Search
Displaying 621 - 630 of 694
September 6, 2016
Grain Market Outlook
Page | 3
I. U.S. Wheat Market Situation & Outlook
August 12th USDA Crop Production & WASDE Reports
On August 12th the USDA National Agricultural Statistics Service (NASS) released its August 2016 Crop
Production report – containing updated U.S. winter, other spring, and durum wheat yield and production
forecasts for 2016 – with information specific to the 2016 U.S. hard red winter (HRW) wheat, soft red winter
(SRW) wheat, white winter (WW), hard red spring (HRS), and durum wheat crops.
Information from the USDA June 30th 2016 Acreage report has been used by the USDA as the base
estimate for the USDA’s 2016 U.S. wheat planted and harvested acreage forecast in the July 12th and August
12th USDA Crop Production and USDA WASDE reports.
The NASS 2016 U.S. winter, spring, and durum wheat yield and production forecasts were derived by the
USDA using a combination of a) an objective yield survey, and b) a farmer operator survey – both conducted
during the July 25 – August 8 period, with the goal of representing production prospects as of August 1, 2016.
Also on August 12th the USDA World Agricultural Outlook Board (WAOB) released its August 2016 World
Agricultural Supply and Demand Estimates (WASDE) report – containing U.S. and World wheat supply‐
demand and price projections for the 2014/15, “old crop” 2015/16, and “current crop” 2016/17 marketing
years. The “current crop” 2016/17 marketing year for U.S. wheat began on 6/1/2016 and lasts through
5/31/2017. Projections for the “next crop” 2017/18 marketing year for U.S. wheat represent the 6/1/2017
through 5/31/2018 time frame.
CME Kansas Hard Red Winter Wheat DEC 2016 & JULY 2017 Futures
Since a low of $4.83 ½ per bushel on May 11, 2016, DECEMBER 2016 CME Kansas hard red winter
wheat futures prices traded up to a high of $5.35 ½ on June 8th. From that June 8th high, prices fell
$1.15 ½ per bushel to a low of $4.24 on July 5th. DECEMBER 2016 CME KS HRW Wheat futures then
traded in a sideways range during the July 6th through August 25th period – ranging from a high of
$4.58 (on 7/13/2016) to a low of $4.25 ¾ (on 7/22/2016) – before falling to a low of $3.95 per bushel
on August 31st. Since then, DEC 2016 CME KS HRW Wheat futures have risen to close at $4.13 ¼ per
bushel on Friday, September 2nd (Figure 1).
JULY 2017 CME Kansas hard red winter wheat futures prices traded down to a low of $5.16 ½ per
bushel on May 11, 2016, and then trended higher up to $5.69 ¾ on June 8th. From that June 8th high,
prices fell $1.08 per bushel to a low of $4.61 ¾ on July 5th. Then JULY 2017 CME KS HRW Wheat
futures traded in a sideways range during the July 6th to the August 25th period – from a high of $4.94
(on 7/13/2016) to a low of $4.64 (on 7/22/2016) – before falling to a low of $4.32 on August 31st.
Since then, DEC 2016 CME KS HRW Wheat futures have risen to close at $4.49 ¼ per bushel on Friday,
September 2nd (Figure 1).
…
May 1, 2005
Industry Economics & Trade
of Ag Economics MF-2679 Livestock Economics
Kansas State University … about 16 percent.
Consumer surveys at that time suggested that … regionally targeted
consumer survey. The results suggest that …
September 19, 2011
Macro and Global Economic Perspectives
slumping demand
curtailed livestock profits
• The U.S. and … and August 2011 Forecast Survey (Average)
WSJ
Forecast … of Labor and Statistics, Survey of Professional Forecasters …
September 19, 2011
Swine
slumping demand
curtailed livestock profits
• The U.S. and … and August 2011 Forecast Survey (Average)
WSJ
Forecast … of Labor and Statistics, Survey of Professional Forecasters …
March 25, 2019
Grain Market Outlook
Wheat Market Overview
Hard red winter wheat market prices in the U.S. have weakened considerably since late January
2019. Ongoing weakness in export shipments of U.S. wheat on the one hand, and declining prospects
for future U.S. wheat export sales on the other, have been the main causes along with general
bearishness across grain futures prices.
In Fall‐Winter 2018 prospects for short wheat crops among some major World wheat exporters
improved prospects for U.S. export sales in the later part of the “current” 2018/19 marketing year
(MY). “Current” MY 2018/19 began on 6/1/2018 and will finish on 5/31/2019. In particular, short
crops in the Black Sea Region countries of Russia, Ukraine and Kazakhstan, parts of the European
Union (France and other countries), and Australia were of concern.
However, a combination of #1) large carryover stocks in World markets from “old crop” MY
2017/18, #2) successful wheat crops in many other exporting and importing countries in the World,
and #3) the willingness of the Black Sea Region countries to sell down their domestic reserve stocks
to maintain their export market shares, worked together to limit any improvement in U.S. wheat
exports, and consequently limit any price gains from such an event.
The selling off of domestic inventories may have allowed Russia and other countries to have
maintained their export market shares in “current” MY 2018/19, but it makes them more vulnerable
to any repeated crop shortfalls that could occur in “new crop” MY 2019/20 – which will begin on June
1, 2019. The risk of tightening stocks is that these countries place themselves at risk to the effect of
market shortfalls in the future – because they have reduced their “buffer” stocks.
Going forward, it seems that wheat production risk in the major exporting countries – including
the United States, Russia, Ukraine, Australia, and the European Union – will be the key driving factor
in U.S. grain markets in year 2019. The possibility of rumored sizable increases in Chinese purchases
of U.S. wheat and other agricultural products IF a trade agreement between the U.S. and China is
completed could provide a surprise boost to U.S. wheat exports in coming months. But it seems
judicious to not count on that occurring until such a trade agreement is finalized.
B. Trends in CME Kansas Hard Red Winter Wheat Futures
Prices for the MAY 2019 Chicago Mercantile Exchange (CME) Kansas Hard Red Winter (HRW)
Wheat futures contract declined from a high of $5.23 per bushel (/bu) on January 25, 2019 to a low of
$4.18 ¼ /bu on March 12th, a drop of $1.04 ¼ or 20%. Since then, MAY 2019 CME HRW wheat has
moved higher to a close of $4.45 on March 22nd – down 15% from late‐Jan. 2019 highs (Figures 1‐2‐
3abc).
Page | 2
Currently CME MAY 2019 Kansas HRW Wheat futures are trading near historic lows since the
beginning of year 2007. Prices for MAY 2019 futures in the $4.40‐$4.50 range compare to longter
term lows of: a) $4.33 /bu for the MAY 2007 contract on 4/2/2007; b) $3.98 ¾ /bu for MAY 2017 on
4/21/2019; and $4.04 /bu for DEC 2017 on 11/28/2018. IF crop conditions and crop progress for the
2019 U.S. HRW Wheat crop are “good” in April 2019 it is possible that prices could AGAIN decline to
$4.00 /bu or less (Figures 1‐2).
It is notable that a record large net short (or sell) position is held by Management Money
(Speculator) traders in CME HRW wheat according to the most recent March 19th Commodity Futures
Trading Commission (CFTC) Commitment of Traders Report (Figures 3abc). Actual short (sell)
positions held by Management Money (Spec) traders are near record levels, combined with declining
long positions on these contracts. This report can be found at the following web address:
https://www.cftc.gov/MarketReports/CommitmentsofTraders/index.htm
Taken together, these data indicate a predominant “bearishness” among Management Money
(Spec) traders in the CME Kansas HRW Wheat futures contract. This consensus “bearish market
narrative” or “pessimistic group mindset” would have to be overcome or changed by some
combination of World and U.S. wheat supply‐demand factors in the wheat market for CME futures to
begin to move appreciably higher. The key issue to watch in these markets will likely be whether
there continue to be successful aggregate crop production prospects among major World wheat
producing, exporting, and importing countries throughout calendar year 2019.
C. Kansas HRW Wheat Cash Price & Basis Levels
In central Kansas on March 22nd – the 10th trading day a full two weeks after the USDA reports –
Kansas cash wheat price terminal quotes for ordinary U.S. no. 1 HRW ranged from $4.19 to $4.55 per
bushel – with basis ranging from $0.26 under to $0.10 over MAY 2019 KS HRW Wheat futures. Cash
wheat prices in eastern Kansas grain terminals ranged from $4.30 to $4.50 /bu with basis ranging
from $0.15 under to $0.05 over MAY 2019 futures. These prices are still up 19% to 22% from the
range of $3.42 ¼ to $3.83 ¼ /bu in late December 2017 in eastern and central Kansas – with basis at
that time being from $0.80 under to $0.39 under nearby MARCH 2018 futures (Figure 2).
In comparison, in western Kansas on March 22nd, bids for ordinary U.S. no. 1 HRW wheat at
selected grain elevators ranged from $3.92 to $4.19 /bu, with basis being $0.55 under to $0.28 under
MAY 2019 futures. Recent wheat cash price bids in western Kansas are up 13% to 15% from $3.47 to
$3.64 /bu in late December 2017 in this same area – when local basis varied from $0.85 under to
$0.58 under MARCH 2018 futures.
A Hard White Wheat (HWW) grain terminal bid was available in Wichita, Kansas on 3/22/2019
for $4.4000 /bu, with a basis of $0.05 /bu under MAY 2019 Kansas HRW wheat futures.
Page | 3
D. World Wheat Production
In aggregate, forecast global World wheat production in “current” MY 2018/19 of 733.00 mmt is
down 3.9% from last year’s record high of 763.07 mmt. Lower production has occurred in the
“current” 2018/19 marketing year (which began June 1, 2018) in some major exporting countries
such as Australia (down 18.8% to 17.30 million metric tons or ‘mmt’ from a year ago) and the
European Union (down 9.0% in total to 137.60 mmt). In the Black Sea Region, wheat production is
down in Russia (down 15.6% to 71.69 mmt), Ukraine (down 7.3% to 25.00 mmt), and Kazakhstan
(down 5.5% to 13.95 mmt) (Figures 13, 14a‐b & 15a‐b).
These declines were partially offset by production increases projected for exporters such as the
United States (up 8.3% to 51.29 mmt or 1.884 billion bushels, i.e., ‘bb’), Argentina (up 5.4% to 19.5
mmt), and Canada (up 6.1% to 31.80 mmb). Production in China is projected to be down 2.2% to
134.43 mmt, while India wheat production is forecast to be up 1.2% to 99.70 mmt.
E. World Wheat Ending Stocks & % Stocks‐to‐Use
Record large carryover ending stocks of 279.61 mmt (37.56% stocks‐to‐use) from “old crop” MY
2017/18 have upheld total World supplies and supply‐demand balances – which are projected to be
270.53 mmt (36.45% stocks‐to‐use) in “current” MY 2018/19. Percent ending stocks‐to‐use of
37.56% in “old crop” MY 2017/18 were record high in the modern era since the early 1970s, while
34.46% stocks/use in “current” MY 2018/19 are the 2nd highest since the farm crisis years of the mid‐
1980s, and the 4th highest in the modern era (Figures 13, 14a‐b & 15a‐b).
In response to lower production, Russia has chosen to “sell down” it’s carryover wheat stocks to
maintain market position in global trade. Russia wheat ending stocks are projected to be 6.55 mmt in
“current” MY 2018/19, down from 11.87 mmt in “old crop” MY 2017/18, and from 10.83 mmt in MY
2016/17. In the short run this strategy of “mining” of carryover stocks by Russia DOES allow it to
maintain World export market share in “current” MY 2018/19. HOWEVER, this strategy ALSO may
leave future Russian supply‐demand balances more vulnerable to any domestic crop shortfall that
may occur in “new crop” MY 2019/20 and succeeding years.
F. “World‐Less‐China” Wheat Ending Stocks & % Stocks‐to‐Use
Considering World wheat ending stocks adjusted for Chinese reserves (i.e., “World‐Less‐China”)
provides a much tighter picture of “accessible” or “available” World wheat supply‐demand balances
than the aggregate “World” measure. “World‐Less‐China” wheat carryover ending stocks are
calculated to be 130.53 mmt in “current” MY 2018/19 – down from 148.35 mmt in “old crop” MY
2017/18. These figures compare to World ending stocks of 270.61 mmt in “current” MY 2018/19,
and 249.61 mmt in “old crop” MY 2017/18 (Figure 15ab).
“World‐Less‐China” percent (%) ending stocks‐to‐use are estimated to be and 11 year low of
21.15% in “current” MY 2018/19 – down from 23.80% in “old crop” MY 2017/18. This compares to
aggregate World Stocks‐to‐Use of 36.45% in “current” MY 2017/18, and 37.56% in “old crop” MY
20017/18.
Page | 4
This “tightness” in “World‐Less‐China” wheat stocks along with tighter exportable supplies in the
European Union and the Black Sea region appear to have provided quiet support to World wheat
market prices, but has not as of yet caused any major rallies.
G. 2019 U.S. Winter Wheat Conditions
Prospects for the 2019 U.S. winter wheat crop are mostly “Fair to Good” at this time in the
southern and central plains region of the country. Reports from the USDA National Agricultural
Statistics Service (NASS) in Kansas for the week ending March 17, 2019 indicated that a survey of
observers in the sta …
April 25, 2016
Grain Market Outlook
Nino‐La Nina transition”‐ related weather patterns in spring‐summer
2016 with an eye toward their possible negative impacts on 2016 crop production, could each still impact corn
market prices through summer‐fall 2016. Also, low feedgrain prices have resulted in lower input costs for U.S.
and Foreign livestock feeding and bioenergy users – leading to strong domestic and foreign feedgrain usage
and providing underlying support for U.S. corn exports. In the “current” 2015/16 marketing year the high
value of the U.S. dollar and prospects for a large 2016 South American corn crop have been significant limiting
factors for U.S. corn exports – although the U.S. dollar has been trending lower in recent weeks.
USDA Estimate for “Current” MY 2015/16: The USDA made several changes to the U.S. corn supply‐demand
balance sheet for “current crop” MY 2015/16 – with 2015 U.S. corn production of 13.601 bb, and total supplies
of 15.382 bb for MY 2015/16. Total use is projected to be 13.521 bb (down 24 million bushels or ‘mb’) Ethanol
use was projected to be 5.250 bb (up 25 mb), with non‐ethanol Food, Seed, and Industrial (FSI) use of 1.371 bb
(up 1 mb), exports of 1.650 bb, and feed and residual use of 5.250 bb (down 25 mb). Ending stocks are
forecast to be up 25 mb to 1.862 bb (13.77% S/U) in “current” MY 2015/16 – up from 1.731 bb (12.6% S/U) in
“old crop” MY 2014/15, and 1.232 bb (9.2% S/U) in MY 2013/14. U.S. corn average cash prices are forecast to
be in the range of $3.40‐$3.70 /bu. ($3.55 midpoint) versus $3.70 in “old crop” MY 2014/15, $4.46 in MY
2013/14, and $6.89 (record high) in MY 2012/13.
Adjusted USDA Forecast for “Next Crop” MY 2016/17: An adjusted version of the USDA’s “next crop” MY
2016/17 forecast for U.S. corn is presented here, building on the information presented by the USDA at its
Agricultural Outlook Forum in Arlington, VA on February 25‐26, with 2015 U.S. corn planted acres matching
the higher March 31st Prospective Planting report planted acreage forecast. Projected 2016 U.S. corn
plantings equal 93.601 ma – up 5.602 ma from 2015. Forecast 2016 harvested acres of 85.413 ma would be up
4.664 ma vs 2015. With projected yields of 168.0 bu/ac, 2016 U.S. corn production is projected to be a record
14.349 billion bushels (bb) – up from 13.829 bb in 2013, 14.216 bb in 2014, and 13.601 bb in 2015. With
forecast MY 2016/17 total use of 13.725 bb (2nd highest behind 13.748 bb in “old crop” MY 2014/15), and
projected ending stocks of 2.486 bb (18.11% S/U) – up from 1.862 bb (13.77% S/U) in “current crop” MY
2015/16, U.S. corn prices are projected by the USDA to be $3.45 /bu – down from the $3.55 /bu midpoint
estimate for “current” MY 2015/16 and subject to lowering in future USDA WASDE reports. This scenario is
given a 35% likelihood of occurring by KSU.
Page | 2
KSU Forecast for “Next Crop” MY 2016/17: Three alternative KSU‐Scenarios for U.S. corn supply‐demand and
prices are presented for “next crop” MY 2016/17, with each assuming a 1.5 ma downward adjustment in 2016
U.S. corn planted acres from the USDA’s March 31st Prospective Plantings report. A) KSU‐Scenario A (Lower
Acres & Trend Yield) (30% probability) assumes for “next crop” MY 2016/17: 92.101 ma planted, 84.404 ma
harvested, 164.5 bu/ac yield, 13.825 bb production, 15.727 bb total supplies, 13.640 bb total use, 2.087 bb
ending stocks, 15.30% S/U, & $3.20 /bu U.S. corn average price; B) KSU‐Scenario B (Lower Acres & Moderate
Drought) (25% prob.) assumes 92.101 ma planted, 84.404 ma harvested, 158.0 bu/ac yield, 13.279 bb
production, 15.186 bb total supplies, 13.575 bb total use, 1.611 bb ending stocks, 11.87% S/U, & $3.70 /bu U.S.
corn price; and C) KSU‐Scenario C (Lower Acres & Extreme Drought) (10% prob.) assumes 92.101 ma planted,
84.404 ma harvested, 150.0 bu/ac yield, 12.607 bb production, 14.519 bb total supplies, 13.382 bb total use,
1.137 bb ending stocks, 8.5% S/U, & $4.75 /bu U.S. corn price.
World Corn Supply‐Demand: World total supplies of 1,179.7 million metric tons (mmt) are projected for
“current” MY 2015/16, down from 1,187.9 mmt in “old crop” MY 2014/15, but up from 1,123.9 mmt in MY
2013/14. Projected World corn ending stocks of 208.9 mmt (21.5% S/U) in “current” MY 2015/16 are up from
207.6 mmt (21.2% S/U) in “old crop” MY 2014/15, and from 175.0 mmt (18.4% S/U) in MY 2013/14.
…
June 1, 2016
Grain Market Outlook
ach
still impact corn market prices through summer‐fall 2016. However, farmer resistance to “old crop” cash sales
will be forced to give way in coming months as the 2016 U.S. corn crop develops and approaches harvest in
coming months. Also, low feedgrain prices have resulted in lower input costs for U.S. and Foreign livestock
feeding and bioenergy users – leading to strong domestic and foreign feedgrain usage and providing
underlying support for U.S. corn exports. In the “current” 2015/16 marketing year the high value of the U.S.
dollar and prospects for a large 2016 South American corn crop have been significant limiting factors for U.S.
corn exports – although the U.S. dollar has been trending lower since early February 2016 – coinciding with
moderately improved U.S. corn exports.
USDA Estimate for “Current” MY 2015/16: The USDA made several changes to the U.S. corn supply‐demand
balance sheet for “current crop” MY 2015/16 – with 2015 U.S. corn production of 13.601 bb, and total supplies
of 15.387 bb for MY 2015/16 (up 5 million bushels or ‘mb’ due to increased imports). Total use is projected to
be 13.585 bb (up 64 mb). Ethanol use was projected to be 5.250 bb, with non‐ethanol Food, Seed, and
Industrial (FSI) use of 1.360 bb (down 11 mb), exports of 1.725 bb (up 75 mb), and feed and residual use of
5.250 bb. Ending stocks are forecast to be down 59 mb to 1.803 bb (13.27% S/U) in “current” MY 2015/16 –
up from 1.731 bb (12.6% S/U) in “old crop” MY 2014/15, and 1.232 bb (9.2% S/U) in MY 2013/14. U.S. corn
average cash prices are forecast to be in the range of $3.50‐$3.70 /bu. ($3.60 midpoint) versus $3.70 in “old
crop” MY 2014/15, $4.46 in MY 2013/14, and $6.89 (record high) in MY 2012/13.
USDA Forecast for “New Crop” MY 2016/17: The USDA provided it’s first WASDE report forecast “new crop”
MY 2016/17 forecast for U.S. corn – relying on the USDA March 31st Prospective Planting report planted
acreage forecast and a number of other harvested acreage and yield assumptions. Projected 2016 U.S. corn
plantings equal 93.601 ma – up 5.602 ma from 2015. Forecast 2016 harvested acres of approximately 85.893
ma would be up 5.144 ma vs 2015. With projected yields of 168.0 bu/ac, 2016 U.S. corn production is
projected to be a record 14.430 bb – up from 13.601 bb in 2015, 14.216 bb in 2014, and 13.829 bb in 2013.
With forecast “new crop” MY 2016/17 total use of 14.120 bb (record high), and projected ending stocks of
Page | 2
2.153 bb (15.24% S/U) – up from 1.803 bb (13.27% S/U) in “current crop” MY 2015/16 – U.S. corn prices are
projected by the USDA to be in the range of $3.05‐$3.65 (midpoint = $3.35 /bu) – with the midpoint of $3.35
being down from the $3.60 /bu midpoint estimate for “current” MY 2015/16. This scenario is given a 40%
likelihood of occurring by Kansas State University.
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 1.0 ma downward adjustment in 2016
U.S. corn planted acres from the USDA’s March 31st Prospective Plantings report. A) KSU “trend yield”
scenario (30% probability) assumes the following for “new crop” MY 2016/17: 92.601 ma planted, 84.545 ma
harvested, 164.5 bu/ac trend yield, 13.908 bb production, 15.751 bb total supplies, 13.637 bb total use, 2.114
bb ending stocks, 15.50% S/U, & $3.30 /bu U.S. corn average price; B) KSU “moderate drought” scenario (20%
prob.) assumes 92.601 ma planted, 84.545 ma harvested, 158.0 bu/ac yield, 13.358 bb production, 15.206 bb
total supplies, 13.497 bb total use, 1.709 bb ending stocks, 12.66% S/U, & $3.75 /bu U.S. corn price; and C)
KSU “serious drought” scenario (10% prob.) assumes 92.601 ma planted, 84.545 ma harvested, 150.0 bu/ac
yield, 12.682 bb production, 14.535 bb total supplies, 13.257 bb total use, 1.278 bb ending stocks, 9.6% S/U, &
$4.40 /bu U.S. corn price.
World Corn Supply‐Demand: World total supplies of 1,011.1 million metric tons (mmt) are projected for “new
crop” MY 2016/17, up from 1,176.7 mmt in “current crop” MY 2015/16, and up from 1,188.7 mmt in MY
2014/15. Projected World corn ending stocks of 207.0 mmt (20.5% S/U) in “new crop” MY 2016/17 are up
from 207.87 mmt (21.5% S/U) in “current crop” MY 2015/16, and from 207.88 mmt (21.2% S/U) in MY
2014/15.
…
February 11, 2016
Grain Market Outlook
sition”‐ related weather
patterns in spring‐summer 2016 with negative impacts on 2016 crop production, could each still impact corn market
prices through summer‐fall 2016. Also, low feedgrain prices have resulted in lower input costs for U.S. and Foreign
livestock feeding and bioenergy users – leading to increased feedgrain usage. The high value of the U.S. dollar and
prospects for a large 2016 South American corn crop have been significant limiting factors for U.S. corn exports.
USDA Estimate for “New Crop” MY 2015/16: The USDA estimated 2015 U.S. corn production of 13.601 bb, and for “new
crop” MY 2015/16 that there would be total supplies of 15.382 bb. Total use of 13.545 bb (down 25 million bushels or
‘mb”) – which includes ethanol use of 5.225 bb (up 25 mb over 1 month ago), non‐ethanol FSI use of 1.370 bb, exports of
1.650 bb (down 50 mb from January, and 100 mb from December projections), and feed and residual use of 5.300 bb.
Ending stocks are forecast at 1.837 bb (13.56% S/U) in MY 2015/16 – up 35 mb from last month, and up from 1.731 bb
(12.6% S/U) in “old crop” MY 2014/15, and 1.232 bb (9.2% S/U) in MY 2013/14. U.S. corn average cash prices are forecast
the range of $3.35‐$3.85 /bu. ($3.60 midpoint) versus $3.70 in “old crop” MY 2014/15, $4.46 in MY 2013/14, and $6.89
(record) in MY 2012/13.
USDA Forecast for “Next Crop” MY 2016/17: In their early release Agricultural Projections to 2025 the USDA provided an
initial forecast of U.S. corn supply‐demand and prices for the “next crop” 2016/17 marketing year beginning September 1,
2016. The USDA projected 2016 U.S. corn plantings of 90.500 million acres (ma) – up 2.501 ma from 2015. Forecast 2016
harvested acres of 82.700 ma would be up 1.951 ma vs 2015. With projected yields of 168.1 bu/ac, 2016 U.S. corn
production is projected to be 13.900 billion bushels (bb) – 2nd highest on record behind 14.216 bb in 2014. With forecast
MY 2016/17 total use of 13.935 bb (record high), and an adjusted projection of ending stocks of 1.832 bb (13.15% S/U),
U.S. corn prices are projected by the USDA to be $3.60 /bu – unchanged from the $3.60 /bu midpoint estimate for “new
crop” MY 2015/16.
KSU Forecast for “Next Crop” MY 2016/17: Based on adjustments to the USDA Agricultural Projections to 2025, KSU
projections are for 2016 U.S. corn plantings of 90.500 (unchanged from the USDA), but with 2016 harvested acres of
83.079 ma (91.8% harvested‐to‐planted, equal to MY 2015/16), with trend yields of 164.5 bu/ac, and 2016 U.S. corn
production of 13.666 bb. With forecast MY 2016/17 total use of 13.760 bb, and an adjusted projection of ending stocks of
1.773 bb (12.89% S/U), U.S. corn prices are projected by KSU to be $3.70 /bu – up $0.10 /bu from the USDA’s early
projection for “next crop” MY 2016/17.
KSU 2016 U.S. Corn “Short Crop Scenario – 13.000 Billion Bushels: If significant corn production problems were to occur
in the U.S. in the summer of 2016 resulting in a 13.000 bb corn (156.5 bu/ac yield on 83.079 ma harvested), then all else
being equal, ending stocks in “next crop” MY 2016/17 could decline to 1.107 bb (8.0% S/U), with U.S. corn prices likely to
increase to $5.00‐$5.50 per bushel.
World Corn Supply‐Demand: World total supplies of 1,176.1 million metric tons (mmt) are projected for “new crop” MY
2015/16, down marginally from 1,183.8 mmt in “old crop” MY 2014/15, but up from 1,124.1 mmt in MY 2013/14.
Projected World corn ending stocks of 208.8 mmt (21.6% S/U) in “new crop” MY 2015/16 are up from 206.2 mmt (21.1%
S/U) in “old crop” MY 2014/15, and from 174.8 mmt (18.4% S/U) in MY 2013/14.
Page | 2
I. U.S. Corn Market Situation and Outlook
I‐A. February 9th USDA WASDE Report
On February 9th the USDA World Agricultural Outlook Board (WAOB) released its February 9th 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 MARCH & DECEMBER 2016 Corn Futures Trends
Since a low of $3.48 ½ on January 7, 2016, MARCH 2016 Chicago Mercantile Exchange (CME) corn
futures prices traded up to a high of $3.73 ¾ on February 2nd, but have since declined to a close of
$3.60 ¼ on Wednesday, February 10th (Figure 1). Similarly, since a low of $3.74 ½ on January 7,
2016, MARCH 2016 Chicago Mercantile Exchange (CME) corn futures prices traded up to a high of
$3.95 on February 4th, but have since declined to a close of $3.83 ½ on Wednesday, February 10th.
Figure 1. MARCH & DECEMBER 2016 CME Weekly Corn Futures Price Charts
ne …
December 18, 2015
Grain Market Outlook
n spring‐summer 2016 with negative impacts on 2016 crop production, could each
still impact corn market prices through summer‐fall 2016. Also, low feedgrain prices have resulted in lower
input costs – supporting the profitability for U.S. and Foreign livestock feeding and bioenergy users and leading
to increased feedgrain usage. The high value of the U.S. dollar has been a limiting factor for U.S. corn exports.
USDA Forecast for “New Crop” MY 2015/16: The USDA projected 2015 U.S. corn production of 13.654 billion
bushels (bb), and for “new crop” MY 2015/16 that there would be total supplies of 15.415 bb, and total use of
13.630 bb (down 25 mb) – which includes ethanol use of 5.200 bb (up 25 mb over 1 month ago), non‐ethanol
FSI use of 1.380 bb, exports of 1.750 bb (down 25 mb from November and 75 mb from October projections)
and feed and residual use of 5.300 bb. Ending stocks are forecast at 1.785 bb (13.54% S/U) in MY 2015/16 – up
25 mb from last month, and up from 1.731 bb (12.6% S/U) in “old crop” MY 2014/15. U.S. corn average cash
prices are forecast the range of $3.35‐$3.95 /bu. ($3.65 midpoint) versus $3.70 in “old crop” MY 2014/15,
$4.46 in MY 2013/14, and $6.89 (record) in “drought stricken” MY 2012/13.
KSU U.S. Corn Market Forecasts: Projected supply‐demand and price scenarios by KSU for “new crop” MY
2015/16 are as follows: a) “USDA S/D Estimates” Scenario (80% prob.): All supply‐demand assumptions equal
to the USDA’s, but with $3.60 /bu U.S. corn MYA prices; b) “2015 Smaller Crop” Scenario (10% prob.): U.S.
corn yield of 167.0 bu/ac, 2015 U.S. corn production of 13.470 bb, total supplies of 15.232 bb, total use of
13.630 bb, ending stocks of 1.602 bb, 11.75% S/U, & $4.00 /bu U.S. corn MYA prices; and c) “2015 Economic
Problems” Scenario (10% prob.): U.S. corn production and supplies equal to the USDA estimates, but lower
total use of 13.435 bb, ending stocks of 1.980 bb, 14.7% S/U, & $3.40 /bu U.S. corn MYA prices.
USDA Forecast for “Next Crop” MY 2016/17: In their Agricultural Projections to 2025 the USDA provided an
initial forecast of U.S. corn supply‐demand and prices for the “next crop” 2016/17 marketing year beginning
September 1, 2016. The USDA projected 2016 U.S. corn plantings of 90.5 million acres (ma) – up 2.119 ma
from 2015. Forecast 2016 harvested acres of 82.7 ma would be 2.036 ma vs 2015. With projected yields of
168.1 bu/ac, 2016 U.S. corn production is projected to be 13.900 billion bushels (bb) – 2nd highest on record.
With forecast MY 2016/17 total use of 13.935 bb (record high), and ending stocks of 1.780 bb (12.77% S/U),
U.S. corn prices are projected to be $3.60 /bu – down marginally from $3.65 /bu in “new crop” MY 2015/16.
World Corn Supply‐Demand: World total supplies of 1,182.1 million metric tons (mmt) are projected for “new
crop” MY 2015/16, down marginally from 1,183.7 mmt in “old crop” MY 2014/15, but up from 1,124.3 mmt in
MY 2013/14. Projected World corn ending stocks of 211.9 mmt (21.8% S/U) in “new crop” MY 2015/16 are up
from 208.2 mmt (21.3% S/U) in “old crop” MY 2014/15, and from 174.9 mmt (18.4% S/U) in MY 2013/14.
Page | 2
I. U.S. Corn Market Situation and Outlook
I‐A. December 2015 USDA WASDE Report
On December 9th the USDA World Agricultural Outlook Board (WAOB) released its December 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 MARCH & DECEMBER 2016 Corn Futures Trends
The CME MARCH 2016 corn contract is now the “lead” corn futures contract – representing “new crop”
2016 corn market price prospects. Local basis adjustments are now being made off MARCH corn futures for
spot cash corn and grain sorghum price bids in North America as well as other World grain markets. The “new
crop” MARCH 2016 corn futures market contract initially responded in a “neutral” manner to the information
in the December 9th USDA reports, and in the days afterward has trended sideways‐to‐higher before declining
sharply on Wednesday, Ed. 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 – Wednesday, December 9th – Chicago Mercantile Exchange (CME) MARCH 2016
corn futures prices opened at $3.73 ½ per bushel, and traded in a range of $3.70 ¼ ‐ $3.79 ¼ during the
session, before settling at $3.73 ¾ – up $0.00 ¼ for the day (Figure 1). Since then, MARCH 2016 Corn has
traded from a low of $3.62 ½ on December 17th high of $3.80 ¼ on December 11th to a before closing at $3.74
½ on Friday, December 18th.
Figure 1. MARCH & DECEMBER 2016 CME Weekly Corn Futures Price Charts
ne …
March 17, 2015
Grain Market Outlook
I‐C. U.S. Corn Supply‐Demand – USDA “Current Crop” 2014/15 Projections
U.S. Corn Acreage, Yield & Production
In its March 2015 USDA WASDE report the USDA made no change from the January‐February WASDE
reports in its projection that 2014 U.S. corn total planted acreage was 90.597 million acres (ma), which had
been adjusted down from 90.885 ma in the December WASDE report (Table 1 and Figure 2). Planted acreage
of 90.597 million acres in 2014 is down from 95.365 ma in 2013, 97.291 ma in 2012, and 91.921 ma in 2011.
In addition, the USDA made no change in its January‐February projections of 2014 U.S. corn harvested
acreage of 83.136 ma, which had been adjusted upwards from 83.097 ma in December. Harvested acreage of
83.136 ma in 2014 is down from 87.451 ma in 2013, 87.365 ma in 2012, and 83.981 ma in 2011.
The 2014 proportion of harvested‐to‐planted acreage for all U.S. corn is projected to be 91.8% ‐ which had
been adjusted up from 91.4% in December. This proportion of harvested acreage in 2014 of 91.8% is up
marginally from 91.7% in to 2013, and up from 89.9% in 2012, and 91.4% in 2011.
The projected 2014 U.S. average corn yield of 171.0 bushels per acre (bu/ac) is a record high and
unchanged from the January‐February USDA reports, but is down from earlier USDA projections of 173.4 bu/ac
in December and 174.2 bu/ac in October 2014 (Table 1 and Figure 3). This projection of 171.0 bu/ac is up from
158.1 bu/ac in 2013, the drought affected 2012 low yield of 123.1 bu/ac., and up from the previous record high
of 164.7 bu/ac in 2009.
Based on these 2014 acreage and yield projections, the USDA maintained is earlier January‐February
projection that 2014 U.S. corn production to be a record high 14.216 billion bushels (bb) – down from 14.407
bb in the December USDA reports. The projection of a record high 14.216 bb is up from the previous record
high of 13.829 bb in 2013, 10.755 bb in 2012, 12.360 bb in 2011, 12.447 bb in 2010, and 13.092 bb in 2009
(Table 1 and Figure 4).
U.S. Corn Total Supplies
The USDA projects that total supplies of U.S. corn for “current crop” MY 2014/15 are a record high 15.472
bb – resulting from beginning stocks of 1.232 bb, projected 2014 production of 14.216 bb, and projected
DEC 2015 CME eCorn Futures
Sept. 11, 2014 – March 13, 2015
Close = $4.04 ¾ on 3/13/2015
MAY 2015 CME eCorn Futures
Sept. 11, 2014 – March 13, 2015
Close = $3.80 ½ on 3/13/2015
Page | 4
imports of 25 million bushel (mb) (Table 1 and Figure 4). Total supplies of 15.472 bb in “current crop” MY
2014/15 are comparable to recent year’s amounts of 14.362 bb in MY 2007/08, 13.729 bb in MY 2008/09,
14.774 bb in MY 2009/10 (3rd largest), 14.182 bb in MY 2010/11 (4th largest), 13.517 bb in MY 2011/12, 11.904
bb in “short crop” MY 2012/13, and 14.686 bb in MY 2013/14 (2nd highest).
Beginning stocks of 1.232 bb in “current crop” MY 2014/15 are down marginally (down 4 mb) from the
October‐December USDA WASDE reports. The total of 1.232 bb in beginning stocks in “current crop” MY
2014/15 is up from 821 mb in MY 2013/14, 989 mb in MY 2012/13, and 1.128 bb in MY 2011/12, but less 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 “current crop” MY 2014/15 of 1.232 bb is up considerably from the low of 426 mb that occurred in
MY 1996/97 (Table 1 and Figure 4).
Imports of 25 mb in “current crop” MY 2014/15 are projected to be 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
“current crop” MY 2014/15 is down 50 mb from February, but still up from 5.175 bb in January and from 5.150
bb in the December WASDE report. These adjustments in the USDA projections are due to a) low corn input
prices, b) at least moderate strength in distillers grains co‐product prices, and c) increased projections of 2015
U.S. gasoline consumption released in the past month (Table 1 and Figures 5‐6). This projection of 5.200 bb in
“current crop” MY 2014/15 is up from 5.134 bb in MY 2013/14, 4.641 bb in MY 2012/13, and 5.000 bb in MY
2011/12.
Figure 6 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 4.772‐5.374 bb on a
weekly basis since early September 2014 ‐ the beginning of the “current crop” 2014/15 marketing year. Over
the period of from September 1, 2014 through March 6, 2015, corn usage for ethanol production was been on
pace to reach 5.127 bb in “current crop” MY 2014/15. This estimate of 5.127 bb is 73 mb less than the USDA’s
March 2015 WASDE report estimate of 5.200 bb of corn to be used for ethanol production during “current
crop” MY 2014/15, with 27 of 52 weeks (51.9%) 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 …