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June 18, 2015
Grain Market Outlook
… I‐C. U.S. Wheat Production
U.S. Wheat Planted Acreage
In the March 31, 2015 USDA NASS Prospective Plantings report the USDA projected that 2015 U.S. wheat
total planted acreage would be 55.367 million acres (ma), down 1.455 ma (‐2.6%) from 56.822 ma in 2014,
down 869,000 acres (‐1.5%) from 56.236 ma in 2013, up 294,000 acres (+0.1%) from 55.294 ma in 2012, and
down from 54.277 ma in 2011 (Table 1 and Figures 3 and 4). The USDA has maintained the same assumption
about U.S. wheat planted acreage in the May and June WASDE reports. The USDA National Agricultural
Statistics Service (NASS) will release the annual Acreage report on June 30th in which at lease marginal
changes in the USDA’s projection of 2015 U.S. wheat acreage are likely to occur.
The USDA left unchanged its forecasts that total U.S. winter wheat plantings in 2015 would be 40.751 ma,
down 1.648 ma (‐3.9%) from 42.399 ma in 2014, and down 2.479 ma (‐5.7%) from 43.230 ma in 2013. Of this
total, 29.6 ma were projected to be seeded to Hard Red Winter (HRW) wheat in 2015, down approximately
4% from 30.47 ma in 2014, and down marginally from 29.67 ma in 2013. Soft Red Winter (SRW) wheat
planted acreage was projected to be 7.75 ma, down 8.8% from 8.50 ma in 2014, and down 22.8% from 10.04
ma in 2013. White Winter (WW) wheat acres of 3.433 ma in 2015 are essentially equal to the previous year.
The USDA projected that total U.S. other spring wheat plantings in 2015 would be 12.969 ma, down
56,000 acres (‐0.4%) from 13.025 ma in 2014, but up 1.363 ma (+11.7%) from 11.606 ma in 2013. Of this total,
12.1 ma are Hard Red Spring (HRS) wheat, down from 12.25 ma in 2014, but up from 10.94 ma in 2013.
Durum wheat plantings in the U.S. in 2015 was projected by the USDA to be 1.647 ma in 2015, up 249,000
acres (+17.8%) from 1.398 ma in 2014, and up 247,000 acres (+17.6%) from 1.400 ma in 2013.
U.S. Wheat Harvested Acreage
In the June 10th USDA WASDE report the USDA left unchanged its previous May 12th WASDE projections of
U.S. wheat harvested acreage in 2015 that were based on 10 year harvested‐to‐planted ratios by state.
Aggregated total U.S. percent harvested‐to‐planted acreage in the U.S. was estimated to be 86.7% in 2015, up
from 81.6% in 2014, 80.6% in 2013, and comparable to the range of 76.0%‐89.1% (average = 84.1%, median =
84.4%) over the 2000‐2014 period (Table 1 and Figure 4). The proportion of harvested‐to‐planted U.S. wheat
acreage in 2013 of 80.6% was the lowest since 81.6% in 2006 and 76.0% in 2002.
The USDA projected that 2015 U.S. wheat total harvested acreage would be approximately 47.977 million
acres (ma), up 1.596 ma (+3.4%) from 46.381 ma in 2014, up 2.645 ma (+5.8%) from 45.332 ma in 2013, down
781,000 acres (‐1.6%) from 48.758 ma in 2012, and up from 45.687 ma in 2011 (Table 1 and Figure 4). The
USDA also left unchanged its forecast that total U.S. winter wheat harvested acres in 2015 would be 33.838
ma, up 1.534 ma (+4.7%) from 32.304 ma in 2014, and up 1.188 ma (+3.6%) from 32.650 ma in 2013.
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U.S. Wheat Yields & Production
The USDA projected that 2015 U.S. average wheat yields would be 44.2 bushels per acre (bu/ac) – up from
43.5 bu/ac in May, and reflecting improved Hard Red Winter wheat prospects in the Central Plains due to
recent rains and cool weather (in spite of accompanying lodging and disease problems). This projection of
2015 U.S. wheat yields of 44.2 bu/ac is up from 43.7 bu/ac in 2014, the record high of 47.1 bu/ac in 2013, the
previous record of 46.2 bu/ac in 2012, 43.6 bu/ac in 2011, and 46.1 bu/ac in 2010 (Table 1 and Figure 5).
Based on this combination of projections for 2015 planted acreage (55.367 ma), harvested acreage (47.977
ma), and yield (44.2 bu/ac), 2015 U.S. wheat production would be 2.121 billion bushels (bb). This projection of
2015 U.S. wheat production of 2.121 bb is up 34 mb from May, up from 2.026 bb in 2014, and within the 2004‐
2014 range of 1.808‐2.512 bb (average = 2.128 bb, median = 2.135 bb) (Table 1 and Figure 6).
I‐D. U.S. Wheat Total Supplies
Total supplies of U.S. wheat of 2.973 bb are projected by the USDA for “new crop” MY 2015/16 (up 36 mb
from May), resulting from beginning stocks of 712 mb, projected 2015 production of 2.121 bb, and projected
imports of 140 mb (Table 1 and Figure 6). Over the last ten (10) marketing years, U.S. wheat total supplies
have been 2.501 bb in MY 2006/07, 2.620 bb in MY 2007/08, 2.945 bb in MY 2008/09, 2.984 bb in MY
2009/10, 3.236 bb in MY 2010/11, 2.968 bb in MY 2011/12, 3.118 bb in MY 2012/13, 3.021 bb in MY 2013/14,
2.764 bb in MY 2014/15, and now are projected to be 2.973 bb in “new crop” MY 2015/16.
Forecast U.S. wheat beginning stocks of 712 mb in “new crop” MY 2015/16 are up 3 mb from May, up
20.7% from 590 mb in beginning stocks in MY 2014/15, and down marginally from 718 mb in MY 2013/14.
This projection of 712 mb in beginning stocks in “new crop” MY 2015/16 is more than double the long term
historic low of 306 mb in MY 2008/09 – which resulted from the historically tight U.S. wheat ending stocks
situation that occurred in MY 2007/08.
Projected U.S. wheat imports of 140 mb for “new crop” MY 2015/16 would be the third highest amount on
record, less than 148 mb in MY 2014/15 (down 2 mb), and the record high of 169 mb in MY 2013/14. Since MY
1973/74 and prior to MY 2013/14, the next highest amounts of U.S. wheat imports have been: 1) 127 mb in
MY 2008/09; 2) 123 mb in MY 2012/13; 3) 122 mb in MY 2006/07; and 4) 119 mb in MY 2009/10.
Nearly all of U.S. wheat imports come from Canada because of favorable geographic location and
associated grain transportation logistics. Large Canadian wheat supplies over the last several years have been
a major factor in this increase in U.S. wheat imports. Canada produced a record large wheat crop of 37.5
million metric tons (mmt) (or 1.378 bb in 60 lb/bu units) in MY 2013/14, followed by a crop of 29.5 mmt (1.085
bb) in MY 2014/15, with a projection of 29.0 mmt (1.066 bb) in “new crop” MY 2015/16. The next largest
Canadian wheat crops since 1960 that were over 30.0 mmt were in 1990 (32.1 mmt), 1991 (32.0 mmt), and
1986 (31.4 mmt).
I‐E. U.S. Wheat Total Use & Use by Category
Food Use: Projected U.S. wheat food use of 967 mb in “new crop” MY 2015/16 has been trending
consistently higher over time due to a) steady growth in the U.S. population, and b) associated increases in
demand for processed wheat products. This projected amount of 967 mb in food use in “new crop” MY
2015/16 continues the steady upward trend following from 960 mb in MY 2014/15, 955 mb in MY 2013/14,
and from 951 mb in MY 2012/13 (Table 1 and Figure 7).
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Seed Use: Forecast seed use of 72 mb in “new crop” MY 2015/16 is down marginally from 77 mb in MY
2014/15, and compares to 77 mb in MY 2013/14, and 73 mb in MY 2012/13 (Table 1 and Figure 7). The
USDA’s forecast U.S. wheat seed use extends the historic pattern of there being a relatively small but inelastic
demand for U.S. wheat seed, driven primarily by a) the amount of U.S. wheat seed needed to plant adequate
U.S. wheat acreage each year (from both commercial and on‐farm seed sources), and b) the need for adequate
wheat seed stocks to cover possible U.S. seed wheat production shortfalls from year to year.
Exports: Projected U.S. wheat exports of 925 mb in “new crop” MY 2015/16 are up from 855 mb in MY
2014/15 (down 5 mb from May) – the lowest amount since 879 mb in MY 2010/11 (Table 1 and Figure 7).
Over the last ten (10) marketing years, the U.S. has exported 908 mb of wheat in MY 2006/07, 1.263 bb in MY
2007/08, 1.015 bb in MY 2008/09, 879 mb in MY 2009/10, 1.291 bb in MY 2010/11, 1.051 bb in MY 2011/12,
1.012 bb in MY 2012/13, 1.176 bb in MY 2013/14, and 855 mb in MY 2014/15, with a projection of 925 mb in
“new crop” MY 2015/16.
Some of the factors that have caused lower U.S. wheat exports in MY 2014/15 are a) the sharp increase in
the value of the U.S. dollar relative to other World currencies, and b) prospects for fully adequate competitive
foreign wheat supplies for export trade purposes. That said, the uncertain impact on World wheat trade in the
future from ongoing geopolitical conflicts (between Russian and Ukraine), and the potential for dry or adverse
weather conditions in other major World wheat production areas due to the likelihood of an “El Nino” weather
pattern in the coming year are both factors that may eventually support increased U.S. wheat exports and at
least somewhat higher World wheat prices in the “new crop” 2015/16 marketing year.
Cumulative U.S. wheat export shipments through June 4th – the 1st week of the “new crop” 2015/16
marketing year for U.S. wheat – totaled 3.39 mb, which is 0.4% of the USDA’s projected MY 2015/16 exports of
925 mb, with 1.9% (1 of 52 weeks) of the marketing year completed. The 2015/16 marketing year began on
June 1, 2015 and will last through May 31, 2016. United States’ wheat export shipments will need to average
18.1 mb per week through the remainder of the “new crop” 2015/16 marketing year to attain the USDA’s June
10th WASDE projection of 925 mb. Wheat export shipments by the U.S. of 4.8 mb during the week ending June
4th were “behind pace” to meet the USDA forecast of 925 mb in the “new crop” 2015/16 marketing year.
(Source: USDA Foreign Agricultural Service U.S. Weekly Export Sales report ‐ http://apps.fas.usda.gov/export‐
sales/esrd1.html).
In addition, when accounting for unshipped forward sales of exports of 170.5 mb in U.S. wheat for “new
crop” MY 2015/16 (i.e., that had not yet been shipped as of June 4th), total U.S. wheat shipped plus
outstanding shipments added up to 173.9 mb (i.e., 3.4 mb shipped plus 170.5 mb forward sales). This amounts
to 18.8% of the USDA’s projection of 925 mb for “new crop” MY 2015/16 with 1.9% of the marketing year
having already occurred (i.e., 1 of 52 weeks).
Feed & Residual Use: The USDA projected that U.S. feed and residual use would be 195 mb in “new crop”
MY 2015/16 (up 15 mb from May), and up from 160 mb for MY 2014/15, down from 223 mb in MY 2013/14,
and down from the recent high of 364 mb in MY 2012/13 (Table 1 and Figure 7). Domestic U.S. wheat feeding
has trended lower in MY 2014/15 and “new crop” MY 2015/16 due to sizable 2013 and 2014 U.S. corn and
grain sorghum crops – which has led to more abundant competitive U.S. feedgrain supplies for domestic
livestock feeding at lower market …
September 1, 2015
Grain Market Outlook
(31.0% S/U)
are also record high, and up from 209.7 mmt (29.6% S/U) in “old crop” MY 2014/15, and from 193.4 mmt
(27.7% S/U) in MY 2013/14. For perspective, these recent supply‐demand figures can be compared to the
historic World wheat ending stocks and stocks‐to‐use minimums of 128.8 mmt and 21.0% S/U in MY 2007/08.
Page | 2
I. U.S. Wheat Market Situation & Outlook
I‐A. August 12th USDA Reports & “New Crop” MY 2015/16 Projections
On August 12th the USDA National Agricultural Statistics Service (NASS) in its Crop Production report with
its’ projections of 2015 U.S. wheat production as of August 1, 2015. Wheat production forecasts in the August
12th Crop Production report were based on actual farm operator surveys and objective yield field trials
conducted between July 25th and August 6th by USDA NASS – representing crop conditions and expected yield
and production prospects as of August 1, 2015.
On the same day the USDA World Agricultural Outlook Board (WAOB) released its August 2015 World
Agricultural Supply and Demand Estimates (WASDE) report – containing U.S. and World wheat 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 June 1, 2015 and will last
through May 31, 2016.
I‐B. CME KC Hard Red Winter Wheat Futures & U.S. Dollar Index Trends
Since market highs of $6.28 ¾ per bushel for the CME DECEMBER 2015 Kansas hard red winter wheat
futures contract occurred on June 30, 2015, December futures have trended sharply lower – down to a low of
$4.78 ¼ on August 31, 2015 (Figure 1). The slow pace of U.S. wheat exports caused by record large World
wheat production prospects in “new crop” MY 2015/16 and the historically high value of the U.S. dollar have
been key factors causing the recent sharp decline in CME DECEMBER 2015 Kansas HRW wheat prices.
Figure 1. DECEMBER 2015 & JULY 2016 CME Kansas Wheat Futures Price Charts …
January 1, 2006
Management
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May 3, 2016
Grain Market Outlook
ve prospects for grain sorghum prices and
profitability (in areas of the U.S. not impacted by drought!). Second, total use of U.S. grain sorghum has been
relatively high in “current crop” MY 2015/16 as low sorghum prices have helped domestic U.S. feedgrain‐using
industries to lower their input costs and to improve their profitability (if not limit their financial losses).
Over time the combination of both a) lower production in response to low profits and/or crop production
problems, and b) increased grain sorghum use supported by low grain prices for livestock feed, exports and
grain processing use, are likely to work together to bring about a change in the current prevailing “large crop –
low price” market scenario in U.S./World coarse grain markets.
Given current market information, it seems fair to judge that absent any change in this projected “large supply
/ low price” scenario, U.S. grain sorghum cash prices are unlikely to rise very far from current levels (which are
in the $3.00‐$3.40 per bushel in much of Kansas). Major concerns about U.S. and/or foreign feedgrain crop
production prospects will be required for U.S. grain sorghum prices to move up to $4.00‐$4.50+ during late
spring‐summer 2016.
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USDA Estimate for “Current Crop” MY 2015/16: The USDA made several changes in its projected U.S. grain
sorghum supply‐demand balance sheet for “current crop” MY 2015/16. While 2015 U.S. sorghum production
of 597 mb, total supplies of 620 mb, and total use of 555 mb are unchanged, adjustments were made in
several usage categories. Food, alcohol and industrial use is projected at 124 mb – up 25 mb from March, and
offsetting decreases in exports (315 mb – down 10 mb), and feed and residual use (115 mb – down 15 mb).
Ending stocks are forecast at 65 mb (11.71% S/U) – up from 18 mb (4.0% S/U) in “old crop” MY 2014/15, and
34 mb (9.1% S/U) in MY 2013/14. The forecast of U.S. grain sorghum average cash prices is lowered to the
range of $3.10‐$3.30 /bu. ($3.20 midpoint – down $0.10) in “current crop” MY 2015/16, versus $4.03 in “old
crop” MY 2014/15, $4.28 in MY 2013/14, and $6.33 (record high) in MY 2012/13.
USDA Forecast for “Next Crop” MY 2016/17: On December 14, 2015 the USDA released preliminary estimates
of its USDA Agricultural Outlook Forum projections on February 25‐26, 2016. The March 31st Prospective
Plantings report provided an updated forecast of 2016 U.S. sorghum planted acreage. These KSU‐adjusted
USDA forecasts for “next crop” MY 2016/17 account for updated grain sorghum planted acreage estimates
and associated production and stocks adjustments.
The USDA projected 2016 U.S. grain sorghum plantings of 7.216 million acres (ma) – down 1.243 ma or 14.7%
from 2015. Forecast 2016 harvested acres of 6.046 ma would be down 1.805 ma or 23.0% vs 2015. With
projected yields of 65.1 bu/ac, 2016 U.S. grain sorghum production is forecast to be 394 mb – down sharply
from 597 mb in 2015, but comparable to 433 mb in 2013, and 392 mb in 2012. With forecast “next crop” MY
2016/17 total use of 415 mb (down from 555 mb in “current crop” MY 2015/16), and projected ending stocks
of 44 mb (10.6% S/U), U.S. sorghum prices are projected by the USDA to be $3.40 /bu – down $0.05 from the
USDA corn price projection of $3.45 /bu for “next crop” MY 2016/17, but up from the $3.20 /bu midpoint
estimate for U.S. grain sorghum “current” MY 2015/16. By KSU estimates, this scenario has a 50% likelihood
of occurring in “next crop” MY 2016/17.
KSU Forecast for “Next Crop” MY 2016/17: Two alternative KSU‐Scenarios for U.S. grain sorghum supply‐
demand and prices are presented for “next crop” MY 2016/17, with both assuming a 216,000 acre downward
adjustment in 2016 U.S. grain sorghum planted area from the USDA’s March 31st Prospective Plantings report:
A) “Normal Crop” KSU‐Scenario A (Lower Acres & Trend Yield) (40% probability) assumes for “next crop” MY
2016/17: 7.000 ma planted, 5.865 ma harvested, 67.3 bu/ac yield, 395 mb production, 460 mb total supplies,
385 mb total use, 75 mb ending stocks, 19.5% S/U, & $3.15 /bu U.S. grain sorghum average price; and B)
“Short Crop” KSU‐Scenario B (Lower Acres & Low Yield) (10% probability) assumes for “next crop” MY
2016/17: 7.000 ma planted, 5.865 ma harvested, 55.0 bu/ac yield, 323 mb production, 388 mb total supplies,
341 mb total use, 47 mb ending stocks, 13.8% S/U, & $4.70 /bu U.S. grain sorghum average price.
Potential KSU 2016 U.S. Sorghum and Corn “Short Crop” Scenario – 12.600 Billion Bu U.S. Corn Crop: If
significant corn production problems were to occur in the U.S. in the summer of 2016 resulting in
approximately a 12.607 bb corn (150.0 bu/ac yield on 84.044 ma harvested), then all else being equal, ending
stocks of U.S. corn for “next crop” MY 2016/17 could decline to 1.137 bb (8.5% S/U), with U.S. corn prices likely
to increase to $4.50‐$5.50 per bushel. Grain sorghum prices in the U.S. would likely in the $4.25 to $5.25 per
bushel range for “next crop” MY 2016/17. At this time by KSU estimates there is a 10% likelihood of this
occurring – similar to “short crop” KSU Scenario B above.
World Coarse Grains Supply‐Demand: World total supplies of 1,505.0 million metric tons (mmt) are projected
for “current” MY 2015/16, down marginally from 1,514.8 mmt in “old crop” MY 2014/15, but up from 1,443.9
mmt in MY 2013/14. Projected World coarse grain ending stocks of 245.1 mmt (19.5% S/U) in “current crop”
MY 2015/16 are up marginally from 243.7 mmt (19.2% S/U) in “old crop” MY 2014/15, and from 211.4 mmt
(17.1% S/U) in MY 2013/14.
Page | 3
I. U.S. Grain Sorghum Market Situation and Outlook
I‐A. April 12th WASDE & March 31st Prospective Plantings & Stocks Reports
On April 12th the USDA World Agricultural Outlook Board (WAOB) released its April 2016 World
Agricultural Supply and Demand Estimates (WASDE) report – containing U.S. grain sorghum and World coarse
grain supply‐demand and price projections for the 2013/14, “old crop” 2014/15, as well as the “current”
2015/16 marketing years. The “current” 2015/16 marketing year for U.S. grain sorghum began on 9/1/2015
and will last through 8/31/2016. The March 9th and April 12th USDA WASDE reports followed earlier U.S. corn
and grain sorghum supply‐demand and price projections for the “next crop” 2016/17 marketing year (i.e., MY
2016/17) provided by the USDA on December 14, 2015 in preparation for the 2016 Agricultural Outlook
Forum in Arlington, Virginia on February 25‐26, 2016.
Prior to the April 12th USDA WASDE report, on March 31st the USDA National Agricultural Statistics
Service (NASS) released its 2016 Prospective Plantings and March 1st Quarterly Grain Stocks reports. The
USDA used information from the Quarterly Grain Stocks report to make adjustments in the U.S. grain sorghum
supply‐demand balance sheet. Information from the 2016 Prospective Plantings report has been used in this
report to update the USDA’s grain sorghum production and supply‐demand projections for to provide KSU‐
adjusted USDA projections “next crop” MY 2016/17. These adjustments anticipate what the USDA is likely to
do if it follows it’s usual practice in the upcoming May 10th USDA WASDE report in releasing its own updated
U.S. grain sorghum supply‐demand and price projections for “next crop” MY 2016/17.
I‐B. Kansas Grain Sorghum Seasonal Average Price Trends
Seasonal average price index trends for Kansas grain sorghum over the last 15 years indicate definite
seasonal price patterns (Figure 2). In the “current” 2015/16 marketing year for U.S. grain sorghum, price
movements from month‐to‐month have been inconsistent with historic seasonal price patterns that have
occurred over the previous fifteen grain sorghum marketing years in Kansas. Sorghum prices in the U.S. have
declined on a month‐to‐month basis from the beginning of “current crop” MY 2015/16 in September 2015
through February 2016. After a marginal recovery higher in March 2016, prices in April fell to new marketing
year lows, but are projected to trend higher from May through August.
Since MY 1999/2000 Kansas grain sorghum prices have typically been weakest during the harvest month of
October, with an average seasonal price index of 93.3% of the unweighted average Kansas sorghum price for
the September‐August marketing year. Kansas cash grain sorghum prices have then on average trended
consistently higher from November harvest lows through the spring months of March‐April‐May – up to highs
in the range of 104.0%‐104.4% of the marketing year average price. Kansas grain sorghum prices have then
tended to decline moderately in the month of June, and then to trend lower during July‐August. The most
variability has occurred at the beginning of harvest (September) and ending quarter (June‐July‐August) of the
last fifteen (15) September‐August U.S. sorghum marketing years.
Page | 4
Figure 2. Kansas Grain Sorghum Seasonal Price Index: MY 1999/00 – “Old Crop” MY 2014/15 plus
USDA Estimates for “Current Crop” MY 2015/16 (Sources: www.AgManager.info & USDA ERS)
I‐C. U.S. Grain Sorghum Supply‐Demand
U.S. Grain Sorghum Acreage, Yield & Production
Table 1 shows the USDA U.S. grain sorghum supply‐demand balance sheet for the MY 2009/10 through
“current crop” MY 2015/16 period, with KSU‐adjusted USDA projections and KSU forecasts for “next crop” MY
2016/17. Grain sorghum planted and harvested planted acreage in the U.S. for the 2000 – 2016 period are
shown in Figure 2, with U.S. grain sorghum yields for 1973 through 2016 are shown in Figure 3. United States’
grain sorghum total supplies for the 2000/01 through projected 2016/17 marketing years are shown in Figure
4. Table 1 and Figures 2‐4 show the growth in U.S. grain sorghum production and total supplies since the
drought‐impacted year of MY 2012/13 through “current crop” MY 2015/16, and the USDA forecast of smaller
U.S. grain sorghum acreage, production and total supplies in “next crop” MY 2016/17.
U.S. Grain Sorghum Acres
In its March 31st Prospective Plantings report, the USDA projected that in 2016 U.S. grain sorghum planted
area will equal 7.216 million acres or ‘ma’, compared to 8.459 ma in 2015, 7.138 ma in 2014, 8.076 ma in 2013,
and 6.401 ma in 2012 (Table 1 and Figure 2). Using a historic average (2000‐2015) U.S. harvested‐to‐planted
acreage of 83.79%, 2016 U.S. grain sorghum harvested acreage is projected at 6.046 ma, compared to 7.851
ma in 2015, 6.401 ma in 2014, and 6.401 ma in 2013 (Table 1 and Figure 2). This KSU‐adjusted USDA crop
acreage scenario is given a 50% likelihood of occurring by KSU estimates.
For both the “normal crop” A and “short crop” B KSU Scenario projections, 2016 U.S. grain sorghum
planted acres are projected to be 7.000 ma, down 216,000 acres from the March 31st USDA projection, while
2016 U.S. sorghum harvested acres are forecast to be 5.865 ma – down 181,000 acres versus the KSU‐adjusted
94.1 …
September 28, 2017
Grain Market Outlook
… 3.15%
U.S. Grain Sorghum Avg. Farm
Price ($/bushel)
$2.50‐$3.30
$2.90
U.S. Corn$ =
**$3.20/bu
$3.05
$3.00
$3.20
Page | 12
“crowded out” available supplies for bioenergy and other industrial production uses. This category includes
grain sorghum used for ethanol production under the designation of “alcohol”.
KSU projections of U.S. grain use for Food, Alcohol and Industrial Production in “new crop” MY 2017/18
range from 95 to 105 mb – similar to the USDA projection of 99 mb (Table 1a). This variation is in accord with
changes in available U.S. grain sorghum supply, with less supply leading to lower use and conversely.
Figure 5. Trends in U.S. Grain Sorghum Use & Ending Stocks: MY 2004/05 ‐ “New Crop” MY 2017/18
as of the September 12, 2017 USDA Crop Production and WASDE reports
Monthly U.S. Ethanol Production Use of Grain Sorghum: During the MY 2015/16 marketing year at least
133.6 mb of grain sorghum had been consumed for alcohol production in the United States, and possibly as
much as 141 mb (the USDA FAI estimate for grain sorghum from the December 9th WASDE report). This is
according to KSU estimates derived from the monthly USDA NASS Grain Crushings and Co‐Product Production
Report (https://www.nass.usda.gov/Surveys/Guide_to_NASS …
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Livestock Feed
Ethanol
DDGS Feed
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June 14, 2018
Grain Market Outlook
… The USDA released their wheat production, supply‐demand and price projections for the U.S. for “new
crop” MY 2017/18 in the June 12th Crop Production & WASDE reports (Tables 1a‐b).
U.S. wheat plantings are forecast to be 47.339 million acres (ma) in 2018, up from the record low of 46.012
ma in 2017, but down from 50.119 ma in 2016 (Table 1, Figure 5). Harvested acres are forecast at 38.9 ma in
2018 (82.3% harvested‐to‐planted), up from the record low of 37.586 ma (81.7% harvested‐to‐planted) in
2017, but down from 43.850 ma in 2016 (87.5% harvested‐to‐planted) (Table 1, Figure 5). The 2018 U.S.
average wheat yield is estimated at 46.9 bu/ac, up from 46.3 bu/ac in 2017, but down from the 2016 record
high of 52.7 bu/acre (Table 1, Figure 6).
Wheat production in the U.S. in 2018 is forecast to be 1.827 billion bushels (bb), up from 1.741 bb in 2017,
but down from 2.309 bb in 2016. Projected “new crop” MY 2018/19 total supplies are forecast at 3.043 bb,
down from 3.076 bb in “old crop” MY 2017/18, and down from 3.402 bb in MY 2016/17 (Table 1, Figure 7).
U.S. Wheat total use of 2.097 bb is forecast for “new crop” MY 2018/19, up from 1.996 bb in “old crop” MY
2017/18, and from 2.222 bb in MY 2016/17 (Table 1, Figure 8). By usage category, U.S. wheat exports are
Page | 4
projected to be 950 mb in “new crop” MY 2018/19, up from 900 mb in “old crop” MY 2017/18, while being
down from 1.055 bb in MY 2016/17 (Table 1, Figures 9 & 10).
CommentaryKSU: U.S. wheat exports fell to 47 year lows of 778 mb and 864 mb in MY 2015/16 and MY
2014/15, respectively, to levels just marginally above those pre‐“Russian Grain Deal” in 1972. This is more
evidence of the only marginally competitive position that U.S. wheat exports find themselves in among foreign
export competitors I recent years.
Food Use of U.S. wheat is projected to be 965 million bushels (mb) in “new crop” MY 2018/19, up
marginally from 963 mb in “old crop” MY 2017/18, and trending higher from 943 mb in MY 2016/17 (Table 1,
Figure 8). Feed & Residual Use of U.S. wheat is projected to be 120 mb in “new crop” MY 2018/19, up from 70
mb in “old crop” MY 2017/18, and from 156 mb in MY 2016/17 (Table 1, Figure 8). CommentaryKSU: With the
USDA’s forecast of tighter U.S. corn and total feedgrain supplies along with higher feedgrain prices, the USDA is
anticipating that feeding wheat to livestock will become more economically viable.
The USDA projected “new crop” MY 2018/19 ending stocks to be 946 mb (45.1% Stocks/Use), down from
1.080 bb in “old crop” MY 2017/18 (54.1% stocks/use), and 1.181 bb in MY 2016/17 (53.15% stocks/use)
(Table 1, Figures 11 & 12). CommentaryKSU: The anticipation of markedly lower U.S. 2018 HRW wheat
production is having the end effect on U.S. wheat supply‐demand balances of dropping ending stocks below
1.00 bb and ending stocks‐to‐use below 50%. To move ending stocks and % stocks‐to‐use much lower, it may be
necessary to sharply increase U.S. wheat exports and total usage.
United States’ wheat prices are projected to average $5.10 /bu in “new crop” MY 2018/19, up from $4.75
/bu in “old crop” MY 2017/18, from $3.89 in MY 2016/17, and $4.89 /bu in MY 2015/16, but still down from
$5.99 /bu in MY 2014/15 (Table 1, Figures 11 & 12). It is estimated by KSU that these USDA projections for
“new crop” MY 2018/19 have a 60% probability of occurring.
F. Three Alternative KSU U.S. Wheat S/D Forecast for “New Crop” MY 2018/19 …
October 1, 2015
USDA METSS Project