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July 15, 2014
Grain Market Outlook
…
SEPT 2014 CME eCorn Futures
Nov. 13, 2013 – July 14, 2014
Close = $3.81 ½ on 7/14/2014
DEC 2014 CME eCorn Futures
Oct. 17, 2013 – June 17, 2014
Close = $3.88 ¼ on 7/14/2014
Page | 3
“New crop” DEC 2014 corn futures contract prices also responded in a negative manner to the
information in the July 11th USDA reports. On the day of the report, CBOT DEC 2014 corn futures prices
opened at $3.92 ½ per bushel, and traded as high as $3.94 ¾ and as low as $3.82 ½ during the session, before
settling at $3.84 ¾ – also down $0.08 for the day (Figure 1). On Monday, July 14th DEC 2014 corn futures
prices first opened trade lower at $3.83 ½, trading in a range from a low of $3.80 ¼ to a high of $3.89 ¼, before
closing at $3.88 ¼ ‐ up $0.03 ½ for the day. The low price of $3.80 ¼ was also a record historic low for the
DECEMBER 2014 corn futures contract.
I‐C. U.S. Corn Supply‐Demand
U.S. Corn Acreage, Yield & Production
Following the results of June 30th USDA NASS Acreage report, the USDA projected that 2014 U.S. corn
total planted acreage would be 91.641 million acres (ma), down 50,000 acres from the March 31st USDA NASS
Prospective Plantings Report, and down from 95.365 ma in 2013, 97.155 ma in 2012, and 91.936 ma in 2011
(Table 1 and Figure 2). In addition, the USDA projected 2014 U.S. corn harvested acreage to be 83.839 ma,
down from its June 11 WASDE report projection of 84.3 ma, and down from 87.668 ma in 2013, and 87.365
ma in 2012, but up from 81.446 ma in 2011. The 2014 proportion of harvested‐to‐planted acreage for all U.S.
corn is projected to be 91.49%, down from 91.9% in to 2013, but up from 89.9% in 2012 and 91.4% in 2011.
The projected 2014 U.S. average corn yield of 165.3 bushels per acre (bu/ac) is unchanged from the May‐
June WASDE reports, and would be a record high, up from 158.8 bu/ac in 2013, the drought affected 2012 low
yield of 123.4 bu/ac., and the historic high of 164.7 bu/ac in 2009 (Table 1 and Figure 3). Based on these 2014
acreage and yield forecasts, the USDA projected 2014 U.S. corn production to be 13.860 billion bushels (bb) –
which would be the second highest amount on record, following the record high of 13.925 bb in 2013, 10.780
bb in 2012, 12.360 bb in 2011, 12.447 in 2010, and 13.092 bb in 2009 (Table 1).
U.S. Corn Total Supplies
The USDA estimates that total supplies of U.S. corn for “new crop” MY 2014/15 are 15.136 bb – resulting
from beginning stocks of 1.246 bb, projected 2014 production of 13.860 bb, and projected imports of 30
million bushel (mb) (Table 1). Total supplies of 15.136 bb in “new crop” MY 2014/15 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 (3rd largest),
14.182 bb in MY 2010/11 (4th largest), 13.517 bb in MY 2011/12, 11.932 bb in MY 2012/13, and 14.781 bb in
“current year” MY 2013/14 (2nd highest).
Beginning stocks of 1.246 bb in “new crop” MY 2014/15 are up 100 mb from the June WASDE report, and
up sharply from both 821 mb in “current year” MY 2013/14, and from 989 mb in MY 2012/13. This amount of
beginning stocks is up considerably from the low of 426 mb occurring in MY 1996/97. Imports of 30 mb in
“new crop” MY 2014/15 are the third highest on record, and are projected to be down from 35 mb in “current
year” MY 2013/14 (the 2nd highest), and also down sharply from the record high of 162 mb in MY 2012/13.
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 5.050 bb in
“new crop” MY 2014/15 is down from to 5.075 bb in “current year” MY 2013/14 (up 25 mb from the June
Page | 4
WASDE report), while being up from 4.648 bb in MY 2012/13, and 5.000 bb in MY 2011/12 (Figure 4). 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 developed 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
4.638‐5.418 bb on a weekly basis since early September 201 …
May 3, 2016
Grain Market Outlook
years. The “current” 2015/16 marketing year for U.S. grain sorghum began on 9/1/2015
and will last through 8/31/2016. The March 9th and April 12th USDA WASDE reports followed earlier U.S. corn
and grain sorghum supply‐demand and price projections for the “next crop” 2016/17 marketing year (i.e., MY
2016/17) provided by the USDA on December 14, 2015 in preparation for the 2016 Agricultural Outlook
Forum in Arlington, Virginia on February 25‐26, 2016.
Prior to the April 12th USDA WASDE report, on March 31st the USDA National Agricultural Statistics
Service (NASS) released its 2016 Prospective Plantings and March 1st Quarterly Grain Stocks reports. The
USDA used information from the Quarterly Grain Stocks report to make adjustments in the U.S. grain sorghum
supply‐demand balance sheet. Information from the 2016 Prospective Plantings report has been used in this
report to update the USDA’s grain sorghum production and supply‐demand projections for to provide KSU‐
adjusted USDA projections “next crop” MY 2016/17. These adjustments anticipate what the USDA is likely to
do if it follows it’s usual practice in the upcoming May 10th USDA WASDE report in releasing its own updated
U.S. grain sorghum supply‐demand and price projections for “next crop” MY 2016/17.
I‐B. Kansas Grain Sorghum Seasonal Average Price Trends
Seasonal average price index trends for Kansas grain sorghum over the last 15 years indicate definite
seasonal price patterns (Figure 2). In the “current” 2015/16 marketing year for U.S. grain sorghum, price
movements from month‐to‐month have been inconsistent with historic seasonal price patterns that have
occurred over the previous fifteen grain sorghum marketing years in Kansas. Sorghum prices in the U.S. have
declined on a month‐to‐month basis from the beginning of “current crop” MY 2015/16 in September 2015
through February 2016. After a marginal recovery higher in March 2016, prices in April fell to new marketing
year lows, but are projected to trend higher from May through August.
Since MY 1999/2000 Kansas grain sorghum prices have typically been weakest during the harvest month of
October, with an average seasonal price index of 93.3% of the unweighted average Kansas sorghum price for
the September‐August marketing year. Kansas cash grain sorghum prices have then on average trended
consistently higher from November harvest lows through the spring months of March‐April‐May – up to highs
in the range of 104.0%‐104.4% of the marketing year average price. Kansas grain sorghum prices have then
tended to decline moderately in the month of June, and then to trend lower during July‐August. The most
variability has occurred at the beginning of harvest (September) and ending quarter (June‐July‐August) of the
last fifteen (15) September‐August U.S. sorghum marketing years.
Page | 4
Figure 2. Kansas Grain Sorghum Seasonal Price Index: MY 1999/00 – “Old Crop” MY 2014/15 plus
USDA Estimates for “Current Crop” MY 2015/16 (Sources: www.AgManager.info & USDA ERS)
I‐C. U.S. Grain Sorghum Supply‐Demand
U.S. Grain Sorghum Acreage, Yield & Production
Table 1 shows the USDA U.S. grain sorghum supply‐demand balance sheet for the MY 2009/10 through
“current crop” MY 2015/16 period, with KSU‐adjusted USDA projections and KSU forecasts for “next crop” MY
2016/17. Grain sorghum planted and harvested planted acreage in the U.S. for the 2000 – 2016 period are
shown in Figure 2, with U.S. grain sorghum yields for 1973 through 2016 are shown in Figure 3. United States’
grain sorghum total supplies for the 2000/01 through projected 2016/17 marketing years are shown in Figure
4. Table 1 and Figures 2‐4 show the growth in U.S. grain sorghum production and total supplies since the
drought‐impacted year of MY 2012/13 through “current crop” MY 2015/16, and the USDA forecast of smaller
U.S. grain sorghum acreage, production and total supplies in “next crop” MY 2016/17.
U.S. Grain Sorghum Acres
In its March 31st Prospective Plantings report, the USDA projected that in 2016 U.S. grain sorghum planted
area will equal 7.216 million acres or ‘ma’, compared to 8.459 ma in 2015, 7.138 ma in 2014, 8.076 ma in 2013,
and 6.401 ma in 2012 (Table 1 and Figure 2). Using a historic average (2000‐2015) U.S. harvested‐to‐planted
acreage of 83.79%, 2016 U.S. grain sorghum harvested acreage is projected at 6.046 ma, compared to 7.851
ma in 2015, 6.401 ma in 2014, and 6.401 ma in 2013 (Table 1 and Figure 2). This KSU‐adjusted USDA crop
acreage scenario is given a 50% likelihood of occurring by KSU estimates.
For both the “normal crop” A and “short crop” B KSU Scenario projections, 2016 U.S. grain sorghum
planted acres are projected to be 7.000 ma, down 216,000 acres from the March 31st USDA projection, while
2016 U.S. sorghum harvested acres are forecast to be 5.865 ma – down 181,000 acres versus the KSU‐adjusted
94.1 …
June 22, 2016
Grain Market Outlook
Page | 3
I. U.S. Wheat Market Situation & Outlook
I‐A. June 10th USDA Crop Production & WASDE Reports
On June 10th the USDA National Agricultural Statistics Service (NASS) released its June 2016 Crop
Production report – containing U.S. winter wheat harvested acreage, yield and production forecasts for 2016 –
with information specific to the 2016 U.S. hard red winter (HRW) wheat, soft red winter (SRW) wheat, and
white winter (WW) wheat crops.
The NASS 2016 U.S. winter wheat production forecast was derived by USDA using a combination of a) an
objective yield survey, and b) a farmer operator survey – both conducted during the May 25 – June 7 period.
The objective yield survey was conducted in 10 states that accounted for 68% of 2015 U.S. winter wheat
production. Farm operators were interviewed to update previously reported acreage data, and to seek
permission to randomly locate sample plots in selected winter wheat fields. Projected biological yields were
calculated from these farmer plots – assessing number of wheat stalks, heads in late boot stage, and the
number of emerged heads to develop a count of the number of heads that would be harvested. These same
plots had been originally surveyed in late April – early May to monitor wheat development and update the
USDA’s yield projections on a plot‐by‐plot basis, and will be revisited a …
July 17, 2017
Grain Market Outlook
s in the northern plains states of North Dakota, South Dakota, and Montana as well as parts
of Nebraska and Iowa may have a negative impact on 2017 U.S. corn production. Also, corn production in
2017 may be negatively affected by carryover impacts from delayed plantings in the central Corn Belt earlier in
Spring 2017, and periods of high temperatures that may have affected corn pollination in the first half of July.
Kansas Cash Corn Prices & Basis Bids
Cash corn bids at major grain elevators ranged from $3.36 ($0.40 under SEPT futures) to $3.76 ($0.00 under or
par with futures) in Western Kansas and $3.21 ¼ ($0.55 under) to $3.41 ¼ ($0.35 under) in Central Kansas on
Friday, July 14th. This represents a marked increase since October‐December 2016 when corn price bids
statewide had fallen below $3.00 per bushel – down to $2.66‐$2.96 on December 23rd – although not as low as
marketing loan rates near $2.05 (central KS) to $2.19 (western KS) per bushel. Cash corn price bids in east
central and northeast Kansas – near river terminal locations – were near $3.44 ‐ $3.46 on July 14th, up from the
range of $3.26‐$3.28 per bushel on 12/23/2016. Cash corn bids at Kansas ethanol plants on July 17th ranged
from $3.52 ¼ ($0.24 under) to $4.18 ¼ ($0.42 over) – indicating continuing strength in ethanol demand for
corn in Kansas and nationwide. While the “large supply and tight storage availability” situation still
…
September 5, 2017
Grain Market Outlook
… World Corn Price$
Page | 7
on a monthly basis was $1.66 per bushel – occurring in October 1986 during the U.S. farm crisis years. A
historic high of $8.46 per bushel occurred in July 2012 – in the midst of the extensive 2012 drought in the
United States. Over the January 1980 through June 2017 period the global price of corn has trended higher at
a rate of +$0.0062 per bushel per month. Since January 2007 the global price of corn averaged $5.16, with a
median price of $4.48, compared to an average of $4.01 in June 2017.
Since 1980 there has been a negative correlation of ‐0.523 between the U.S. Trade Weighted dollar index
and the global price of corn. This indicates that the global price of corn tends to have a negative or inverse
relationship over‐time with the value of the U.S. dollar.
The higher value of the U.S. trade weighted dollar index since mid‐2014 has been a negative factor in
export markets for U.S. corn and other U.S. grains (especially for wheat). Conversely, the moderation in U.S.
dollar exchange rates since May‐June of this year has provided support for U.S. export trade.
A higher U.S. dollar exchange rate relative to other major World 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 that has been negatively affecting U.S. grain exports, it
is a very important one – working against U.S. corn and especially wheat from being affordable, competitive
alternative export alternatives in the World grain trade.
U.S. Corn Acreage, Yield & Production
Table 1 shows the USDA U.S. corn supply‐demand balance sheet for the MY 2008/09 through “old crop”
MY 2016/17 period, with a preliminary USDA projection for “new crop” MY 2017/18. Table 1a focuses on
“new crop” MY 2017/18 with the August 10th USDA projection plus alternative possible market scenarios from
Kansas State University. United States’ corn harvested and planted acreage for the year 2000 – projected 2017
period are shown in Figure 4, with U.S. corn yields for 2005‐2017 shown in Figure 5.
United States’ corn production & total supplies for the 2001/02 through projected “new crop” 2017/18
marketing years are shown in Figure 6. Table 1 and Figures 4‐6 illustrate the growth in U.S. corn production
and total supplies since the drought‐impacted short crop year of MY 2012/13, and the most recent forecast by
the USDA of a moderate decline in U.S. corn supplies in “new crop” MY 2017/18.
U.S. Corn Planted Acres
In the June 30, 2017 USDA Acreage and August 10th Crop Production and WASDE reports 2017 U.S. corn
planted acres are projected to be 90.886 million acres or ‘ma’. This projection of 90.886 ma for 2017 is down
3.118 ma (down 3.3%) from 94.004 ma of 2016, and compares to 88.019 ma in 2015, 90.597 ma in 2014,
95.365 ma in 2013, the record high of 97.291 ma in 2012, and 91.936 ma in 2011 (Table 1 and Figure 4). The
USDA’s forecast scenario for “new crop” 2017 U.S. corn harvested acres of 90.886 ma given a 50% probability
of occurring by Kansas State University Extension (KSU Extension Ag Economist Daniel O’Brien).
An alternative KSU projection of “new crop” 2017 U.S. corn planted acres of 89.886 ma (1.000 ma less
than USDA and accounting for prevented planting acreage caused by wet spring conditions in 2017) are
estimated to have a combined 50% probability of occurring (Table 1a).
Page | 8
U.S. Corn Harvested Acres
In the June 30, 2017 USDA Acreage and August 10th Crop Production and WASDE reports 2017 U.S. corn
harvested acres are projected to be 83.496 million acres or ‘ma’. This early projection of 83.496 ma in 2017 is
down 3.252 ma (down 3.7%) from 86.748 ma in 2016, up from 80.753 ma in 2015 and 83.136 ma in 2014, but
down from 87.451 ma in 2013 (the record high), 87.365 ma in 2012 (2nd highest), and 83.879 ma in 2011 (Table
1 and Figure 4). The USDA’s forecast of the “new crop” 2017 U.S. corn harvested acres of 83.496 ma is
estimated to have a 50% probability of occurring by Kansas State University Extension.
An alternative KSU projection of “new crop” 2017 U.S. corn harvested acres of 82.577 ma (0.919 ma less
than USDA and accounting for prevented planting from wet spring conditions in 2017) are also estimated to
have a combined 50% probability of occurring (Table 1a).
Figure 4. U.S. Corn Planted Acreage for 2000‐2017 as of the June 30, 2017 USDA NASS Acreage & August 10,
2017 WASDE reports, with an alternative KSU Estimate for 2017
U.S. Corn Yield
In its August 10th WASDE report the USDA forecast 2017 U.S. corn average yields to be 169.5 bu/ac (Table
1 and Figure 5) – down from 170.7 in June‐July. This yield projection for 2017 is down from the 2016 record
high of 174.6 bu/ac, while being up from 168.4 bu/ac in 2015 (3rd highest on record). The 2017 projection of
169.5 bu/ac is also less than the previous record high of 171.0 ma in 2014, while being up from lows of 158.1
bu/ac in 2013 and 123.1 bu/ac in the drought‐ravaged year of 2012. The USDA’s forecast of the “new crop”
2017 U.S. corn yield of 170.7 bu/ac is estimated to have a 50% probability of occurring.
Three (3) alternative probability‐weighted KSU projections for “new crop” 2017 U.S. Corn Yields include
the following forecasts (Table 1a):
1) a 36% probability of a 2017 U.S. corn long term trend yield of 167.3 bu/ac (2.2 bu/ac less than USDA)
93.5 …