corn & ethanol

Corn & Ethanol

June 2013

www.BeesonInc.com Commodity Complexity Solved. (502) 241-8460

2527 Nelson Miller Parkway | Suite 204 | Louisville, KY 40223

www.BeesonInc.com Beeson & Associates, Inc. (502) 241-8460

2

Corn Price History

$5.00

$5.50

$6.00

$6.50

$7.00

$7.50

$8.00

$8.50

12-J

un

23-J

ul

2-S

ep

13-O

ct

23-N

ov

3-Ja

n

13-F

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26-M

ar

6-M

ay

do

llars

/ b

us

he

l

Nearby Corn Futures


3

Corn Supply & Demand

2006/07 2007/08 2008/09 2013/14May

Planted mil acres 78.3 93.5 86.0 86.5 88.2 91.9 97.2 97.3Harvested 70.6 86.5 78.6 79.6 81.4 84.0 87.4 89.5Yield 149.1 150.7 153.9 164.7 152.8 147.2 123.4 158.0

Production mil bu 10,531 13,038 12,092 13,092 12,447 12,358 10,780 14,140 Beginning Stocks 1,967 1,304 1,624 1,673 1,708 1,128 989 759 Supply 12,510 14,362 13,729 14,774 14,182 13,516 11,894 14,924

Feed Usage 5,591 5,913 5,182 5,125 4,795 4,548 4,400 5,325 Food Usage 3,490 4,387 5,025 5,961 6,426 6,437 5,985 6,295

Ethanol 2,119 3,049 3,709 4,591 5,019 5,011 4,600 4,850

Exports 2,125 2,437 1,849 1,980 1,834 1,543 750 1,300

Total Usage 11,207 12,737 12,056 13,066 13,054 12,527 11,135 12,920

Ending Stocks 1,304 1,624 1,673 1,708 1,128 989 759 2,004 Ending Stocks / Use 12% 13% 14% 13% 9% 8% 7% 16%

U.S. Corn Balance Sheet2010/112009/10 2011/12 2012/13


4

Late Start For Corn Planting

0

20

40

60

80

100

1-A

pr

8-A

pr

15

-Ap

r

22

-Ap

r

29

-Ap

r

6-M

ay

13

-Ma

y

20

-Ma

y

27

-Ma

y

3-J

un

% C

om

ple

teUS Corn Planting Progress

5-yr ave

2012

2013


5

210

220

230

240

250

260

270

280

290

300Ja

n-93

Feb

-93

Mar

-93

Ap

r-93

May

-93

Jun-

93

Jul-9

3

Aug

-93

Sep

-93

Oct

-93

No

v-93

Dec

-93

December 1993 Corn Futures

cen

ts /

bu

shel


cen

ts /

bu

shel

cen

ts /

bu

shel

220

240

260

280

300

320

340

360Ja

n-95

Feb

-95

Mar

-95

Ap

r-95

May

-95

Jun-

95

Jul-9

5

Aug

-95

Sep

-95

Oct

-95

No

v-95

Dec

-95


cen

ts /

bu

shel

cen

ts /

bu

shel

cen

ts /

bu

shel

240

260

280

300

320

340

360

380

400Ja

n-96

Feb

-96

Mar

-96

Ap

r-96

May

-96

Jun-

96

Jul-9

6

Aug

-96

Sep

-96

Oct

-96

No

v-96

Dec

-96


cen

ts /

bu

shel

cen

ts /

bu

shel

cen

ts /

bu

shel

December Corn In Past Late Planted Years

200

210

220

230

240

250

260

270

280

290

300

Jan-

02

Feb

-02

Mar

-02

Ap

r-02

May

-02

Jun-

02

Jul-0

2

Aug

-02

Sep

-02

Oct

-02

No

v-02

Dec

-02


cen

ts /

bu

shel

cen

ts /

bu

shel

cen

ts /

bu

shel

250

350

450

550

650

750

850

Jan-

08

Feb

-08

Mar

-08

Ap

r-08

May

-08

Jun-

08

Jul-0

8

Aug

-08

Sep

-08

Oct

-08

No

v-08

Dec

-08


cen

ts /

bu

shel

cen

ts /

bu

shel

cen

ts /

bu

shel


6

December Corn Prices

$3.50

$4.50

$5.50

$6.50

$7.50

$8.50

$9.50

2004

1994

1992

1982

1985

1986

1981

2008

2005

2006

2007

1998

2000

2001

1989

1999

1984

1997

2011

1991

1993

1983

1988

2012

Dec Corn Range in Jun-Sep From May LowYears Where Market Falls Lower In May

2013 May Low = $5.12

greater than trend yield below trend


7

December Corn Prices

$2.00

$3.00

$4.00

$5.00

$6.00

$7.00

$8.00

$9.00

2004

1994

1992

1982

1985

1986

1981

2008

2005

2006

2007

1998

2000

2001

1989

1999

1984

1997

2011

1991

1993

1983

1988

2012

Dec Corn Range in Oct-Dec From May LowYears Where Market Falls Lower In May

2013 May Low = $5.12

greater than trend yield below trend


8

Growing Season Weather Expectations


9

Corn vs. Ethanol

$3.00

$4.00

$5.00

$6.00

$7.00

$8.00

$9.00

$1.00

$1.20

$1.40

$1.60

$1.80

$2.00

$2.20

$2.40

$2.60

$2.80

$3.00Ja

n-12

Feb-

12

Mar

-12

Apr-

12

May

-12

Jun-

12

Jul-1

2

Aug-

12

Sep-

12

Oct

-12

Nov

-12

Dec-

12

Jan-

13

Feb-

13

Mar

-13

Apr-

13

May

-13

Ethanol

Corn

do

llars

/ g

allo

nd

olla

rs / b

us

he

lEthanol & Corn Price History


10

Ethanol Margins


11

Corn vs. Ethanol (futures 1/1/2012 forward)

y = 4.0347x - 2.3624R² = 0.8786

$5.00

$5.50

$6.00

$6.50

$7.00

$7.50

$8.00

$8.50

$9.00

$1.90 $2.00 $2.10 $2.20 $2.30 $2.40 $2.50 $2.60 $2.70 $2.80

Corn Correlation to Ethanol Price

co

rn:

do

llars

/ b

us

he

l

ethanol: dollars / gallon

$5.00

$5.50

$6.00

$6.50

$7.00

$7.50

$8.00

$8.50

$9.00

$1.90 $2.00 $2.10 $2.20 $2.30 $2.40 $2.50 $2.60 $2.70 $2.80

Corn Correlation to Ethanol Price

co

rn:

do

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/ b

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ethanol: dollars / gallon

Since 2/1/13


12

Unleaded & Ethanol Price History

$0.00

$0.50

$1.00

$1.50

$2.00

$2.50

$3.00

$3.50

$4.00Ja

n-07

Jun-

07

Nov

-07

Apr-

08

Sep-

08

Feb-

09

Jul-0

9

Dec-

09

May

-10

Oct

-10

Mar

-11

Aug-

11

Jan-

12

Jun-

12

Nov

-12

Apr-

13

Ethanol

Unleaded

do

llars

/ g

allo

n

Unleaded & Ethanol Price History


13

Relative Value

60%

65%

70%

75%

80%

85%

90%

95%

100%Ja

n-12

Feb-

12

Mar

-12

Apr-

12

May

-12

Jun-

12

Jul-1

2

Aug-

12

Sep-

12

Oct

-12

Nov

-12

Dec-

12

Jan-

13

Feb-

13

Mar

-13

Apr-

13

May

-13

Ethanol Futures / RBOB


14

Ethanol Stocks


15

US Oil- Supply


16

World Oil Product- Supply


17

Energy Storage


18

Shale Plays in the US


19

Unleaded Price (July Futures)


20

Corn Breakeven vs RBOB

RBOB Price $2.10 $2.25 $2.40 $2.55 $2.70 $2.85 $3.00 $3.15 $3.30 $3.45

Ethanol / RBOB100% $5.29 $5.71 $6.13 $6.55 $6.97 $7.39 $7.81 $8.23 $8.65 $9.07

90% $4.71 $5.25 $5.80 $6.35 $6.90 $7.45 $7.99 $8.46 $9.01 $9.55

80% $4.12 $4.62 $5.13 $5.64 $6.14 $6.65 $7.15 $7.58 $8.08 $8.59

70% $3.53 $3.99 $4.46 $4.92 $5.39 $5.85 $6.31 $6.69 $7.16 $7.62

60% $2.94 $3.36 $3.79 $4.21 $4.63 $5.05 $5.47 $5.81 $6.23 $6.66

Corn Breakeven Price


21

Natural Gas - Demand


22

Energy Storage


23

Natural Gas - Prices

$1.50

$1.75

$2.00

$2.25

$2.50

$2.75

$3.00

$3.25

$3.50

$3.75

$4.00

$4.25

$4.502-

Ap

r

24-A

pr

16-M

ay

7-Ju

n

29-J

un

21-J

ul

12-A

ug

3-S

ep

25-S

ep

17-O

ct

8-N

ov

30-N

ov

22-D

ec

13-J

an

4-F

eb

26-F

eb

20-M

ar

11-A

pr

3-M

ay

25-M

ay

do

llars

/ M

MB

tu

Nearby Natural Gas Futures


24

Summary

Crude Oil

• Prices will be under pressure due to increasing supply

Ethanol

• Industry under-utilization will pressure ethanol prices

Corn

• Look for corn prices to reach near $4 per bu in Q4 2013

corn & ethanol

Documents

beeson associates

corn prices

corn supply

corn ethanoljune

corn breakeven vs

unleaded ethanol price

ethanol pricescorn

ethanol futures