14.215 bb (down 395 mb from last year’s record high), and projected ending stocks of 2.298 bb
(16.17% S/U) – down from 2.403 bb (16.45% S/U) in “current” MY 2016/17 – U.S. corn prices are projected by
the USDA to average $3.30 /bu. 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
of lower U.S. corn yields and production than projected by the USDA in the December 1st USDA early supply‐
demand estimate for “next crop” MY 2017/18.
KSU “Next Crop” MY 2017/18 Scenario #1) “167.4 bu/ac – 13.777 bb” Scenario (25% probability) assumes:
90.000 ma planted, 82.300 ma harvested, 167.4 bu/ac trend yield, 13.777 bb production, 16.230 bb total
supplies, 14.215 bb total use, 2.015 bb ending stocks, 14.18% S/U, & $3.55 /bu U.S. corn average price for
“next crop” MY 2017/18;
KSU “Next Crop” MY 2017/18 Scenario 2) “165.0 bu/ac – 13.580 bb” Scenario (15% probability) assumes:
90.000 ma planted, 82.300 ma harvested, 165.0 bu/ac yield, 13.580 bb production, 16.033 bb total supplies,
14.215 bb total use, 1.818 bb ending stocks, 12.79% 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 – 12.345 bb” Scenario (5% probability) assumes:
90.000 ma planted, 82.300 ma harvested, 150.0 bu/ac yield, 12.345 bb production, 14.798 bb total supplies,
13.460 bb total use, 1.338 bb ending stocks, 9.94% S/U, & $4.30 /bu U.S. corn average price for “next crop” MY
2017/18;
World Corn Supply‐Demand: Record high World corn production of 1,039.7 million metric tons (mmt) is
projected for “current” MY 2016/17, up 8.2% from 961.1 mmt in MY 2015/16, and up 2.5% from 1,014.0 mmt
in MY 2014/15. Record high World corn total supplies of 1,248.7 mmt are projected for “new crop” MY
2016/17, up from 1,169.3 mmt in MY 2015/16, and from 1,188.8 mmt in MY 2014/15.
World corn exports of 147.7 mmt are projected for “new crop” MY 2016/17, up 21.8% from 121.2 mmt in MY
2015/16, and up 3.9% from 142.2 mmt in MY 2014/15. Projected record high World corn ending stocks of
222.25 mmt (21.7% S/U) in “new crop” MY 2016/17 are up from 208.95 mmt (21.8% S/U) in MY 2015/16, and
from 208.3 mmt (21.2% S/U) in MY 2014/15.
Although World corn ending stocks are projected to be a record high in “new crop” MY 2016/17 at 222.25
mmt, World corn percent ending stocks‐to‐use in “new crop” MY 2016/17 are forecast to actually decline
marginally to 21.7% ‐ indicative that strong World demand for corn at low prices is expected to continue –
especially in Europe where grain production has been hampered by extreme weather conditions in the last
year.
…
December 31, 2016
Grain Market Outlook
…
March 2, 2017
Grain Market Outlook
nd, anticipation of
continued strong use of 2016 crop U.S. corn for domestic U.S. ethanol production and livestock feeding
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
Page | 2
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.
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September 28, 2017
Grain Market Outlook
held for sale through the
winter into at least early spring 2018
2) Anticipation of continued strong domestic U.S. fuel ethanol use and livestock feeding of the 2017 crop U.S.
feedgrains through the “new crop” 2017/18 marketing year.
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3) At least moderate strength in U.S. grain sorghum exports – with the possibility that prospects for a smaller
2018 South American feedgrain harvest that may help U.S. exports of grain sorghum and other feedgrains.
4) The possibility in late 2017‐2018 of broader U.S. and Foreign economic and/or financial system disruptions
impacting grain, energy, and other commodity markets. The impact on the direction of U.S. and World
grain sorghum and corn markets from these potential disruptions is difficult to anticipate or predict.
4. USDA Supply‐Demand Forecast for “New Crop” MY 2017/18
The USDA has projected of 2017 U.S. sorghum plantings of 5.987 ma, harvested acres of 5.311 ma, and
yields of 69.8 bu/ac (vs 77.9 bu/ac in 2016 and 76.0 bu/ac in 2015), resulting in a 2017 U.S. grain sorghum
production of forecast to be 371 mb. This size of a 2017 U.S. grain sorghum crop is the lowest in five years,
being down from 480 mb in 2016, 597 mb in 2015, 433 mb in 2014, and 392 mb in 2013.
With forecast “new crop” MY 2017/18 total supplies of 399 mb, total use of 370 mb, and projected ending
stocks of 29 mb (7.94% S/U), U.S. grain sorghum prices are projected by the USDA to be in the range of $2.50‐
$3.30 (midpoint = $2.90 /bu). Ending stocks of 29 mb (7.94% S/U) in “new crop” MY 2017/18 compared to 37
mb (6.35% S/U) in “old crop” MY 2016/17, and 18 mb (4.10% S/U) in MY 2015/16. This scenario is given a 50%
likelihood of occurring by KSU Extension Agricultural Economist D. O’Brien.
U.S. grain sorghum prices of $2.90 /bu in “new crop” MY 2017/18 are only a “small relief” from the
multiple‐year downward price trend from the record high of $6.33 /bu in the drought year of MY 2012/13.
Since that record high, U.S. average grain sorghum prices have declined to $4.28 in MY 2013/14, $4.03 in MY
2014/15, $3.31 /bu in MY 2015/16, $2.85 /bu in “old crop” MY 2016/17, and to now to the forecast range of
$2.50‐$3.30 (midpoint ‐ $2.90 /bu) in “new crop” MY 2017/18.
Note: This is a “large U.S. feedgrain crop” – “no major U.S. or Foreign crop problem” scenario. Emerging
production threats and the actual outcome of 2018 U.S. grain sorghum and corn production will play a large
part in driving the U.S. grain sorghum market in the later months of “new crop” MY 2017/18.
5. Alternative KSU Supply‐Demand & Price Forecast for “New Crop” MY 2017/18
Three alternative KSU‐Scenarios for U.S. grain sorghum supply‐demand and prices are presented for “new
crop” MY 2017/18. Each scenario presents the likelihood of lower U.S. grain sorghum acreage, varying yields
and alternative production outcomes than projected for “new crop” MY 2017/18 by the USDA in the
September 12th WASDE report.
A ‐ KSU “New Crop” MY 2017/18 Scenario #1) “Lower Acres – 69.8 bu/ac.” Scenario (15% probability)
assumes: 5.468 ma planted, 4.850 ma harvested, 69.8 bu/ac trend yield, 339 mb production, 368 mb total
supplies, 351 mb total use, 17 mb ending stocks, 4.95% S/U, & $3.05 /bu U.S. grain sorghum average price;
B ‐ KSU “New Crop” MY 2017/18 Scenario #2) “Lower Acres – 75.0 bu/ac.” Scenario (25% probability)
assumes: 5.468 ma planted, 4.850 ma harvested, 75.0 bu/ac trend yield, 364 mb production, 393 mb total
supplies, 370 mb total use, 23 mb ending stocks, 6.22% S/U, & $3.00 /bu U.S. grain sorghum average price;
C ‐ KSU “New Crop” MY 2017/18 Scenario #3) “Lower Acres – 75.0 bu/ac. – Higher Use” Scenario (10%
probability) assumes: 5.468 ma planted, 4.850 ma harvested, 75.0 bu/ac trend yield, 364 mb production,
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393 mb total supplies, 381 mb total use, 12 mb ending stocks, 3.15% S/U, & $3.15 /bu U.S. grain sorghum
average price;
6. World Coarse Grain Supply‐Demand
The USDA projected that “new crop” 2017/18 marketing year World coarse grain total supplies of 1,578.1
mmt will be down 2.3% from 1,615.9 mmt in “old crop” MY 2016/17, but still up 4.7% over 1,507.2 mmt in MY
2014/15. Projected World coarse grain total use of 1,347.8 mmt in “new crop” MY 2017/18 is down 0.5%
from “old crop” MY 2016/17, but up 7.3% over MY 2016/17. “Coarse grains” include grain sorghum, corn,
barley, oats, rye, millet, and mixed grains.
World coarse grain ending stocks are forecast to continue to decline, with the USDA projecting ending
stocks of 230.3 mmt in “new crop” MY 2017/18, down 2.0% from “old crop” MY 2016/17, and down 8.4% from
MY 2015/16. Although World coarse grain ending stocks are projected to be the fourth highest on record in
“new crop” MY 2017/18 at 230.2 mmt, World coarse grain percent ending stocks‐to‐use in “new crop” MY
2017/18 are forecast to actually decline to 17.1% ‐ to the lowest level in four (4) years. This is indicative that
strong World demand for coarse grains at low prices is expected to continue.
…