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June 15, 2015
Grain Market Outlook
& “New Crop” MY 2015/16 Projections
On June 10th the USDA World Agricultural Outlook Board (WAOB) released its June 2015 World
Agricultural Supply and Demand Estimates (WASDE) report – containing U.S. and World corn supply‐demand
and price projections for the 2013/14, “current” 2014/15, as well as the “new crop” 2015/16 marketing years.
The 2014/15 marketing year will end on August 31, 2015, while the “new crop” 2015/16 U.S. corn marketing
year will begin on September 1, 2015 and will last through August 31, 2016.
In the June 10th WASDE report the USDA released projections for the “new crop” 2015/16 marketing year
for corn, grain sorghum, wheat, soybeans and other major crops. Projections of 2015 crop size for corn are
based on WAOB estimates of crop acreage and yields. However, the first projection of 2015 U.S. corn
production by the USDA National Agricultural Statistics Service (NASS) that will be based on actual farmer
surveys and field trials will be in the August 12, 2015 Crop Production and WASDE reports.
I‐B. Corn Futures Trends for the December 2014‐May 2015 Period
The CME JULY 2015 corn contract is now the “lead” corn futures contract, representing current grain
market price prospects through late June 2015, when the CME SEPTEMBER 2015 corn contract will assume
market leadership. Local basis adjustments are currently being made off JULY 2015 corn futures for spot cash
corn and grain sorghum price bids in North America as well as other World grain markets. The “current crop”
JULY 2015 corn futures market contract initially responded in a “negative” manner to the information in the
June 10th USDA reports, and in the days afterward trended “lower”.
On the day of the report – Wednesday, June 10th – Chicago Mercantile Exchange (CME) JULY 2015 corn
futures prices opened at $3.64 ¾ per bushel, and traded in a range of $3.56 ¾ ‐ $3.66 ½ during the session,
before settling at $3. 57 ¼ – down $0.07 ¾ for the day (Figure 1). 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. Since then,
JULY 2015 Corn has traded from a high of $3.60 on Thursday, June 11th to a low of $3.52 ¼ on Friday, June 12th
before closing at $3.53 on that same day.
The CME DECEMBER 2015 corn contract is now the lead “new crop” corn futures contract, representing
U.S. corn market price prospects for the mid‐October through late‐November 2015 time period. DEC 2015 is
the futures contract which local basis adjustments are made off of for “fall harvest 2015” corn and grain
sorghum forward contract price bids or hedges. The “new crop” DECEMBER 2015 corn futures market
contract also initially responded “negatively” to the information in the June 10th USDA reports, and since then
has trended “sideways”.
On the day of the report CME DECEMBER 2015 corn futures prices opened at $3.82 per bushel, trading
within the range of $3.74 ¾ ‐ $3.84 ½ during the session, before settling at $3.75 ¼ – down $0.07 ¾ per bushel
for the day (Figure 1). Since then, DECEMBER 2015 corn futures prices have traded from a high of $3.84 ¼ on
Thursday, June 12th to a low or $3.74 ¾ on Friday, June 12th before closing at $3.75 ¼ that same day.
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Figure 1. JULY 2015 and DECEMBER 2015 CME Corn Futures Price Charts (electronic trade) …
October 27, 2015
Grain Market Outlook
014/15, and 1,129.3 mmt in MY 2013/14.
Projected World corn ending stocks of 187.8 mmt (19.2% S/U) in “new crop” MY 2015/16 are down from 196.0
mmt (19.8% S/U) in “old crop” MY 2014/15, but up from 175.9 mmt (18.4% S/U) in MY 2013/14.
Page | 2
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.
Page | 3
Figure 1. DECEMBER 2015 & MAY 2016 CME Corn Futures Price Charts …
July 21, 2015
Grain Market Outlook
2015/16 Projections
On July 10th the USDA World Agricultural Outlook Board (WAOB) released its July 2015 World Agricultural
Supply and Demand Estimates (WASDE) report – containing U.S. and World corn supply‐demand and price
projections for the 2013/14, “current” 2014/15, as well as the “new crop” 2015/16 marketing years. The
2014/15 marketing year will end on August 31, 2015, while the “new crop” 2015/16 U.S. corn marketing year
will begin on September 1, 2015 and will last through August 31, 2016.
In the July 10th WASDE report the USDA released projections for the “new crop” 2015/16 marketing year
for corn, grain sorghum, wheat, soybeans and other major crops. Projections of 2015 crop size for corn are
based on WAOB estimates of crop acreage and yields. However, the first projection of 2015 U.S. corn
production by the USDA National Agricultural Statistics Service (NASS) that will be based on actual farmer
surveys and field trials will be in the August 12, 2015 Crop Production and WASDE reports.
I‐B. Corn Futures Trends for the December 2014 – mid‐July 2015 Period
The CME SEPTEMBER 2015 corn contract is now the “lead” corn futures contract, representing current
grain market price prospects through late August 2015, when the CME DECEMBER 2015 corn contract will
then assume the lead contract role in the market. Local basis adjustments are currently being made off
SEPTEMBER 2015 corn futures for spot cash corn and grain sorghum price bids in North America as well as
other World grain markets. The “current crop” SEPTEMBER 2015 corn futures market contract initially
responded in a “positive” manner to the information in the July 10th USDA reports, and in the days afterward
trended first higher then back lower.
On the day of the report – Friday, July 10th – Chicago Mercantile Exchange (CME) SEPTEMBER 2015 corn
futures prices opened at $4.28 per bushel, and traded in a range of $4.24 ¼ ‐ $4.39 ½ during the session,
before settling at $4.34 ¾ – UP $0.06 for the day (Figure 1). 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. Since then,
SEPTEMBER 2015 Corn has traded from a high of $4.43 ¼ on Tuesday, July 14th to a low of $4.04 ½ on Monday,
July 20th before closing at $4.05 on that same day.
The CME DECEMBER 2015 corn contract is now the lead “new crop” corn futures contract, representing
U.S. corn market price prospects for the mid‐October through late‐November 2015 time period. DEC 2015 is
the futures contract which local basis adjustments are made off of for “fall harvest 2015” corn and grain
sorghum forward contract price bids or hedges here in the United States. The “new crop” DECEMBER 2015
corn futures market contract also initially responded “positively” to the information in the July 10th USDA
reports, and since then has trended first higher and then downward.
On the day of the report CME DECEMBER 2015 corn futures prices opened at $4.38 ¼ per bushel, trading
within the range of $4.34 ¼ ‐ $4.49 during the session, before settling at $4.45 – up $0.06 per bushel for the
day (Figure 1). Since then, DECEMBER 2015 Corn has traded from a high of $4.54 ¼ on Tuesday, July 14th to a
low of $4.15 ¼ on Monday, July 20th before closing at $4.16 on that same day.
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Figure 1. SEPTEMBER 2015 & DECEMBER 2016 CME Corn Futures Price Charts (electronic trade) …
May 3, 2016
Grain Market Outlook
13.78%
U.S. Grain Sorghum Avg.
Farm Price ($/bushel)
$3.22
U.S. Corn$ =
$3.55/bu
$5.02
U.S. Corn$ =
$5.18/bu
$5.99
U.S. Corn$ =
$6.22/bu
$6.33
U.S. Corn$ =
$6.89/bu
$4.28
U.S. Corn$ =
$4.46/bu
$4.03
U.S. Corn$ =
$3.70/bu
$3.10‐$3.30
$3.20
U.S. Corn$ =
$3.55/bu
$3.40
USDA
U.S. Corn$ =
$3.45/bu
$3.15
KSU
U.S. Corn$ =
$3.20/bu
$4.70
KSU
U.S. Corn$ =
$4.75/bu
Page | 8
U.S. Grain Sorghum Total Supplies
The KSU‐adjusted USDA estimate of total supplies of U.S. grain sorghum for “next crop” MY 2016/17
equals 459 mb – resulting from beginning stocks of 65 mb, projected 2016 production of 394 mb, and
negligible imports (0 bu) (Table 1 and Figure 4). Total U.S. grain sorghum supplies of 475 mb in “next crop” MY
2016/17 would be down from what would be the 17‐year high of 620 mb in “current crop” MY 2015/16, and
down from 467 mb in “old crop” MY 2014/15, but up from 408 mb in MY 2013/14. This KSU‐adjusted USDA
grain sorghum total supply scenario is given a 50% likelihood of occurring according to KSU estimates.
The “normal crop” Scenario A KSU projection for U.S. grain sorghum total supplies in “next crop” MY
2016/17 equals 460 mb – essentially equal to the KSU‐adjusted USDA projection. The likelihood of this
“normal crop” Scenario A KSU grain sorghum trend line yield / production / total supply scenario of 460 mb is
40% according to KSU estimates, with an additional 10% probability of a “short crop” Scenario B KSU forecast
of 2016 U.S. grain sorghum total supply outcome of 388 mb (Table 1).
Beginning stocks of 65 mb in “next crop” MY 2016/17 are projected to be up sharply from 18 mb in
“current crop” MY 2015/16, and from 34 mb in “old crop” MY 2014/15. Imports of grain sorghum into the U.S.
in “next crop” MY 2016/17 are projected to be essentially “zero”, down from 5 mb in “current crop” MY
2015/16, and similar to 380,000 bu (i.e., 0.38 mb) in “old crop” MY 2014/15.
U.S. Grain Sorghum Use by Category & Total Use
U.S. Food, Alcohol and Industrial Usage (FAI)
Projected U.S. grain sorghum food, alcohol, and industrial usage of approximately 99 mb in “next crop” MY
2016/17 by the USDA is down from approximately 124 mb from “current crop” MY 2015/16 (up 25 mb from
March), but up from what would be the 29‐year low of 14 mb in “old crop” MY 2014/15, 69 mb in MY 2013/14,
and the range of 84‐94 mb during the period of MY 2008/09 through MY 2002/03 (Table 1 and Figures 5‐6).
This category includes grain sorghum used for ethanol production under the designation of “alcohol”. The
“normal crop” Scenario A KSU projection for FAI use in “next crop” MY 2016/17 is 109 mb – up 10 mb from
USDA (40% probability), with a “short crop” Scenario B KSU forecast of 95 mb (10% probability).
Monthly U.S. Ethanol Production Use of Grain Sorghum: Over the September 2015 through March 2016
period (i.e., the first 7 months of the “current crop” 2015/16 marketing year) at least 82 mb of grain sorghum
have been consumed for alcohol production in the United States. 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 …
December 2, 2015
Grain Market Outlook
013/14.
Downward adjustments by the USDA in the November WASDE report in Chinese corn feeding for the last three
marketing years had a marked impact on World corn supply‐demand balances relative to a month earlier.
Page | 2
I. U.S. Corn Market Situation and Outlook
I‐A. November USDA Reports & “New Crop” MY 2015/16 Projections
On November 10th in its Crop Production report the USDA National Agricultural Statistics Service (NASS)
made its’ fourth 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 October 24 and November 5, 2015 to gather information on expected U.S. corn
yields as of November 1, 2015. During the same time period approximately 9,200 farm operator surveys were
conducted by the USDA primarily by phone. Forecast accuracy (root mean square error) of this November 1,
2015 projection is 1.1 percent, indicating that there is a 67% probability of the final 2015 estimate being within
plus or minus 1.1% of the USDA’s November 1st projection of 13.654 billion bushels, i.e., in the range of 13.503
to 13.804 billion bushels.
On the same day the USDA World Agricultural Outlook Board (WAOB) released its November 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 “negative” manner to the
information in the November 10th USDA reports, and in the days afterward has trended sideways‐to‐marginally
higher. 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 – Tuesday, November 10th – Chicago Mercantile Exchange (CME) MARCH 2016
corn futures prices opened at $3.67 ¼ per bushel, and traded in a range of $3.65 ‐ $3.76 ½ during the session,
before settling at $3.82 ¾ – down $0.08 ½ for the day (Figure 1). Since then, MARCH 2016 Corn has traded
from a low of $3.64 ¼ on November 16th to a high of $3.75 ½ on December 1st before closing at $3.73 ¾ on the
same day.
The CME DECEMBER 2016 corn contract represents price prospects during September‐November, 2016 –
including the anticipated bulk of the key U.S. corn harvest period of October through early November, 2016.
DECEMBER 2016 is the futures contract which local basis adjustments are made off of for most of the “harvest
2016” corn and grain sorghum forward contract price bids or hedges. The DECEMBER 2016 corn futures
market contract also initially responded “negatively” to the information in the November 10th USDA reports,
and since has trended sideways‐to‐lower.
On the day of the report CME DECEMBER 2016 corn futures prices opened at $3.95 ¼ per bushel, trading
within the range of $3.87 ‐ $3.95 ¾ during the session, before settling at $3.90 ½ – down $0.04 ½ per bushel
Page | 3
for the day (Figure 1). Since then, DECEMBER 2016 Corn has traded from lows of $3.87 ¼ on November 13th
and 18th to a high of $3.97 ¼ on December 1st before closing at $3.95 ¾ on that same day.
Figure 1. MARCH & DECEMBER 2016 CME Corn Futures Price Charts
ne …
September 1, 2015
Grain Market Outlook
g stocks of 902 mb, 6.72% S/U, & $6.90 /bu U.S. corn MYA prices.
World Corn Supply‐Demand: World total supplies of 1,183 million metric tons (mmt) are projected for “new
crop” MY 2015/16, up from 1,181 mmt in “old crop” MY 2014/15, and 1,128 mmt in MY 2013/14. Projected
World corn ending stocks of 195.1 mmt (19.8% S/U) in “new crop” MY 2015/16 are down marginally from
197.4 mmt (20.1% S/U) in “old crop” MY 2014/15, but up from 175.0 mmt (18.4% S/U) in MY 2013/14.
Page | 2
I. U.S. Corn Market Situation and Outlook
I‐A. August USDA Reports & “New Crop” MY 2015/16 Projections
On August 12th the USDA National Agricultural Statistics Service (NASS) in its Crop Production report
made its’ first projection of 2015 U.S. corn production as of August 1, 2015 that was based on actual farmer
surveys and field trials. 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
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 September 1, 2015
and will last through August 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 August 12th USDA reports, but in the days afterward have trended “first higher then
sideways”. 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, August 12th – Chicago Mercantile Exchange (CME) DECEMBER 2015
corn futures prices opened at $3.87 ¾ per bushel, and traded in a range of $3.57 ½ ‐ $3.93 ½ during the
session, before settling at $3.68 – down $0.19 ½ for the day (Figure 1). Since then, DECEMBER 2015 Corn has
traded from a low of $3.65 ½ on Monday, August 24th to a high of $3.86 ¾ on Tuesday, August 25th to before
closing at $3.75 ¼ on Monday, August 31st.
Figure 1. DECEMBER 2015 & MAY 2016 CME Corn Futures Price Charts …
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).
Page | 5
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 provided in Figure 8 – which shows estimated a) DDGS
corn equivalent U.S. domestic livestock feeding, and b) DDGS exports as well as other categories of U.S. corn
usage since MY 1989/90.
This analysis assumes 16.00 pounds of distillers dried grains and solubles (DDGS) per 56 pound bushel of
corn used in ethanol production – following from recent ethanol industry surveys. According these estimates,
since MY 2010/11 approximately 0.993‐1.130 bb of U.S. corn equivalent bushel‐weights of DDGS are projected
either to have already been or are to be fed to U.S. livestock during each marketing year – i.e., 1.108 bb in
DDGS corn‐weight equivalents in MY 2010/11, 1.130 bb in MY 2011/12, 1.004 bb in MY 2012/13, 993 mb in MY
2013/14, and 1.006 bb in both “current crop” MY 2014/15 and “new crop” MY 2015/16. Over the five most
recent marketing years, DDGS exports in corn equivalent weights are estimated to range from 299 to 479 mb,
– i.e., 326 mb in DDGS corn‐weight equivalents in MY 2010/11, 299 mb in MY 2011/12, 322 mb in MY 2012/13,
473 mb in MY 2013/14, and a record high 479 mb in both “current crop” MY 2014/15 and in “new crop” MY
2015/16.
U.S. Corn Exports: Projected U.S. corn exports of 1.900 bb in “new crop” MY 2015/16 is up from 1.825 bb
(up 25 mb) in “current” MY 2014/15, less than 1.917 bb in MY 2013/14, and up sharply from 730 mb in MY
2013/14 – the 41 year low (since MY 1975/76) (Table 1, Figures 6 and 8).
According to the USDA Foreign Agricultural Service (FAS) weekly export data (http://apps.fas.usda.gov/export‐
sales/esrd1.html), as of May 7th, through the 36th week of “current crop” MY 2014/15 (36 of 52 weeks), 1.145 bb of
U.S. corn had been physically shipped for export – equal to 69.2% of the USDA’s updated projection for
“current crop” MY 2014/15 of 1.825 bb. An additional 498.8 mb of U.S. corn had been pre‐sold for future
export shipments during the “current crop” 2014/15 marketing year – prior to August 31, 2015 (the end of
“current crop” MY 2014/15).
Page | 6
Adding together 1,145.1 mb in past shipments plus 498.8 mb in forward sales amounts to 1,634.9 mb, or
89.6% of the USDA’s 1.825 bb U.S. corn export target for “current crop” MY 2014/15 in the May 12th USDA
WASDE report with 69.2% (36/52 weeks) of the marketing year completed. United States’ corn exports will
need to average 42.5 mb per week for the remainder of the “current crop” 2014/15 marketing year to achieve
the USDA’s 1.825 bb projection. This compares to 44.7 mb and 43.7 mb of export shipments for the weeks
ending April 30th and May 7th, respectively – i.e., each being ahead of the pace needed to meet the USDA’s
export projection, respectively.
Non‐Ethanol FSI: Forecast non‐ethanol food, seed and industrial (FSI) use of 1.360 bb in “new crop” MY
2015/16 is greater than 1.347 bb in “current” MY 2014/15 (reduced 48 mb from the April WASDE), and
compares to 1.369 bb in MY 2013/14 (up 2 mb), and 1.397 bb in MY 2012/13 (Table 1, Figures 6 and 8).
Feed and Residual Use: Forecast U.S. feed and residual use of 5.300 bb in “new crop” MY 2015/16 is up
from 5.250 bb for “current” MY 2014/15, 5.034 bb in MY 2013/14, 4.315 bb in MY 2012/13, and 4.520 bb in
MY 2011/12 (Table 1, Figures 6 and 8). These levels of corn use for livestock feeding are somewhat correlated
with the amounts of energy feeds per grain consuming animal units (GCAUs) reported by the USDA over the
same time period as illustrated in the following information.
In the USDA May 14th Feed Outlook Report (http://usda.mannlib.cornell.edu/usda/current/FDS/FDS‐05‐14‐2015.pdf) the
USDA Economic Research Service (ERS) indicates that over the MY 2013/14 through “new crop” MY 2015/16
time period, the total amount of Energy Feeds in the U.S. – including corn, sorghum, barley, oats and wheat –
is estimated to be 134.3 million metric tons (mmt) in MY 2013/14 (95.2% corn), and 141.8 mmt in “current”
MY 2014/15 (94.1% corn), and is projected to be 144.3 mmt in “new crop” MY 2015/16 (93.36% corn). Over
this same 3 year period, total U.S. Grain Consuming Animal Units (GCAUs) are estimated to be 110.8 million in
MY 2013/14, 93.2 million in “current” MY 2014/15, and 94.7 million in “new crop” MY 2015/16.
As a result, U.S. Energy Feeds per Grain Consuming Animal Unit is estimated to be 1.212 metric tons per
animal unit (mt/au) in MY 2013/14, and 1.521 mt/au in “current” MY 2014/15, and is projected to be 1.524
mt/au in “new crop” MY 2015/16. As the availability of feed grain and other energy feeds has increased or is
expected to increase from the drought stricken “short crop” year of MY 2012/13 to the record “large crop”
years of MY 2013/14 and “current” MY 2014/15, and now into the expected third consecutive large crop year
in “new crop” MY 2015/16 for corn and other aggregated feedgrains, the amount of energy feeds fed per
animal unit and total feed use of U.S. corn has increased – helping to bring downward pressure on the prices of
U.S. corn and other feedgrains.
Total Use of U.S. Corn for “new crop” MY 2015/16 is projected to be a record high 13.760 bb – up from the
current record highs of 13.622 bb in “current” MY 2014/15, and 13.454 bb in MY 2013/14, and up sharply from
11.083 bb in drought‐affected MY 2012/13 (Table 1 and Figures 6 and 8). United States’ total corn use has
varied widely in recent marketing years – due largely to changes in available U.S. corn supplies. Corn use in the
U.S. over time has changed from 12.737 bb in MY 2007/08, to 12.008 bb in MY 2008/09, 13.041 bb in MY
2009/10, 13.033 bb in MY 2010/11, 12.482 bb in MY 2011/12, 11.083 bb in MY 2013/14, the one time record
high of 13.454 bb in MY 2013/14, the previous record high amount of 13.622 bb in “current crop” MY 2014/15,
and now the new projected record high of 13.760 bb in “new crop” MY 2015/16.
U.S. Corn Ending Stocks, % Ending Stocks‐to‐Use, & Prices
U.S. corn ending stocks for “new crop” MY 2015/16 are projected to be 1.746 bb – down 105 mb from
1.851 bb in “current” MY 2014/15, but up from 1.232 bb in MY 2013/14 (Table 1 & Figure 9). Since MY
Page | 7
2006/07 (1.304 bb), U.S. corn ending stocks have been 1.624 bb in MY 2007/08, 1.673 bb in MY 2008/09, 1.708
bb in MY 2009/10, 1.128 bb in MY 2010/11, 989 mb in MY 2011/12, 821 mb in “drought stricken” MY 2012/13,
1.232 bb in MY 2013/14, 1.851 bb in “current crop” MY 2014/15, and now 1.746 bb in “new crop” MY
2015/16.
Projected percent (%) ending stocks‐to‐use of 12.69% in “new crop” MY 2015/16 is down from 13.59% in
“current” MY 2014/15 (Table 1 and Figures 9 and 10). On a year‐by‐year basis, U.S. corn % ending stocks‐to‐
use trended downward from 12.75% in MY 2007/08 and 13.94% in MY 2008/09, to 13.10% in MY 2009/10,
8.65% in MY 2010/11, 7.92% in MY 2011/12, and then down to 7.41% in “drought stricken” MY 2012/13,
before increasing for the first time in six (6) years to 9.16% in MY 2013/14, and then to 13.49% in “current” MY
2014/15 – with a projected decline to 12.69% in “new crop” MY 2015/16.
U.S. average corn prices for “new crop” MY 2015/16 are projected to be in the range of $3.20‐$3.80 bu/ac
(midpoint = $3.50) (Table 1 and Figures 9 and 10). Since the beginning of the rapid expansion in U.S. ethanol
production in 2006, U.S. corn prices have moved first higher, then lower, and then higher again, changing from
$3.04 /bu in MY 2006/07, to $4.20 in MY 2007/08, $4.06 in MY 2008/09, $3.55 in MY 2009/10, $5.18 in MY
2010/11, $6.22 in MY 2011/12, and then up to the record high of $6.89 in “drought stricken” MY 2013/14.
However, if the May 12th WASDE projection holds true, prices will now have declined for three consecutive
years since the $6.89 record high in MY 2012/13, down to $4.46 in MY 2013/14, down to $3.55‐$3.75
(midpoint = $3.65) in “current crop” MY 2014/15, and now down to $3.20‐$3.80 in “new crop” MY 2015/16.
I‐D. KSU Corn Market Scenarios for “New Crop” MY 2015/16
Kansas State University Extension has provided forecasts of U.S. corn supply‐demand balances and prices
for the “new crop” 2015/16 marketing year to complement and expand upon those of the USDA, with details
provided below. Three probability‐weighted Kansas State University (KSU) projections are provided.
The first scenario is based on USDA reported U.S. corn acreage with a normal crop “trend yield” of 162.25
bu/ac – given a 55% probability of occurring in 2015. The second scenario is based on lower U.S. corn planted
acreage in 2015 than projected by the USDA, again coupled with a normal crop “trend yield” of 162.25 bu/ac –
given a 25% probability of occurring in 2015. The third scenario is based on USDA planted acreage projections
and a short crop “low yield” of 155.0 bu/ac (given a 20% probability of occurring in 2015).
KSU Scenario #1 – A “Normal Crop” of 13.262 bb with 55% Likelihood of Occurring
For “new crop” MY 2015/16, this “normal crop” trend line yield KSU projection reflects the likelihood of a
reduction in U.S. corn planted acreage in 2015, and how a possible return to long term trend line U.S. corn
yields in 2015 along with a moderation of 2015 U.S. corn production, would likely affect U.S. corn supply‐
demand balances and prices in the coming “new crop” 2015/16 marketing year, i.e., September 1, 2015
through August 31, 2016. This scenario is thought to have approximately a 55% probability of occurring (i.e.,
5.5 out of 10) at this point in time.
Specifically, this KSU U.S. corn supply‐demand scenario assumes that 2015 U.S. corn planted acreage will
be down 1.398 million acres (ma) to 89.199 ma (equal to the USDA’s May WASDE projection), with 2015 U.S.
corn harvested acreage also down 1.421 ma to 81.715 ma (also equal to the USDA May WASDE projection)
(Table 1 and Figure 3). With a return to long term (1973‐2014) trend line U.S. corn yields of 162.3 bu/ac, 2015
U.S. corn production is forecast to be 13.262 bb.
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Following these projections of corn production for “new crop” MY 2015/16, U.S. total corn usage is then
estimated to be a record high 13.730 – but down from the USDA’s May 2015 projection of 13.760 bb for “new
crop” MY 2015/16 (Table 1 and Figure 6).
KSU estimates are for U.S. corn ending stocks to be 1.408 bb, and for % ending stocks‐to‐use of 10.25% for
“new crop” MY 2015/16. United State’s corn average prices would be projected to average near $4.25 /bu for
“new crop” MY 2015/16 (Table 1 and Figures 9 and 10).
Following is the “normal crop / trend yield” U.S. corn supply‐demand and price scenario for “new crop” MY
2015/16 – given a 55% probability of occurring.
1st KSU Scenario for “New Crop” MY 2015/16 U.S. Corn Supply/Demand & Prices
Estimated Probability of Occurring = 55% …
December 24, 2014
Grain Market Outlook
… gh
November 5th period. The next major survey based USDA report addressing U.S. crop production for grain
sorghum, corn and other feedgrains, wheat, soybeans and other major crops will be the USDA Annual Crop
Production Summary report to be released on Monday, January 12, 2015. On that same day USDA NASS will
also release the January 2015 Crop Production, December Grain Stocks, and Winter Wheat Seedings reports.
Also on December 10th the USDA World Agricultural Outlook Board (WAOB) released its December 2014
World Agricultural Supply and Demand Estimates (WASDE) report – containing U.S. grain sorghum and World
coarse grain supply‐demand projections for both the 2013/14 as well as for “current crop” 2014/15 marketing
years. The 2013/14 marketing year ended on August 31, 2014, while the “current crop” 2014/15 U.S. grain
sorghum marketing year began on September 1, 2014 and will last through August 31, 2015.
I‐B. CME Corn Futures Trends for the October‐December 2014 Period
Local cash grain sorghum prices are determined by local basis adjustments relative to corn futures
contracts. In this section, recent trends in Chicago Mercantile Exchange (CME) corn futures prices are
examined – given their relevance to cash grain sorghum prices in the U.S. and elsewhere.
Since the beginning of October 2014 corn futures prices have been generally trending higher – indicating at
the low trading price of $3.18 ¼ for the DECEMBER 2014 corn futures contract were indeed the fall harvest
low (i.e., unless March 2015 CME corn futures prices drop sharply before the end of this month). The
DECEMBER 2014 corn futures contract “went off the board” at $3.96 ¼ on December 12, 2014, closing up
$0.78 per bushel or 24.3% from the October 1st contract low.
A time of seasonal market weakness for U.S. feedgrain prices has typically occurred during the months of
January‐February in large crop – low price years. Therefore it is still possible that prices may trend lower again
sometime before spring, 2015. However, the $3.18 ¼ low attained by the CME DECEMBER 2015 corn contract
on October 1st could be a key point of support for CME MARCH 2015 corn futures prices should such a seasonal
price decline occur in coming months.
The “current crop” MARCH 2015 corn futures market contract initially responded in a neutral‐to‐negative
manner to the information in the December 10th USDA reports, but since then has trended higher. On the day
of the report – Wednesday, December 10th – Chicago Mercantile Exchange (CME) MARCH 2015 corn futures
prices opened at $3.94 ¼ per bushel, and traded in a range of $3.89 ¼ ‐ $3.98 ¼ during the session, before
Page | 3
settling at $3.93 ¾ – down $0.01 ½ for the day (Figure 1). 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. Since then, MAR 2015
has traded from a low of $3.92 ¼ on Thursday, December 11th to a high of $4.14 ¼ on Monday, December 22nd
before closing at $4.11 ¾ on that same day.
The CME MARCH 2015 corn contract is now the “lead” corn futures contract, representing current grain
market price prospects through mid‐March 2015 – being the futures contract which local basis adjustments
are made off of for current cash grain sorghum and corn price bids are made off of in North American grain
markets.
The “next crop” DECEMBER 2015 corn futures market contract also initially responded in a neutral‐to‐
negative manner to the information in the December 10th USDA reports, but since then has trended higher.
On the day of the report CME DECEMBER 2015 corn futures prices opened at $4.22 ¼ per bushel, trading
within the range of $4.16 ¾ ‐ $4.25 ¾ during the session, before settling at $4.21 – down $0.02 ½ per bushel
for the day (Figure 1). Since then, DECEMBER 2015 corn futures prices have traded in a range from a low of
$4.19 ½ on Thursday, December 11th to a high of $4.37 ¾ on Monday, December 22nd before closing at $4.34
¾ on that same day.
The CME DECEMBER 2015 corn contract is now the “next crop” corn futures contract, representing grain
market price prospects for the mid‐October through mid‐December 2015 time period. DEC 2015 is the futures
contract which local basis adjustments are made off of for “fall harvest 2015” grain sorghum and corn forward
contract price bids are made off of in North American grain markets.
Figure 1. MARCH 2015 and DECEMBER 2015 CME Corn Futures Price Charts (electronic trade) …
July 18, 2014
Grain Market Outlook
year ago. Forecast “new crop”
2014/15 ending stocks were also raised to 415 mb (up 90 mb from June, and up 275 mb from a year ago),
while ending stocks‐to‐use were projected to be 11.7% (up from 9.4% in June, and from 4.14% in MY 2013/14).
The USDA forecast that “new crop” MY 2014/15 average prices will be $9.50‐$11.50 with a midpoint of $10.50
– down $0.25 /bu from June. It is important to remember that the first actual survey‐based projection of 2014 …
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).
…