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September 17, 2015
Grain Market Outlook
approximately 11,000 farm operator surveys were conducted by the USDA
primarily by phone. Forecast accuracy of this September 1, 2015 projection is 3.4 percent, indicating that
there is a 67% probability of the final 2015 estimate being within plus or minus 3.4% of the USDA’s September
1st projection of 13.585 billion bushels, i.e., in the range of 13.123 to 14.047 billion bushels.
On the same day the USDA World Agricultural Outlook Board (WAOB) released its September 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 …
April 30, 2015
Grain Market Outlook
xacerbated this
trend. After a low on December 3rd of $3.77 ¼, the CME MARCH 2015 corn contract climbed to a high of
$4.12 ¾ on December 29th (corresponding to a high of $4.25 ¼ for the CME MAY 2015 corn contract that same
day) before declining to a low of $3.65 ¾ by January 30th. Then after trading higher to $3.91 ¾ on February 9th,
the CME MARCH 2015 corn contract closed on February 27th at $3.84 ½, and eventually closed out at $3.74 on
March 13th. During this same period of time the CME MAY 2015 corn futures contract traded as high as to
$4.00 on February 9th before closing at $3.93 ¼ on February 27th, and $3.80 ½ on March 13th. After the
December 9th highs, neither the MARCH 2015 nor the MAY 2015 corn futures contracts have traded above
$4.00 per bushel – at least through Wednesday, April 29th.
The CME MAY 2015 corn contract is now the “lead” corn futures contract, representing current grain
market price prospects through late April 2015, when the CME JULY 2015 corn contract will assume market
leadership. Local basis adjustments are still cur …
June 15, 2015
Grain Market Outlook
… 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) …
February 18, 2015
Grain Market Outlook
Page | 2
I. U.S. Corn Market Situation and Outlook
I‐A. February USDA Reports & “Current Crop” MY 2014/15 Projections
On February 10th the USDA World Agricultural Outlook Board (WAOB) released its February 2015 World
Agricultural Supply and Demand Estimates (WASDE) report – containing U.S. and World corn supply‐demand
and price 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. corn marketing year will last
from September 1, 2014 through August 31, 2015.
I‐B. Corn Futures Trends for Spring 2014‐February 2015 Period
Since the spring of 2014 CME corn futures prices have trended sharply lower in response to record high
2014 U.S. corn production and other factors in the U.S. and World corn market. Following a high on May 9,
2014 of $5.14 ¾ per bushel, DECEMBER 2014 corn futures trended down to a low of $3.18 ¼ on October 1st –
which has proven to be the fall harvest low in the 2014/15 marketing year. Following the October 1st low, 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.
That same day MARCH 2015 corn futures ended up trading $0.09 higher from the start of the day, closing
at $4.07 ½, up $0.11 ¼ from the DEC 2014 contract expiration price. Since December 12, 2014 the MARCH
2015 contract initially trended higher up to $4.17 on December 29th, but then trended lower over the next
month down to a low of $3.65 ¾ on January 30th. During February 2015, MARCH 2015 corn traded from a low
of $3.70 on February 3rd up to a high of $3.91 ¾ on February 9th, before closing at $3.89 ½ on February 17th.
A time of seasonal market weakness typically has occurred during the months of January‐February in large
crop – low price years. And that has been somewhat the case so far in January‐February 2015. However, to
date the $3.18 ¼ low attained by the CME DECEMBER 2015 corn contract on October 1, 2014 is still markedly
below the Jan‐Feb 2015 low of $3.65 ¾ on January 30th – an indication of the level of underlying demand for
low priced corn in the current 2014/15 marketing year.
The CME MARCH 2015 corn contract is now the “lead” corn futures contract, representing current grain
market price prospects through late February 2015 – being the futures contract which local basis adjustments
are currently …
December 18, 2015
Grain Market Outlook
… 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 “neutrally” to the information in the December 9th USDA reports, and
since has trended sideways in a generally volatile manner.
DEC 2016 CME Corn Futures
Sept. 2014 – Dec. 18, 2015
Close = $3.97 on 12/18/2015
MARCH 2016 CME Corn Futures
Sept. 2014 – Dec. 18, 2015
Close = $3.74 ½ on 12/18/2015
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On the day of the report CME DECEMBER 2016 corn futures prices opened at $3.95 ½ per bushel, trading
within the range of $3.93 ‐ $4.00 ½ during the session, before settling at $3.95 ½ – unchanged for the day
(Figure 1). Since then, DECEMBER 2016 Corn has traded from lows of $3.85 ¾ on December 17th to a high of
$4.01 ½ on December 18th before closing at $3.97 on that same day.
I‐C. Kansas Corn Seasonal Average Price Trends
Seasonal average price index trends for Kansas corn over the last 5, 10, and 15 years indicate definite
seasonal price trends (Figure 2).
Figure 2. Kansas Corn Seasonal Price Index – Last 15 Marketing Years (MY 1999/00 – “Old Crop” MY
2014/15) plus “New Crop” MY 2015/16 Estimate (Source: KSU www.AgManager.info)
Since MY 1999/00 Kansas corn prices have typically been weakest during the harvest month of October,
with an average seasonal price index of 93.4% of the unweighted average Kansas corn price for the September
through August marketing year period. However, Kansas cash corn prices have then trended higher from
harvest lows beginning in November. On average this uptrend in Kansas corn prices has continued from
November through the late spring – early summer months of May‐June the following year – up to highs of
103.9% of the marketing year average price in May, and the maximum of 104.5% in June. The most variability
around these monthly indices have occurred at the beginning quarter (September‐November) and ending
quarter (June‐August) of the September‐August U.S. corn marketing years.
For September through December 2016, U.S. corn prices have followed approximately the same
seasonable pattern, with declining prices in October 2015 and lower prices in November, but a moderate
seasonal increase in December.
I‐D. U.S. Trade Weighted Dollar Index
The Trade Weighted U.S. Dollar Index has been generally trending higher from mid‐July 2011 through
early July 2014 (Figure 3). After an index value of 75.73 on July 1, 2014, the calculated U.S. trade weighted
95.2%
93.4 …
October 27, 2015
Grain Market Outlook
… …
This trend in the value of the U.S. trade weighted dollar index is significant to the U.S. corn and other U.S.
grain markets, because a higher U.S. dollar exchange rate relative to other major currencies generally makes it
more expensive for foreign buyers of U.S. grains to exchange their country’s currencies for U.S. dollars – which
they would then in turn use to purchase U.S. grain exports (i.e., which are denominated or “priced” in U.S.
dollars in U.S. grain markets). Although this is not the only factor negatively impacting U.S. grain exports, it is a
very important one – working against U.S. corn being an affordable, competitive alternative export seller in
World grain trade.
I‐E. U.S. Corn Supply‐Demand
U.S. Corn Acreage, Yield & Production
The USDA’s projections of 2015 U.S. corn planted acres from the March 31st Prospective Plantings report
were adjusted downward in the USDA June 30th Acreage report, and had been used without adjustment by
the USDA through the July 10th, August 12th, and September 11th USDA Crop Production and WASDE reports,
but were adjusted downward in the October 9th USDA reports. The USDA projected that 2015 U.S. corn
planted acreage equaled 88,381,000 acres, down 516,000 acres from a month earlier. This projection of
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88.381 million acres (ma) of 2015 U.S. corn planted is down 2.216 ma (‐2.45%) from 90.597 ma in 2014, down
6.984 ma (‐7.3%) from 95.365 ma in 2013, down 8.910 ma (‐9.16%) from the record high of 97.291 ma in 2012,
and also down from 91.921 ma in 2011 (Table 1 and Figure 4).
The USDA projected that 2015 U.S. corn harvested acreage would be 80,664,000 acres – down 437,000
acres from a month earlier. This projection of 80.664 ma is down 2.472 ma (‐3.0%) from 83.136 ma in 2014,
down 6.787 ma (‐7.8%) from the record high of 87.451 ma in 2013, down 6.701 ma (‐7.7%) from 87.365 ma in
2012, and down from 83.981 ma in 2011 (Table 1 and Figure 4). The USDA implicitly projected that the
proportion of harvested‐to‐planted acreage in 2015 is 91.3%, down from 91.8% in 2014, and from 91.7% in
2013, but up from 89.9% in drought‐stricken 2012.
The USDA forecast 2015 U.S. average corn yields to be 168.0 bushels per acre (bu/ac) – up 0.5 bu/ac from
the USDA’s September projection, but still less than the record high of 171.0 bu/ac in 2014 (Table 1 and Figure
5). Although this October 2015 USDA projection of 2015 U.S. corn yields of 168.0 bu/ac is down from the
record 171.0 bu/ac in 2014, it would still be the second highest U.S. corn yield to date, 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 still up from the previous historic record high of 164.7 bu/ac in 2009.
Based on this combination of USDA projections for 2015 planted acreage (88.381 ma), harvested acreage
(80.664 ma), and yield (168.0 ma – USDA), projected 2015 U.S. corn production would be 13.555 billion
bushels (bb) – down 30 million bushels (mb) from the USDA’s September projections, and down 131 mb from
August. This projection of 13.555 bb U.S. corn production in 2015 is the 3rd highest on record, being down
from the record high of 14.216 bb in 2014, and the 2nd highest amount of 13.829 bb in 2013. However, this
projection of 13.555 bb in 2015 would still be 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 15.316 bb – down 31
mb from September, and down 141 million bushels (mb) from the August WASDE report. This projection of
15.316 bb for “new crop” MY 2015/16 results from beginning stocks of 1.731 bb, projected 2015 production of
13.5585 bb, and projected imports of 30 mb (Table 1 and Figure 6). Since the beginning of the expansion in
U.S. ethanol production in 2006‐2007, total supplies of U.S. corn have been 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, the estimated highest amount on record of 15.479 bb in
“old crop” MY 2014/15, and the forecast 2nd highest amount on record of 15.316 bb in “new crop” MY
2015/16.
The USDA forecast of beginning stocks of 1.731 bb in “new crop” MY 2015/16 is down 1 mb from
September and down 41 mb from the August 12th WASDE report, but up substantially from 1.232 bb in
beginning stocks in “old crop” MY 2014/15, 821 mb in MY 2013/14, 989 mb in MY 2012/13, and 1.128 bb in
MY 2011/12 – while being up at least marginally from 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 1.731 bb is up
considerably from the low of 426 mb that occurred in MY 1996/97, and is the highest amount since 1.967 bb in
MY 2006/07 and 2.114 bb in MY 2005/06 (Table 1 and Figure 6).
Projected imports of 30 mb in “new crop” MY 2015/16 are down 2 mb from 32 mb in “old crop” MY
2014/15, down from 36 mb in MY 2013/14 (the 2nd highest on record), and are down sharply from the record
Page | 6
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, but up from 8 mb in MY 2009/10.
U.S. Corn Use by Category & Total Use
U.S. Ethanol Production and Corn Usage: Projected U.S. corn use for ethanol production of 5.250 bb in
“new crop” MY 2015/16 is unchanged from August‐September, but up 50 mb from July, and is up from 5.207
bb in “old crop” MY 2014/15 (up 2 mb), and up from 5.124 bb in MY 2013/14, 4.641 bb in MY 2012/13, and
5.000 bb in MY 2011/12 (Table 1 and Figures 7‐8).
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 “new crop” MY 2015/16 has ranged from 5.142‐5.268 bb on a
weekly basis since early September 201 …
July 21, 2015
Grain Market Outlook
… ME 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) …
March 17, 2015
Grain Market Outlook
…
The CME DECEMBER 2015 corn contract is now the “next crop” corn futures contract, representing grain
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 in North American and other World 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 March 10th USDA reports, but since then has trended “sideways‐to‐lower”. On the day of
the report CME DECEMBER 2015 corn futures prices opened at $4.12 per bushel, trading within the range of
$4.07 ¾ ‐ $4.14 ¾ during the session, before settling at $4.12 ½ – down $0.00 ½ per bushel for the day (Figure
1). Since then, DECEMBER 2015 corn futures prices has traded from a high of $4.17 ½ on Wednesday, March
11th to a low of $4.04 ½ on Friday, March 13th before closing at $4.04 ¾ that same day.
Page | 3
Figure 1. MAY 2015 and DECEMBER 2015 CME Corn Futures Price Charts (electronic trade) …
December 2, 2015
Grain Market Outlook
m 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 …
September 1, 2015
Grain Market 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 …