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October 27, 2015
Grain Market Outlook
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I. U.S. Corn Market Situation and Outlook
I‐A. October USDA Reports & “New Crop” MY 2015/16 Projections
On October 9th in its Crop Production report the USDA National Agricultural Statistics Service (NASS)
made its’ third monthly projection of 2015 U.S. corn production since their August report. Objective “in field”
U.S. corn yield measurements in top U.S. corn producing states were conducted by USDA NASS representatives
between September 26 and October 5, 2015 to gather information on expected U.S. corn yields as of October
1, 2015. During the same time period approximately 11,900 farm operator surveys were conducted by the
USDA primarily by phone. Forecast accuracy of this October 1, 2015 projection is 1.7 percent, indicating that
there is a 67% probability of the final 2015 estimate being within plus or minus 1.7% of the USDA’s October 1st
projection of 13.555 billion bushels, i.e., in the range of 13.325 to 13.785 billion bushels.
On the same day the USDA World Agricultural Outlook Board (WAOB) released its October 2015 World
Agricultural Supply and Demand Estimates (WASDE) report – containing U.S. and World corn supply‐demand
and price projections for the 2013/14, “old crop” 2014/15, as well as the “new crop” 2015/16 marketing years.
The “new crop” 2015/16 marketing year for U.S. corn began on 9/1/2015 and will last through 8/31/2016.
I‐B. CME DEC 2015 & MAY 2016 Corn Futures Trends
The CME DECEMBER 2015 corn contract is now the “lead” corn futures contract – representing “new crop”
2015 corn market price prospects. Local basis adjustments are now being made off DEC 2015 corn futures for
spot cash corn and grain sorghum price bids in North America as well as other World grain markets. The “new
crop” DECEMBER 2015 corn futures market contract initially responded in a “very negative” manner to the
information in the October 9th USDA reports, and in the days afterward has trended sideways‐to‐lower due to
downward harvest pressure. 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.
On the day of the report – Friday, October 9th – Chicago Mercantile Exchange (CME) DECEMBER 2015 corn
futures prices opened at $3.91 per bushel, and traded in a range of $3.81 ½ ‐ $3.94 ¼ during the session,
before settling at $3.82 ¾ – down $0.08 ½ for the day (Figure 1). Since then, DEC 2015 Corn has traded from a
high of $3.86 ¾ on October 14th to a low of $3.72 on Oct. 20th before closing at $3.84 ½ on October 26th.
The CME JULY 2016 corn contract represents price prospects during May – June, 2016 – including the
anticipated bulk of the key U.S. corn planting period of late April through May, 2016. JULY 2016 is the futures
contract which local basis adjustments are made off of for most of the “spring 2015” corn and grain sorghum
forward contract price bids or hedges. The JULY 2015 corn futures market contract also initially responded
“negatively” to the information in the October 9th USDA reports, and since has trended sideways‐to‐lower.
On the day of the report CME JULY 2016 corn futures prices opened at $4.12 ¾ per bushel, trading within
the range of $4.04 ‐ $4.16 during the session, before settling at $4.05 ¼ – down $0.07 ¾ per bushel for the day
(Figure 1). Since then, JULY 2016 Corn has traded from a high of $4.08 ¼ on Wednesday, October 14th to a
low of $3.94 on Friday, October 23rd before closing at $4.03 ¾ on Monday, October 26th.
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Figure 1. DECEMBER 2015 & MAY 2016 CME Corn Futures Price Charts …
December 2, 2015
Grain Market Outlook
p production, could
each still impact corn market price direction and volatility in the later part of “new crop” 2015/16 marketing
year. Also, low feedgrain prices have resulted in lower input costs and improved profitability for U.S. and
Foreign livestock feeding and bioenergy use …
May 18, 2015
Grain Market Outlook
… I‐C. U.S. Corn Supply‐Demand – Focus on “New Crop” 2015/16 Projections
U.S. Corn Acreage, Yield & Production
In the March 31, 2015 USDA Prospective Plantings report the USDA projected that 2015 U.S. corn total
planted acreage would be 89.199 million acres (ma), down 2.398 ma (‐1.5%) from 90.597 ma in 2014, down
6.166 ma (‐6.5%) from 95.365 ma in 2013, down 8.092 ma (‐8.3%) from 97.291 ma in 2012, and down from
91.921 ma in 2011 (Table 1 and Figure 3).
Given the USDA’s implicit assumption of an average harvested‐to‐planted acreage of 91.6%, 2015 U.S. corn
harvested acreage would be approximately 81.715 ma, down 1.421 ma (‐1.7%) from 83.136 ma in 2014, down
5.736 ma (‐6.6%) from 87.451 ma in 2013, down 5.650 ma (‐6.5%) from 87.365 ma in 2012, and down from
83.981 ma in 2011.
The 2014 U.S. average corn yield of 171.0 bushels per acre (bu/ac) is a record high and unchanged from
the January‐May USDA reports, and is higher than the 166.8 bu/ac estimate for 2015 in the May WASDE report
(Table 1 and Figure 4). Although this early 2015 USDA projection of 166.8 bu/ac is down from 171.0 bu/ac in
2014, it would be the second highest U.S. corn yield on record, being up from 158.1 bu/ac in 2013, the drought
affected 2012 low yield of 123.1 bu/ac., 147.2 bu/ac in 2011, 152.8 bu/ac in 2010, and up from the previous
historic record high of 164.7 bu/ac in 2009.
Based on this combination of projections for 2015 planted acreage (89.199 ma – from the USDA),
harvested acreage (81.715 ma – a KSU assumption calculated by dividing the USDA’s 2015 production forecast
by the 2015 yield projection), and yield (166.8 ma – USDA), 2015 U.S. corn production would be 13.630 billion
bushels (bb) – down from the record high of 14.216 bb 2014, and the previous record high of 13.829 bb in
2013 – but up from 10.755 bb in 2012, 12.314 bb in 2011, 12.425 bb in 2010, and 13.067 bb in 2009 (Table 1).
U.S. Corn Total Supplies
The USDA projects that total supplies of U.S. corn for “new crop” MY 2015/16 are a record high 15.506 bb
– resulting from beginning stocks of 1.851 bb, projected 2015 production of 13.630 bb, and projected imports
of 25 million bushel (mb) (Table 1 and Figure 5). Total supplies of near 15.506 bb in “new crop” MY 2015/16
would be a record high, being comparable to 14.362 bb in MY 2007/08, 13.729 bb in MY 2008/09, 14.749 bb in
MY 2009/10, 14.161 bb in MY 2010/11, 13.471 bb in MY 2011/12, 11.904 bb in “short crop” MY 2012/13,
14.686 bb in MY 2013/14, and the previous record high of 15.472 bb in “current” MY 2014/15.
The USDA forecast of beginning stocks of 1.851 bb in “new crop” MY 2015/16 is up substantially from
1.232 bb in beginning stocks in “current crop” MY 2014/15, 821 mb in MY 2013/14, 989 mb in MY 2012/13,
and 1.128 bb in MY 2011/12, and at least moderately larger than 1.708 bb in MY 2010/11, 1.673 bb in MY
2009/10, and 1.624 bb in MY 2008/09. This amount of beginning stocks in “new crop” MY 2015/16 of 1.851 bb
is up considerably from the low of 426 mb that occurred in MY 1996/97, and is the highest since 1.967 bb in
MY 2006/07 and 2.114 bb in MY 2005/07 (Table 1 and Figure 5).
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Projected imports of 25 mb in “current crop” MY 2015/16 are equal to “current” MY 2014/15, but down
from 36 mb in MY 2013/14 (the 2nd highest on record), and are also down sharply from the record high of 160
mb in the drought‐stressed 2012/13 marketing year. These amounts of U.S. corn imports are comparable to
29 mb in MY 2011/12, and 28 mb in MY 2010/11.
U.S. Corn Use by Category & Total Use
U.S. Ethanol Production and Corn Usage: Projected U.S. corn use for ethanol production of 5.200 bb in
“new crop” MY 2015/16 is unchanged from 5.200 bb in “current” MY 2014/15, but up from 5.134 bb in MY
2013/14, 4.641 bb in MY 2012/13, and 5.000 bb in MY 2011/12 (Table 1 and Figures 6‐7).
Figure 7 shows weekly U.S. oxygenated plant production of fuel ethanol as reported by the U.S. Energy
Information Administration (www.eia.gov) with a calculated estimate of corn use developed by Kansas State
University. Assuming 2.83 gallons of ethanol produced per bushel of corn (equaling the calculated conversion
of U.S. corn into ethanol in January 2015), these calculations indicate that the equivalent projected annual rate
of U.S. corn used for ethanol production for “current crop” MY 2014/15 has ranged from 4.830‐5.438 bb on a
weekly basis since early September 2014 ‐ the beginning of the “current crop” 2014/15 marketing year. Over
the period of September 1, 2014 through May 8, 2015, corn usage for ethanol production was been on pace to
reach 5.170 bb in “current crop” MY 2014/15. This estimate of 5.170 bb is only 30 mb less than the USDA’s
May 12, 2015 WASDE report estimate of 5.200 bb of corn to be used for ethanol production during “current
crop” MY 2014/15, with 36 of 52 weeks (69.2%) of the marketing year completed.
U.S. Corn Use as Distillers Grains: An estimate of the U.S. corn equivalent amounts of distillers grains
(DDGS) use for direct livestock feeding and exports is p …
August 6, 2021
Land Buying and Valuing
Statistical Methodology
Survey Procedures: The estimates … primarily on the June Area Survey, conducted
during the first … weeks of June. This annual survey uses a complete, probability-based …
August 8, 2022
Land Buying and Valuing
Statistical Methodology
Survey Procedures: The estimates … primarily on the June Area Survey, conducted
during the first … weeks of June. This annual survey uses a complete, probability-based …
January 13, 2022
Monthly Meat Demand Monitor (Prior Years)
MDM is a monthly online
survey with a sample of over 2,000 … report, insights from the MDM surveys conducted between July and … report. Data from over 12,000 survey respondents are used
to …
August 9, 2023
Land Buying and Valuing
Statistical Methodology
Survey Procedures: The estimates … primarily on the June Area Survey, conducted
during the first … weeks of June. This annual survey uses a complete, probability-based …
August 2, 2024
Land Buying and Valuing
Statistical Methodology
Survey Procedures: The estimates … primarily on the June Area Survey, conducted
during the first … weeks of June. This annual survey uses a complete, probability-based …
August 1, 2025
Land Buying and Valuing
Statistical Methodology
Survey Procedures: The estimates … Values and
Technology Use Survey, conducted from April to … April to June. This annual survey uses a stratified random …
June 24, 2019
Grain Market Outlook
… one else who fills out these weekly surveys of crop progress take the
approach of “rebasing” their expectations of crop progress relative to the status of the crop and their
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evolving planting intentions or crop development realities at the beginning of the weekly reporting
period. Their assessments of crop progress are based on their updated expectations instead of either
their original intentions of planted acres OR regular historical rates of crop development.
This tendency has been more of a critical issue in year 2019 because of the excessive cropland
moisture situation that has occurred in the U.S. Corn Belt, and the delays in corn plantings it has
caused. This is particularly relevant due to the likelihood of a much higher than normal amount of
prevented planting acreage in 2019.
Consequently, when farmers indicate they may be 100% completed in their plantings this year, it
is likely to refer to their completion of all that they actually CAN plant – excluding those saturated
and/or flooded acres that cannot be planted at least to corn in 2019 and that they have given up on
for corn acreage this year. Since farmers expectations regarding what their planted acres can
reasonably BE planted in a saturated year such as 2019, then their BASE expectations are “dynamic”.
After all this wrangling over definitions, in so many words, the 92% planted acreage estimate
reported for June 16th by the USDA NASS Crop Progress report is likely overstated because U.S.
farmers are implicitly accounting for either prevented plantings or switching to other crops as they fill
out the reports of weekly corn planting completion for USDA.
4 …