corn & soybean outlook webinar - purdue agriculture · 2019-04-01 · corn & soybean...

April 1, 2019

Corn & Soybean Outlook Webinar

Michael Langemeier, Associate Director, Center for Commercial Agriculture

James Mintert, Director, Center for Commercial Agriculture

Corn & Soybean Outlook Webinar, April 1, 2019

USDA’s Planting Intentions & Grain Stocks Reports Surprises• Corn Stocks larger than expected

– USDA’s March 1 estimate, 8.605 billion bushels

– 270 million bushels larger than average pre-release estimate

• Corn Planting Intentions larger than expected

– USDA estimated 92.792 million acres

– 1.46 million acres more than average pre-release estimate

• Soybean Planting Intentions smaller than expected

– USDA estimated 84.617 million acres

– 1.55 million acres below average pre-release estimate


9092949698

100102104106108

Sep Oct Nov Dec Jan Feb Mar Apr

Weekly Ethanol Production% of Previous Year


5

15

25

35

45

55

65

SepOctNov DecJan FebMar AprMay Jun Jul Aug

MMT Corn Export Commitments

'16/17

17/18

'18/19

Corn export commitments are

down about 8% so far this year,

but USDA only has them down

3%. On April 9, USDA will likely

drop exports 25-75 million

bushels.


3% 2% 3%1%

29%

13%

1% 0% 0%4%

0%

5%

10%

15%

20%

25%

30%

IN IL IA MN ND SD NE MO OH USSelected States & U.S.

Corn Acreage Change from 2018 to 2019Planting Intentions, U.S. & Selected States


-4%

-3%

-6% -6%-6%

-8%

-5%-6%

-1%

-5%

-9%-8%-7%-6%-5%-4%-3%-2%-1%0%

IN IL IA MN ND SD NE MO OH USSelected States & U.S.

Soybean Acreage Change from 2018 to 2019Planting Intentions, U.S. & Selected States


CornCurrentUSDA

3/8/2019

“Expected”USDA

4/9/2019

92.8 Million176.0 Bu./Ac

USDA 3/29/2019

USDA17/18 18/19 18/19 19/20

Carry In 2,293 2,140 2,140 1,985Production 14,609 14,420 14,420 15,000Total Supply 16,939 16,600 16,600 17,025Feed & Residual 5,304 5,375 5,300 (-75) 5,500FSI Non-Fuel 1,451 1,465 1,465 1,490FSI Fuel (Ethanol) 5,605 5,550 5,525 (-25) 5,600Export 2,438 2,375 2,325 (-50) 2,425Total Use 14,799 14,765 14,615 (-150) 15,015Ending Stocks 2,140 1,835 1,985 (+150) 2,010US Farm Price $3.36 $3.55 $3.50 (-.05) $3.50

$3.35-$3.75


-636

1 3 9 31 35 59 69142

-700-600-500-400-300-200-100

0100200

China

Taiwan

S. Korea

Japan

Africa

Mexico

Other Asia

Argentin

a

Europe

Million Bushels

2018 crop sales compared to 2017 crop sales:As of 3/21/2019 (latest data)

China Purchases Down 636 Mill Bu. or -60%Rest of World Up 317 Mill Bu. or +40%Net U.S. Decline Down 319 Mill Bu. or -19%

Change In U.S. Soybean Sales, 18/19 Vs. 17/18as of 3/21/19


10

20

30

40

50

60

Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug

Milli

on M

etric

Ton

s

'16/1717/18'18/19 Soybean export sales are currently

running 19% behind last year and USDA has them down only 14%. Expect some revision downward on 4/9/2019---we are using 15 million bu. down. However, China bought 29 million bu. (announced 3/29/2019) and there is still major uncertainty over a China trade deal

Soybean Export Commitments: Exported + Outstanding Sales


Soybeans USDA3/8/2019

“Expected” USDA4/9/2019

84.6 Mill. Ac 49.5 Bu./Ac

USDA 3/29/2019USDA17/18 18/19 18/19 19/20

Carry in 302 438 438 907

Production 4,412 4,544 4,544 4,147Total Supply 4,735 5,002 5,002 5,079Seed & Residual 113 127 125 (-2) 125Crush 2,055 2,100 2,110 (+10) 2,135Exports 2,129 1,875 1,860 (-15) 2,030Total Use 4,297 4,102 4,095 (-7) 4,290

Ending Stock 438 900 907 (+7) 789Farm Price $9.33 $8.60 $8.60 (=) $8.80

$8.10-$9.10

$3.60

$3.80-$3.85

May 19 Corn Futures: Barchart.com

Dec 19 Corn Futures: Barchart.com

$3.95-$4.00

$3.84

$8.50

$9.50

May 19 Bean Futures: Barchart.com

$9.00

$9.60

Nov 19 Bean Futures: Barchart.com


109

197

303

152

236

322287

331

387

$0$50

$100$150$200$250$300$350$400$450

Low Average HighLand Productivity Category

Corn Soybeans Overhead

2019 Estimated Contribution Margins in Indianafor Rotation Corn and Soybeans vs. Overhead Costs Per Acre

Contribution Margin = Return to Land, Labor, Machinery & Mgmt.


What is My Cost of Production?Illustrated Below: High Productivity Soil

Cost Category Rotation Corn Rotation Soybeans

Land (Fixed) $1.26 $4.06

Fertilizer (Variable) $0.70 $0.95

Machinery (Var. and Fixed)

$0.58 $1.68

Seed (Variable) $0.53 $1.03

Pesticides (Variable) $0.28 $0.77

Labor (Fixed) $0.21 $0.66

Sub-Total of 6 Major Costs $3.56 $9.15

Total Cost per Bushel $4.10 $9.91

Source: Purdue Crop Cost & Return Corn & Soybean Guide, March 2019


-$200

-$100

$0

$100

$200

$300

-$200

-$100

$0

$100

$200

$300

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Historical and Projected Earnings per Acrefor Corn and Soybeans in West Central Indiana

Corn Soybeans

Source: West Central Indiana Case Farm


-$150

-$100

-$50

$0

$50

$100

$150

$200

$250

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018P 2019P 2020P

Difference in Earnings per AcreWest Central Indiana (Corn Minus Soybeans)


-0.100-0.0500.0000.0500.1000.1500.2000.2500.3000.3500.400

07 08 09 10 11 12 13 14 15 16 17 18P 19P

Operating Profit Margin RatioWest Central Indiana Case Farm

Annual Average


Current Projections for Corn and Soybean Returns Look Weak

Reasons:

1. Return to normal yields

2. Higher fertilizer prices

3. Large carryover’s projected for corn and soybeans

4. No expectation for another round of trade assistance payments (MFP)

5. Payments arising from 2018 Farm Bill expected to be small

Marketing Strategies

Take advantage of spring planting rallies

Be wary of possible basis weakness this summer

April 1, 2019

Next Crop Outlook WebinarJuly 2, 2019

More info & register atpurdue.ag/webinar

corn & soybean outlook webinar - purdue agriculture · 2019-04-01 · corn & soybean...

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