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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).
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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 201 …
March 20, 2015
Grain Market Outlook
to $9.31 ¾ ($0.30 under basis) on Thursday, March 19th … to $8.96 ($0.50 under basis). “Current
crop” MAY 2015 soybean futures closed at $9.62 ½ per bushel that day, with “next year’s crop” NOVEMBER
2015 soybean futures closing at $9.47 ¾ per bushel.
Given that the USDA projections for “current crop” MY 2014/15 and “next crop” MY 2015/16 indicate that
a) Chinese soybean imports will continue to be strong, and b) South American soybean production to be
harvested in early‐mid 2015 will again be record high, there is no indication yet that any change is expected in
these projected trends in production, exports or imports in the broader World soybean market. The
Page | 4
possibility of weather‐related soybean production problems in South America during the spring of 2015, or in
the United States during the summer‐fall of 2015 could impact these trends. However, until such potential
production problems actually do occur the World soybean market will likely assume that these “predominant
trends” will continue into the foreseeable future.
I‐C. Soybean Futures Trends Since the March 10th USDA Reports
“Current crop” MAY 2015 soybean futures contract prices responded in a negative manner to the
information in the March 10th USDA reports (Figure 1). On the day of the reports CME MARCH 2015 futures
prices opened at $9.92 ½ /bu, and traded as high as $9.94 and as low as $9.81 ¾ during the session, before
settling at $9.84 ½ – down $0.08 ¾ for the day. Since then MAY 2015 soybean futures prices have traded
within the range from a high of $9.97 ½ on March 11th and 12th, to a low of $9.53 ½ on March 17th and 18th,
before closing at $9.73 ¾ on Thursday, March 20th.
Figure 1. MAY 2015 and NOV 2015 CME Soybean Futures Price Charts (electronic trade) …
August 31, 2016
Grain Market Outlook
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U.S. Corn Yields (1973‐2016)
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U.S. Corn Production
Based on these assumptions, the USDA projection of 2016 U.S. corn production is 15.153 billion bushels
(bb), up from 13.601 bb in 2015, the record high of 14.216 bb in 2014, and 13.829 bb in 2013 (Table 1 and
Figure 6). This USDA projection is given a 20% probability of occurring (by KSU Extension Ag Economist Daniel O’Brien).
With the same planted and harvested acreage figures and lower yields, there are three alternative
probability‐weighted KSU U.S. corn production scenarios for 2016 (Table 1). An alternative KSU “Minor Crop
Problems – 14.9 bb” Scenario projection – given a 35% chance of occurring – is for 2016 U.S. corn production
to be 14.887 billion bushels (bb) – down from the USDA’s forecast of 15.153 bb, but still the highest on record.
A second KSU “Moderate Crop Problems – 14.5 bb” Scenario projection – also given a 35% chance of
occurring – is for 2016 U.S. corn production to be 14.540 bb – also the highest on record if attained. A third
KSU “More Serious Crop Problems – 14.2 bb” Scenario projection – given a 10% chance of occurring – is for
2016 U.S. corn production to be 14.194 bb – which would be the 2nd highest on record if attained, behind
14.216 bb in MY 2014/15.
U.S. Corn Total Supplies
Based on these assumptions, the USDA projection of 2016 U.S. corn total supplies is a record high 16.909
bb, up from 15.397 bb in “old crop” MY 2015/16, the current record high of 15.479 bb in MY 2014/15, and
14.686 bb in MY 2013/14 (Table 1 and Figure 6). This USDA projection is given a 20% probability of occurring.
With the same planted and harvested acreage figures and lower yields, there are three alternative
probability‐weighted KSU U.S. corn supply scenarios for “new crop” MY 2016/17 (Table 1). An alternative
KSU “Minor Crop Problems – 14.9 bb” Scenario projection – given a 35% chance of occurring – is for “new
crop” MY 2016/17 U.S. corn total supplies to be 16.743 bb – down from the USDA’s forecast of 16.909 bb, but
still the highest on record. A second KSU “Moderate Crop Problems – 14.5 bb” Scenario projection – also
given a 35% chance of occurring – is for “new crop” MY 2016/17 U.S. corn total supplies to be 16.396 bb. A
third KSU “More Serious Crop Problems – 14.2 bb” Scenario projection – given a 10% chance of occurring – is
for “new crop” MY 2016/17 U.S. corn supplies to be 16.137 bb.
U.S. Corn Use by Category & Total Use
U.S. Ethanol Production & Corn Usage
The USDA projected U.S. corn use for ethanol production of 5.275 bb in “new crop” MY 2016/17 – a new
record high, up from the record highs of 5.200 bb in both “old crop” MY 2015/16, and in MY 2014/15. That
said, U.S. corn use for ethanol has remained steadily in the range of 5.000 to 5.200 bb for the MY 2010/11
through MY 2015/16 period, except for a decline to 4.641 bb during the “short crop / high corn price” 2012/13
marketing year (Table 1 and Figures 7 and 8).
KSU projections of U.S. corn use for ethanol production range from 5.225 bb to 5.275 bb for three
scenarios of varying 2016 U.S. corn production and total supplies (Table 1).
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Figure 6. United States’ Corn Production & Total Supplies: MY 2004/05 through MY 2016/17 as of the
August 12, 2016 USDA WASDE
Figure 7. United States’ Corn Use & Ending Stocks: MY 2004/05 through MY 2016/17 as of the August
12th USDA WASDE Report
Figure 8 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, these calculations indicate that the
equivalent projected annual rate of U.S. corn used for ethanol production for “old crop” MY 2015/16 has
ranged from 5.060‐5.641 bb on a weekly basis up through the week ending August 19, 2016.
The largest amounts of U.S. ethanol production and subsequent corn use to date in the “old crop” MY
2015/16 marketing year have occurred during the weeks ending November 20th (5.526 bb marketing year corn
use rate), June 10th (5.553 bb), June 15th (5.641 bb), August 5th (5.581 bb), August 12th (5.641 bb), and August
0.958 …
September 6, 2016
Grain Market Outlook
49 per. Mov. Avg. (Trade‐Wtd U.S. Dollar Index (1973=100) )
Page | 6
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.
wheat being an affordable, competitive alternative export seller in World grain trade.
U.S. Wheat Production Acreage, Yield & Production
U.S. Wheat Planted Acreage
United States’ wheat acreage figures in the August 12th USDA Crop Production and WASDE reports
followed exactly from the June 30th USDA NASS 2016 Acreage report. The USDA forecast that 2016 U.S. total
wheat planted acres would be 50.816 million acres (ma), down 3.828 ma (‐7.0%) from 54.644 ma in 2015,
down 10.6% from 56.841 ma in 2014, and down 9.6% from 56.236 ma in 2013 (Table 1 and Figures 4 & 5).
An early 2017 KSU projection is for All U.S. Wheat Planted Acres in 2017 to decline 5% on a year‐over‐
year basis from a year ago ‐ dow …
December 29, 2017
Grain Market Outlook
… … 0.58 under. Kansas cash soybean basis levels are $0.10 to $0.20 /bu weaker than the last three years.
B. Key World Soybean Supply‐Demand Findings in the December 12th USDA WASDE Report
For “new crop” 2017/18 marketing year (MY) beginning on September 1, 2017, the USDA projected….
First, that World soybean total supplies would be 445.1 million metric tons (mmt) with total use of 344.7 mmt
for “new crop” MY 2017/18 – up 3.7% and 4.6%, respectively, from a year earlier to record high levels.
Second, that World soybean exports will also trend up to a record high to 152.45 mmt in the “new crop”
2017/18 marketing year – up from previous records of 147.3 mmt last year, and 132.55 mmt two years ago.
World soybean exports have been growing at a 9.4% rate annually since the 2007/08 marketing year.
Third, that World soybean ending stocks would be a record high 98.32 mmt in “new crop” MY 2017/18 ‐ up
from the previous record of 96.62 mmt in MY 2016/17, and from 77.9 mmt in MY 2015/16. World soybean
ending stocks have also been growing ‐ at an 8.8% rate annually since the 2007/08 marketing year.
Fourth, that World soybean percent ending stocks‐to‐use (S/U) would be 28.5% ‐ the 2nd highest on record and
down from the record high of 29.3% last year, and up from 24.8% and 25.7% the two years prior. In response
to growing World demand, World soybean percent (%) ending stocks‐to‐use have also been growing – by
0.31% annually since the 2006/07 marketing year.
C. U.S. Soybean Supply/Demand for “New Crop” MY 2017/18 & “Next Crop” MY 2018/19
The USDA released their Soybean production, supply‐demand and price projections for the U.S. for “new crop”
MY 2017/18 in the December 12th WASDE report, and for “next crop” MY 2018/19 in its November 28th Long
Term Agricultural Projections.
U.S. soybean plantings are forecast to be a record high 91.000 million acres (ma) in 2018, up from 90.207 ma in
2017, and 83.433 ma in 2016. Harvested acres are forecast at 90.1 ma in 2018 (99.01% harvested‐to‐planted),
up from 89.471 ma (99.18% harvested‐to‐planted) in 2017, and up from 82.696 ma in 2016.
The 2018 U.S. average soybean yield is forecast at 48.4 bu/ac, down from 49.5 bu/ac in 2017, and from the
2016 record of 52.0 bu/acre.
Page | 2
Soybean production in the U.S. in 2018 is forecast to be 4.360 billion bushels (bb), down from the record of
4.425 bb in 2017, but up from 4.296 bb in 2016. After adjustments from the December 12th WASDE report,
projected “next crop” MY 2018/19 total supplies are forecast at 4.830 bb, up from 4.752 bb in “new crop” MY
2017/18, and from 4.515 bb in MY 2016/17. Record high U.S. Soybean total use of 4.435bb is forecast for
“next crop” MY 2018/19, up from 4.306 bb in “new crop” MY 2017/18, and from 4.214 bb in MY 2016/17.
With previously mentioned KSU adjustments from the December 12th WASDE report, the USDA projected
“next crop” MY 2018/19 ending stocks to be 395 million bushels (mb) (8.91% stocks/use), down from 445 mb
in “new crop” MY 2017/18 (10.33% stocks/use), but up from 301 mb in MY 2016/17 (7.14% stocks/use).
United States’ soybean prices are projected to average $9.40 /bu in “next crop” MY 2018/19, up from $9.30
/bu in “new crop” MY 2017/18, but down from $9.47 in MY 2016/17, and comparable to $8.95 /bu in MY
2015/16, and $10.10 /bu in MY 2014/15. It is estimated by Kansas State University that these USDA
projections for “new crop” MY 2017/18 have an 80% probability of occurring.
D. Two Alternative KSU U.S. Soybean S/D Forecasts for “New Crop” MY 2017/18
To represent possible alternative outcomes from the USDA’s December 12th projection, two potential KSU‐
Scenarios for U.S. soybean supply‐demand and prices are presented for “new crop” MY 2017/18.
KSU Scenario 1) “Higher U.S. Soybean Exports” Scenario (10% probability) assumes for “new crop” MY
2017/18 that the following outcome occurs. This scenario assumes that there were 90.281 ma planted,
99.18% harvested‐to‐planted, 89.545 ma harvested, 49.5 bu/ac average yield, 4.432 bb production, 4.758 bb
total supplies, 2.400 bb exports, 2.000 bb domestic crush, 140 mb seed & residual use, 4.536 bb total use, 222
mb ending stocks, 4.89% Stocks/Use, & $11.50 /bu U.S. soybean average price.
KSU Scenario 2) “Lower U.S. Soybean Exports” Scenario (10% probability) assumes for “new crop” MY
2017/18 that the following outcome occurs. This scenario assumes that there were 90.281 ma planted,
99.18% harvested‐to‐planted, 89.545 ma harvested, 49.5 bu/ac average yield, 4.432 bb production, 4.758 bb
total supplies, 2.100 bb exports, 1.900 bb domestic crush, 140 mb seed & residual use, 4.136 bb total use, 622
mb ending stocks, 15.04% Stocks/Use, & $7.50 /bu U.S. soybean average price.
E. Perspectives on World Soybean Market Trends
Since 2014, World soybean market prices have been declining in response to a developing “large crop – low
price” supply‐demand regime, caused by consecutive record World soybean production years for 2014 through
2017, with large crops regularly occurring in South America and the United States. Strong demand for soybean
imports from China, Japan, and other Asian countries have supported World soybean prices.
Longer term, from MY 2007/08 to “new crop” MY 2017/18, the USDA forecasts a strong upward trend in
World soybean production (up 5.9% annually) which will have “out‐paced” the increase in World soybean use
(up 5.0% per year) if it holds true. As long as growth in World soybean production continues to outpace World
soybean usage, then World soybean prices will continue at their current “moderate” levels.
A key World soybean market issue for the first half of 2018 will be to learn or discover if weather or disease
problems in South America end up driving southern hemisphere soybean production low enough to alter the
existing “large supply – buyer’s market” situation that now exists. Unless or until production problems in the
U.S. or South America – World soybean price prospects seem destined to remain limited.
…
March 1, 2016
Land Buying and Valuing, Land Use Value Research
used harvested acres as the basis for calculating average yield … Kansas State University to use basis adjustments to calculate … landlord
shall be used as the basis for determining agricultural …
August 1, 2018
Breakout Sessions
secondary school– Per-student basis
IRC §529 Plans
27WASHBURN LAW
Standard … depreciation on class life basis– Elect out of deferred … applied on an entity-by-entity basis– Must then use ADS on farm …
April 30, 2024
Ag Law Issues
by completely forgoing the basis of … because hydrology is the basis for a change in wetland determination … the request simply on the basis of
the statute which plainly …
January 1, 2015
see if statement) to $/lb basis for easier sumproduct process …
February 17, 2014
Grain Market Outlook
March 2014 CME eCorn Futures
Aug. 26, 2013 – Feb. 14, 2014
Close of $4.45 ¼ on Fri., Feb. 14th
December 2014 CME eCorn Futures
Aug. 26, 2013 – Feb. 14, 2014
Close of $4.59 ¾ on Fri., Feb. 14th
Page | 3
I‐D. USDA U.S. Corn Supply‐Demand for the 2013/14 Marketing Year
U.S. Corn 2013 Acres, Yield & Production
The USDA left unchanged its projection of 2013 U.S. corn production of 13.925 billion bushels (bb), up
from a drought‐affected short crop of 10.780 bb in 2012. This USDA projection is based on record high planted
acreage of 95.365 million acres (ma), and harvested acreage of 87.668 ma (Table 1 and Figure 2). The USDA
also maintained its projection of an average U.S. corn yield of 158.8 bushels per acre (bu/ac). The January‐
February USDA 2014 projection of 158.8 bu/ac in average 2013 U.S. corn yields is down from the initial USDA
projection of 163.6 bu/ac at the February 22, 2013 USDA Outlook Forum (Table 1 and Figure 3).
Projected 2013 U.S. corn production of 13.925 bb is a record high, being up 3.145 bb ( 29%) from 10.780
bb in 2012, and up 13% from 12.360 bb in 2011 (Table 1). If any further changes are eventually to be made in
the projection of 2013 U.S. corn production by the USDA, they may not be done until the 2014 Crop
Production Summary in January 2015 if the USDA follows its usual procedures for making such adjustments.
U.S. Corn Total Supplies in “Current” MY 2013/14
The USDA estimates that total supplies of U.S. corn for “current” MY 2013/14 are 14.781 bb – resulting
from beginning stocks of 821 mb, projected 2013 production of 13.925 bb, and projected imports of 35 mb
(Table 1). Total supplies of 14.781 bb in MY 2013/14 would be a record high, comparable to 14.362 bb in MY
2007/08, 13.729 bb in MY 2008/09, 14.774 bb in MY 2009/10 (2nd largest), 14.182 bb in MY 2010/11 (3rd
largest), 13.517 bb in MY 2011/12, and 11.932 bb in “Last year’s” MY 2012/13. Beginning stocks of 821 mb are
the lowest since 426 mb in MY 1996/97, and substantiate the tightness of U.S. corn supplies during June‐
August 2013.
U.S. Corn Total Use & Use by Category in “Current” MY 2013/14
Total Use of U.S. corn for “current” MY 2013/14 is projected to be 13.300 bb – up 150 from January, up
250 mb from the December WASDE, and up 350 mb from November, while being up 19.7% from 11.111 bb in
“last year’s” MY 2012/13 (Table 1 and Figures 4 & 6). United States’ total corn use of 13.300 bb in “current”
MY 2013/14 would be the highest on record, comparable to 12.737 bb in MY 2007/08 (4th highest), 12.056 bb
in MY 2008/09, 13.066 bb in MY 2009/10 (2nd highest), 13.055 bb in MY 2010/11 (3rd highest), 12.528 bb in MY
2011/12, and 11.111 bb in “last year’s” MY 2012/13.
U.S. Ethanol Production and Corn Usage: Projected U.S. corn use for ethanol production of 5.000 bb in
“current” MY 2013/14 is up from 4.648 bb in “last year’s” MY 2012/13, while being equal to 5.000 bb in MY
2011/12. Figure 5 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 by Kansas State
University. Assuming 2.75 gallons of ethanol produced per bushel of corn, these calculations indicate that the
equivalent projected annual rate of U.S. corn used for ethanol production for “current” MY 2013/14 has
ranged from 4.64‐5.26 bb on a weekly basis since early September 201 …