current grain market values

Extension and Outreach/Department of Economics

Current Grain Market Values

Crop Challenges for 2013Charles City, Iowa

Dec. 14, 2012

Chad HartAssociate Professor/Grain Markets Specialist

chart@iastate.edu515-294-9911

Extension and Outreach/Department of Economics

U.S. Corn Supply and Use2008 2009 2010 2011 2012

Area Planted (mil. acres) 86.0 86.4 88.2 91.9 96.9

Yield (bu./acre) 153.9 164.7 152.8 147.2 122.3Production (mil. bu.) 12,092 13,092 12,447 12,358 10,725Beg. Stocks (mil. bu.) 1,624 1,673 1,708 1,128 988

Imports (mil. bu.) 14 8 28 29 100Total Supply (mil. bu.) 13,729 14,774 14,182 13,515 11,814Feed & Residual (mil. bu.) 5,182 5,125 4,795 4,547 4,150Ethanol (mil. bu.) 3,709 4,591 5,019 5,011 4,500

Food, Seed, & Other (mil. bu.) 1,316 1,370 1,407 1,426 1,367Exports (mil. bu.) 1,849 1,980 1,834 1,543 1,150Total Use (mil. bu.) 12,056 13,066 13,055 12,527 11,167Ending Stocks (mil. bu.) 1,673 1,708 1,128 988 647

Season-Average Price ($/bu.) 4.06 3.55 5.18 6.22 7.40

Source: USDA-WAOB

Extension and Outreach/Department of Economics

U.S. Soybean Supply and Use2008 2009 2010 2011 2012

Area Planted (mil. acres) 75.7 77.5 77.4 75.0 77.2Yield (bu./acre) 39.7 44.0 43.5 41.9 39.3Production (mil. bu.) 2,967 3,359 3,329 3,094 2,971

Beg. Stocks (mil. bu.) 205 138 151 215 169Imports (mil. bu.) 13 15 14 16 20Total Supply (mil. bu.) 3,185 3,512 3,495 3,325 3,160

Crush (mil. bu.) 1,662 1,752 1,648 1,703 1,570Seed & Residual (mil. bu.) 106 110 130 90 116Exports (mil. bu.) 1,279 1,499 1,501 1,362 1,345Total Use (mil. bu.) 3,047 3,361 3,280 3,155 3,031

Ending Stocks (mil. bu.) 138 151 215 169 130Season-Average Price ($/bu.) 9.97 9.59 11.30 12.50 14.55

Source: USDA-WAOB

Extension and Outreach/Department of Economics

Prices

11.50

12.25

13.00

13.75

14.50

15.25

16.00

16.75

4.50

5.00

5.50

6.00

6.50

7.00

7.50

8.005/

21/2

012

6/4/

2012

6/18

/201

2

7/2/

2012

7/16

/201

2

7/30

/201

2

8/13

/201

2

8/27

/201

2

9/10

/201

2

9/24

/201

2

10/8

/201

2

10/2

2/20

12

11/5

/201

2

11/1

9/20

12

12/3

/201

2

$ pe

r bus

hel

$ pe

r bus

hel

Corn Soybeans

Extension and Outreach/Department of Economics

Projected Corn Yields

Extension and Outreach/Department of Economics

Projected Soybean Yields

Extension and Outreach/Department of Economics

World Corn Production

Source: USDA-WAOB

Extension and Outreach/Department of Economics

World Soybean Production

Source: USDA-WAOB

Extension and Outreach/Department of Economics

World Weather

Source: USDC and USDA

Extension and Outreach/Department of Economics

Hog Crush Margin

Source: ISU Extension

The Crush Margin is the return after the pig, corn and soybean meal costs.Carcass weight: 200 pounds Pig price: 50% of 5 mth out lean hog futuresCorn: 10 bushels per pig Soybean meal: 150 pounds per pig

Extension and Outreach/Department of Economics

Cattle Crush Margin

Source: ISU Extension

The Crush Margin is the return after the feeder steer and corn costs.Live weight: 1250 pounds Feeder weight: 750 pounds Corn: 50 bushels per head

Extension and Outreach/Department of Economics

U.S. Meat Production & Prices

Source: USDA-WAOB

Extension and Outreach/Department of Economics

Corn Export Shifts

Source: USDA-FAS

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2,000

9/1 10/1 11/1 12/1 1/1 2/1 3/1 4/1 5/1 6/1 7/1 8/1

Mill

ion

bush

els

Week2010 2011 2012

Extension and Outreach/Department of Economics

Soy Export Shifts

Source: USDA-FAS

0

200

400

600

800

1,000

1,200

1,400

1,600

9/1 10/1 11/1 12/1 1/1 2/1 3/1 4/1 5/1 6/1 7/1 8/1

Mill

ion

bush

els

Week2010 2011 2012

Extension and Outreach/Department of Economics

Corn Grind for Ethanol

82

84

86

88

90

92

94

96

98

100

102

104

Sep-10 Jan-11 May-11 Sep-11 Jan-12 May-12 Sep-12

Mill

ion

bush

els

Extension and Outreach/Department of Economics

U.S. Blended Gasoline Consumption

Source: DOE-EIA, via USDA-ERS

7.6 bil. gal.

7.4 bil. gal.

Extension and Outreach/Department of Economics

5.60

5.80

6.00

6.20

6.40

6.60

6.80

7.00

7.20

7.40

Dec

-12

Mar

-13

Jun-

13

Sep

-13

Dec

-13

Mar

-14

Jun-

14

Sep

-14

Dec

-14

Mar

-15

Jun-

15

Sep

-15

Dec

-15

$ pe

r bus

hel

Current Corn Futures

Source: CME Group, 12/13/2012

6.68

5.895.55

Extension and Outreach/Department of Economics

12.00

12.50

13.00

13.50

14.00

14.50

15.00

Dec

-12

Mar

-13

Jun-

13

Sep

-13

Dec

-13

Mar

-14

Jun-

14

Sep

-14

Dec

-14

Mar

-15

Jun-

15

Sep

-15

$ pe

r bus

hel

Current Soybean Futures

Source: CME Group, 12/13/2012

13.91

12.4712.03

Extension and Outreach/Department of Economics

Total Acreage Shift

Source: USDA-NASS

Extension and Outreach/Department of Economics

Acreage Shift by Crop

Source: USDA-NASS

Acreage change from 2011Units: 1,000 acres

Extension and Outreach/Department of Economics

Acreage Shift by State

Source: USDA-NASS

Top: Planted in 2012Bottom: Change from 2011Units: 1,000 acres

Extension and Outreach/Department of Economics

Extension and Outreach/Department of Economics

Thoughts for 2013 and BeyondSupply/demand concerns

Soil moisture issuesBiofuel and export strengthWorldwide response to drought-induced pricing

2012/13USDA

2012/13Futures

(12/13/12)

2013/14Futures

(12/13/12)Corn $7.40 $6.68 $5.89Soybeans $14.55 $13.91 $12.47

Risk managementCrop insurancePrice protection

Extension and Outreach/Department of Economics

Thank you for your time!

Any questions?

My web site:http://www.econ.iastate.edu/~chart/

Iowa Farm Outlook:http://www.econ.iastate.edu/ifo/

Ag Decision Maker:http://www.extension.iastate.edu/agdm/