Search
Displaying 2291 - 2300 of 5415
September 23, 2022
Meat Demand Research Studies
residents increasingly face a net economic decline as their earnings … adjustments
besides general economic inflation may well alter … many residents a host of economic questions arise including …
June 1, 2015
Land Buying and Valuing
Land Economics 1 — Revised June 2015
Kansas … Department of Agricultural Economics at
Kansas State University … www.agmanager.info/farmmgt/land/land_buy
Department of Agricultural Economics — www.agmanager.info
Kansas …
January 1, 2009
Animal ID & Traceability
… by, Graduate Student Agricultural Economics, Kansas State University … uyvetter, Professor, Agricultural Economics, Kansas State University …
February 18, 2013
Risk Management Strategies
Professor
Agricultural Economics
Kansas State University
,
Sponsored … Mark II: The taxpayer and economic welfare costs of price
loss …
June 20, 2016
Grain Market Outlook
ests approach requiring both commercial and on‐farm storage space, 2)
continued stronger‐than‐anticipated use of 2015 crop U.S. corn in ethanol production, livestock feeding or
exports resulting from low U.S. feedgrain prices and moderating U.S. dollar values (exports), and 3) the
possibility of broader U.S. and Foreign economic and financial system disr …
July 18, 2014
Grain Market Outlook
… bean market will be sideways‐
to‐weaker at best from now through fall harvest, with the possibility of falling below $10.00 during the most
intensive harvest periods. However, ongoing World demand for soybeans and soybean products and the
stimulative impact of lower prices on buyers, production uncertainty in South America through November‐
February, and uncertainty in World energy and economic markets may provide baseline‐level support for
soybean markets through the winter and early spring months.
Page | 3
I‐B. July 2014 USDA Reports & Projections for “New Crop” MY 2014/15
On July 11, 2014 the USDA World Agricultural Outlook Board (WAOB) released its July 2014 World
Agricultural Supply and Demand Estimates (WASDE) report – containing U.S. and World soybean supply‐
demand and price projections for both the “old crop” 2013/14 marketing year as well as for “new crop” MY
2014/15. The “old crop” 2013/14 marketing year will end on August 31, 2014, while the “new crop” 2014/15
U.S. wheat marketing year will last from September 1, 2014 through August 31, 2015. The July 11th WASDE
report made use of the information released in the June 30th National Agricultural Statistical Service (NASS)
Acreage and Quarterly Stocks reports. The July 11th WASDE report’s 2014 U.S. soybean production forecast
was based on the projected planted and harvested acreage totals in the June 30th USDA NASS Acreage report,
while information in the June 30th USDA NASS Quarterly Stocks report was used in calculating adjustments to
“old crop” MY 2013/14 U.S. corn usage and ending stocks in the July 11th USDA WASDE report.
The upcoming August 12th USDA NASS Crop Production report will provide the first in‐field survey based
forecast of the 2014 U.S. soybean crop. This 2014 production estimate will provide the basis for the August
11th WASDE report projection of U.S. soybean supply‐demand and prices.
I‐C. Soybean Futures Trends Since the July 11th USDA Reports
The “old crop” or “current” AUGUST 2014 soybean futures market contract responded in a volatile and
ultimately positive manner to the information in the July 11th USDA reports. On the day of the report – Friday,
July 11th – Chicago Board of Trade (CBOT) JULY 2014 soybean futures prices opened at $12.32 ½ per bushel,
and traded as high as $12.38 ¼ and as low as $11.59 ¼ during the session, before settling at $11.95 ¾ – down
$0.37 for the day (Figure 1). 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. Since then AUGUST 2014 soybean futures prices
have traded generally lower – from a high of $12.11 ½ on July 14th, to a low of $11.53 ¼ on July 15th before
closing at $11.76 ¾ on Friday, July 18th. Prior to the July 11th report, AUGUST 2014 soybean futures had
trended sharply higher from a low of $11.95 ¾ on January 30, 2014 to a high of $14.59 on May 22nd, and then
after trending lower, another high of $13.92 ¼ on June 22nd, before declining sharply down to present levels
below $12.00 in mid‐July.
Figure 1. AUGUST 2014 and NOVEMBER 2014 CME Soybean Futures Price Charts (electronic trade) …
September 6, 2016
Grain Market Outlook
U.S. 2015/16 ($4.21 Avg$)
JULY 2017 CME KS HRW Wheat Futures
January 7 – September 2, 2016
Close = $4.49 ¼ on 9/2/2016
DEC 2016 CME KS HRW Wheat Futures
January 7 – September 2, 2016
Close = $4.13 ¼ on 9/2/2016
Page | 5
period (Figure 2). “Current crop” MY 2016/17 for U.S. wheat began on June 1, 2016 and will conclude on May
31, 2017. If this projected price pattern were to become reality, it would signal the likelihood of returns to
storage for Kansas wheat following the summer 2016 harvest through early 2017. These projections are taken
from the USDA Economic Research Service (ERS) wheat futures price forecast model, available online at the
following web address:
http://www.ers.usda.gov/data‐products/season‐average‐price‐forecasts.aspx
According to historic price patterns, most of the post‐harvest increase in Kansas wheat prices is usually
realized from July through October, with movement being mostly sideways through the remainder of the
marketing year. The most variability around these monthly indices have occurred during June‐July and the
period when the Kansas hard red winter wheat crop breaks winter dormancy (i.e., February‐March), with
accompanying production uncertainty in late spring (i.e., May).
U.S. Trade Weighted Dollar Index
Increases in the value of the U.S. dollar relative to the currencies of U.S. trading partner countries began
in earnest when the dollar index was valued at 77.2692 on August 15, 2014 (Figure 3). This upward trend
continued through January 2016 with the index climbing to a high of 95.8011 on January 20th ‐ up 24.0% from
mid‐August 2014. Since then the index has declined, falling to a low of 87.7060 on May 2, 2016, before
trending moderately higher again. On August 26, 2016 the U.S. Dollar index was calculated to be 89.5856 –
down 6.5% from the January 20th high of 95.8011, but still up 15.9% from 77.2692 in mid‐August 2014.
Figure 3. Daily U.S. Trade Weighted Dollar Index – Major Currencies (DTWEXM) …
May 2, 2017
Grain Market Outlook
been placed in storage after fall harvest and
likely has been held for sale through the winter into at least early spring 2017. Second, anticipation of
continued strong use of 2016 crop U.S. corn for domestic U.S. ethanol production and livestock feeding
through spring‐summer 2017. Third, at least moderate continued strength in U.S. corn exports – at least until
what is forecast to be a sizable 2nd crop of corn from South America becomes available on global markets
during Summer 2017. And fourth, the always present possibility of broader U.S. and Foreign economic and/or
financial system disruptions that could impact grain, energy, and other commodity markets in 2017. World
geo‐political events have the potential to provide “shocks” to U.S. and World energy and grain markets – with
the impact on the direction of U.S. and World corn markets being difficult to anticipate depending on which
countries may be involved and their role in global corn export trade.
Page | 2
USDA Supply‐Demand Forecast for “Next Crop” MY 2017/18. With early USDA projections of 2017 U.S. corn
plantings of 89.996 million acres or ‘ma’ (down 4.0 ma). Harvested acres of approximately 82.4 ma (down
4.35 ma) are forecast, with projected yields of 170.7 bu/ac (vs the record high of 174.6 in 2016), leading to a
2017 U.S. corn production is forecast to be 14.065 bb – down from the record high of 15.148 bb in 2016.
The USDA forecast “next crop” MY 2017/18 total supplies to be 16.435 bb – down 505 mb from last year’s
record high. Total use is forecast at 14.220 bb – down 400 mb from last year’s record high. Ending stocks are
projected to be 2.215 bb (15.58% S/U) – down from 2.320 bb (15.87% S/U) in “current” MY 2016/17. United
States’ corn prices are projected by the USDA to average $3.50 /bu – up from a midpoint estimate of $3.40 /bu
from “current” MY 2016/17 – but within the range of $3.25‐$3.55 /bu for this marketing year. This scenario is
given a 55% likelihood of occurring by KSU Extension Ag Economist D. O’Brien.
Alternative KSU Forecasts for “Next Crop” MY 2017/18: Three alternative KSU‐Scenarios for U.S. corn supply‐
demand and prices are presented for “next crop” MY 2017/18. Each forecast scenario presents the likelihood
of lower U.S. corn acreage, yields and production than projected by the USDA in the February 23‐24, 2017
Agricultural Outlook Forum for “next crop” MY 2017/18.
KSU “Next Crop” MY 2017/18 Scenario #1) “167.3 bu/ac – 13.556 bb” Scenario (25% probability) assumes:
88.500 ma planted, 81.031 ma harvested, 167.3 bu/ac trend yield, 13.556 bb production, 15.926 bb total
supplies, 14.185 bb total use, 1.741 bb ending stocks, 12.27% S/U, & $3.85 /bu U.S. corn average price for
“next crop” MY 2017/18;
KSU “Next Crop” MY 2017/18 Scenario #2) “165.0 bu/ac – 13.370 bb” Scenario (15% probability) assumes:
88.500 ma planted, 81.031 ma harvested, 165.0 bu/ac yield, 13.370 bb production, 15.740 bb total supplies,
14.080 bb total use, 1.660 bb ending stocks, 11.21% S/U, & $4.05 /bu U.S. corn average price for “next crop”
MY 2017/18;
KSU “Next Crop” MY 2017/18 Scenario #3) “150.0 bu/ac – 12.155 bb” Scenario (5% probability) assumes:
88.500 ma planted, 81.031 ma harvested, 150.0 bu/ac yield, 12.155 bb production, 14.525 bb total supplies,
13.460 bb total use, 1.065 bb ending stocks, 7.91% S/U, & $4.75 /bu U.S. corn average price for “next crop” MY
2017/18;
World Corn Supply‐Demand: Record high World corn production of 1,053.8 million metric tons (mmt) is
projected for “current” MY 2016/17, up 9.4% from 963.3 mmt in MY 2015/16, and up 3.7% from 1,016.0 mmt
in MY 2014/15. Record high World corn total supplies of 1,265.6 mmt are projected for “current” MY 2016/17,
up from 1,173.1 mmt in MY 2015/16, and from 1,190.8 mmt in MY 2014/15.
World corn exports of 154.4 mmt are projected for “current” MY 2016/17, up 28.7% from 120.0 mmt in MY
2015/16, and up 8.6% from 142.2 mmt in MY 2014/15. Projected record high World corn ending stocks of
223.0 mmt (21.4% S/U) in “new crop” MY 2016/17 are up from 211.8 mmt (22.0% S/U) in MY 2015/16, and
from 209.8 mmt (21.4% S/U) in MY 2014/15.
Although World corn ending stocks are projected to be a record high in “current” MY 2016/17 at 223.0 mmt,
World corn percent ending stocks‐to‐use are forecast to actually decline marginally to 21.4%. Strong World
demand for corn at low prices is expected to continue – especially in the United States, Argentina, Mexico,
Southeast Asia, China, Ukraine, and other Former Soviet Union countries (less Ukraine). An ongoing, strong
demand base for corn could help cause sharply increased corn market volatility in the summer of 2017 IF any
serious threats emerge to the 2017 U.S. corn crop.
Page | 3
I. U.S. Corn Market Situation and Outlook
April 11th USDA Crop Production & WASDE Reports
On April 11th the USDA World Agricultural Outlook Board (WAOB) released its April 2017 World
Agricultural Supply and Demand Estimates (WASDE) report – containing U.S. and World corn supply‐demand
and price projections for the 2014/15, 2015/16, and “current crop” 2016/17 marketing years (MY) for corn.
The “current” MY 2016/17 for U.S. corn began on September 1, 2016 and will last through August 31, 2017.
On March 31st, the USDA’s National Agricultural Statistics Service (NASS) (https://www.nass.usda.gov/) released
it’s Prospective Plantings (http://usda.mannlib.cornell.edu/usda/current/ProsPlan/ProsPlan‐03‐31‐2017.pdf) and Grain Stocks
(http://usda.mannlib.cornell.edu/usda/current/GraiStoc/GraiStoc‐03‐31‐2017.pdf) reports. These USDA reports were preceded by
the USDA 2017 Agricultural Outlook Forum in Arlington, Virginia on February 23‐24, 2017
(https://www.usda.gov/oce/forum/). At this forum the USDA provided an initial set of supply‐demand and price
forecasts for U.S. corn and other crops for the upcoming 2017/18 marketing year. “Next crop” MY 2016/17 for
U.S. corn will begin on September 1, 2017 and will last through August 31, 2018.
Following its normal procedures, the next supply‐demand and price forecasts for “next crop” 2017/18
from the USDA will be released in the May 10, 2017 USDA WASDE report.
CME MAY 2017 & DECEMBER 2017 Corn Futures Trends
MAY 2017 CME Corn Futures
Following a low of $3.32 1/2 on August 31, 2016, MAY 2017 Chicago Mercantile Exchange (CME) corn
futures prices trended up to a high of $3.75 ¾ on October 20, 2016 (Figure 1). Following that high, MAY 2017
corn futures prices declined to a low of $3.49 ¼ on December 1, 2016, before moving to an eventual high of
$3.87 ¼ on February 16, 2017. Since then, MARCH 2017 corn futures first trended lower to $3.67 ¼ on
February 27th, and then to a high of $3.86 ¼ on February 28th before closing at $3.82 on March 1, 2017
DECEMBER 2017 CME Corn Futures
In a similar trading pattern to MARCH 2017 Corn futures, following a low of $3.58 1/2 on August 31, 2016,
DECEMBER 2017 Chicago Mercantile Exchange (CME) corn futures prices trended up to a high of $3.95 ½ on
October 20, 2016 (Figure 1). Following that high, DECEMBER 2017 corn futures prices declined to lows of
$3.74 ¼ on November 15th and $3.74 ½ on December 1, 2016, before moving to an eventual high of $4.03 ¾ on
February 16, 2017. Since then, DECEMBER 2017 corn futures first trended lower to $3.88 on February 27th,
and then to a high of $4.04 on February 28th before closing at $4.01 ¼ on March 1, 2017.
CME Corn Futures 2017 Contract Spreads
The total futures carrying charge or “term spread” between MARCH 2017 and JULY 2017 corn futures on
Wednesday, March 1st was $0.16 ¾ per bushel (i.e., $3.89 ¼ for JULY 2017 Corn less $3.75 ¾ for MARCH 2017
Corn), or $0.0419 per bushel per month. This compares to commercial grain storage charges in Kansas grain
elevators in the range of $0.04 to $0.05 per bushel per month – before accounting for interest or additional
handling costs or other discounts. The MARCH 2017 Corn futures contract was entering the early stages of its
Page | 4
contract delivery period at that time, with grain elevators “rolling” to the MAY 2017 Corn futures contract for
local basis determination purposes. The spread from the MAY 2017 to JULY 2017 Corn futures contracts was
$0.07 ¼ ($3.89 ¼ ‐ $3.82) or $0.03625 per month.
Figure 1. MAY 2017 & DECEMBER 2017 CME Daily Corn Futures Price Charts (as of May 2, 2017)
ne …
May 19, 2017
Grain Market Outlook
ing of the 2016 corn crop – much of which had been placed in storage after fall harvest and
likely has been held for sale through the winter into at least early‐spring and some into summer 2017. Second,
anticipation of continued strong use of 2016 crop U.S. corn for domestic U.S. ethanol production and livestock
feeding through spring‐summer 2017. Third, at least moderate continued strength in U.S. corn exports – at
least until what is forecast to be a sizable 2nd crop of corn from South America becomes available on global
markets during Summer 2017. And fourth, the always present possibility of broader U.S. and Foreign
economic and/or financial system disruptions that could impact grain, energy, and other commodity markets
in 2017. World geo‐political events have the potential to provide “shocks” to U.S. and World energy and grain
markets – with the impact on the direction of U.S. and World corn markets being difficult to anticipate
depending on which countries may be involved and their role in global corn export trade.
Page | 2
USDA Supply‐Demand & Price Forecast for “Next Crop” MY 2017/18
Early USDA projections are for 2017 U.S. corn plantings of 89.996 million acres or ‘ma’ (down 4.0 ma).
Harvested acres of approximately 82.4 ma (down 4.35 ma) are forecast, with projected yields of 170.7 bu/ac
(vs the record high of 174.6 in 2016), leading to a 2017 U.S. corn production is forecast of 14.065 bb – down
from the record high of 15.148 bb in 2016.
The USDA forecast “next crop” MY 2017/18 total supplies to be 16.410 bb – down 530 mb from last year’s
record high. Total use is forecast at 14.300 bb – down 345 mb from last year’s record high. Ending stocks are
projected to be 2.110 bb (14.76% S/U) – down from 2.295 bb (15.67% S/U) in “current” MY 2016/17. United
States’ corn prices are projected to average $3.40 /bu (range of $3.00‐$3.80). This equals the midpoint
estimate of $3.40 /bu from “current” MY 2016/17. This scenario is given a 45% likelihood of occurring by KSU
Extension Ag Economist D. O’Brien.
Alternative KSU Supply‐Demand & Price Forecast for “Next Crop” MY 2017/18
Three alternative KSU‐Scenarios for U.S. corn supply‐demand and prices are presented for “next crop” MY
2017/18. Each forecast scenario presents the likelihood of lower U.S. corn acreage, yields and production than
projected by the USDA in the May 10, 2017 WASDE report for “next crop” MY 2017/18.
KSU “Next Crop” MY 2017/18 Scenario #1) “167.3 bu/ac – 13.556 bb” Scenario (25% probability) assumes:
88.500 ma planted, 81.031 ma harvested, 167.3 bu/ac trend yield, 13.556 bb production, 15.901 bb total
supplies, 14.255 bb total use, 1.646 bb ending stocks, 11.55% S/U, & $3.95 /bu U.S. corn average price for
“next crop” MY 2017/18;
KSU “Next Crop” MY 2017/18 Scenario #2) “165.0 bu/ac – 13.370 bb” Scenario (15% probability) assumes:
88.500 ma planted, 81.031 ma harvested, 165.0 bu/ac yield, 13.370 bb production, 15.715 bb total supplies,
14.155 bb total use, 1.560 bb ending stocks, 11.02% S/U, & $4.10 /bu U.S. corn average price for “next crop”
MY 2017/18;
KSU “Next Crop” MY 2017/18 Scenario #3) “150.0 bu/ac – 12.155 bb” Scenario (5% probability) assumes:
88.500 ma planted, 80.535 ma harvested, 150.0 bu/ac yield, 12.080 bb production, 14.375 bb total supplies,
13.460 bb total use, 915 million bushels (mb) ending stocks, 6.80% S/U, & $6.00 /bu U.S. corn average price for
“next crop” MY 2017/18;
World Corn Supply‐Demand: World corn production of 1,033.7 million metric tons (mmt) is projected for
“next crop” MY 2017/18, down 3.0% from the record high of 1,065.1 mmt in “current” MY 2016/17, but still up
6.8% from 968.1 mmt in MY 2015/16. Near record World corn total supplies of 1,257.6 mmt are projected for
“next crop” MY 2017/18, down marginally from the record high of 1,278.1 mmt in “current” MY 2016/17, but
up from 1,177.5 mmt in MY 2015/16.
World corn exports of a near record 151.9 mmt are projected for “next crop” MY 2017/18, down 4.2% from
the record high of 158.6 mmt in MY 2015/16, and up 26.6% from 119.95 mmt in MY 2015/16. Projected World
corn ending stocks of 195.3 mmt (18.4% S/U) in “next crop” MY 2017/18 are down from the record high 223.9
mmt (21.3% S/U) in “current” MY 2016/17, and from 212.4 mmt (22.0% S/U) in MY 2015/16.
Strong World demand for corn at low prices is expected to continue – especially in the United States,
Argentina, Mexico, Southeast Asia, China, Ukraine, and other Former Soviet Union countries (less Ukraine).
An ongoing, strong demand base for corn could help cause sharply increased corn market volatility in the
summer of 2017 IF any serious threats emerge to the 2017 U.S. corn crop.
Page | 3
I. U.S. Corn Market Situation and Outlook
May 10th USDA Crop Production & WASDE Reports
On May 10th the USDA World Agricultural Outlook Board (WAOB) released its May 2017 World
Agricultural Supply and Demand Estimates (WASDE) report – containing U.S. and World corn supply‐demand
and price projections for the 2015/16, “current” 2015/16, and “next crop” 2017/18 marketing years (MY) for
corn. The “next crop” MY 2017/18 for U.S. corn will begin on September 1, 2017 and will last through August
31, 2018. Earlier, on March 31st, the USDA National Agricultural Statistics Service (NASS)
(https://www.nass.usda.gov/) had released it’s Prospective Plantings (http://usda.mannlib.cornell.edu/usda/current/ProsPlan/ProsPlan‐
03‐31‐2017.pdf) and Grain Stocks (http://usda.mannlib.cornell.edu/usda/current/GraiStoc/GraiStoc‐03‐31‐2017.pdf) reports. Planted
acreage estimates from the Prospective Plantings report were used by the USDA WAOB to develop the May
10th projection of 2017 U.S. corn production in the WASDE report. The grain stocks estimates released on
March 31st were used to calculate U.S. corn livestock feed and residual usage in “current” MY 2016/17.
Following its normal procedures, the next supply‐demand and price forecasts for “next crop” 2017/18
from the USDA will be released in the June 9, 2017 USDA WASDE report.
CME JULY 2017 & DECEMBER 2017 Corn Futures Trends
JULY 2017 CME Corn Futures
Following a low of $3.40 ¼ on August 31, 2016, JULY 2017 Chicago Mercantile Exchange (CME) corn
futures prices trended up to a high of $3.81 ¾ on October 20, 2016 (Figure 1). Following that high, JULY 2017
corn futures prices declined to a low of $3.57 ¼ on December 1, 2016, before moving to an eventual high of
$3.93 ¾ on February 16, 2017. Since then, JULY 2017 corn futures traded in the range from lows $3.61 ¾ on
March 27th and $3.60 ¾ on April 21st to highs of $3.79 ¼ on April 3rd, $3.79 ¼ on April 13th, and $3.79 on May
1st, before closing at $3.71 ½ on May 17, 2017.
DECEMBER 2017 CME Corn Futures
In a similar trading pattern to JULY 2017 corn futures, following a low of $3.58 1/2 on August 31, 2016,
DECEMBER 2017 Chicago Mercantile Exchange (CME) corn futures prices trended up to a high of $3.95 ¼ on
October 20, 2016 (Figure 1). Following that high, DECEMBER 2017 corn futures prices declined to lows of
$3.74 ¼ on November 15th and $3.74 ½ on December 1, 2016, before moving to an eventual high of $4.03 ¾ on
February 16, 2017 and $4.04 on February 28th. Since then, DECEMBER 2017 corn futures traded in the range
from lows $3.78 ¼ on March 27th and $3.79 ¼ on April 21st to highs of $3.95 on April 3rd, $3.95 ¾ on April 13th,
and $3.95 ¾ on May 1st, before closing at $3.89 on May 17, 2017.
CME Corn Futures 2017 Contract Spreads
The total futures carrying charge or “term spread” between JULY 2017 and SEPTEMBER 2017 corn futures
on Wednesday, May 17th was $0.07 ¾ per bushel (i.e., $3.79 ¼ for SEPTEMBER 2017 Corn less $3.71 ½ for JULY
2017 Corn), or $0.03875 per bushel per month. This compares to commercial grain storage charges in Kansas
Page | 4
grain elevators in the range of $0.04 to $0.05 per bushel per month – before accounting for interest or
additional handling costs or other discounts.
Figure 1. JULY 2017 & DECEMBER 2017 CME Daily Corn Futures Price Charts (as of May 17, 2017)
ne …
July 17, 2017
Grain Market Outlook
Page | 2
predominates in local Kansas grain markets, it is a positive market signal that Kansas cash corn prices have
enough support to have avoided falling down to USDA loan rate levels.
Major Corn Market Considerations
First, large beginning stocks of U.S. corn coming into “next crop” MY 2017/18 have been a “mitigating” or
“limiting” factor affecting the response of the corn market to 2017 production risk. The corn market is less
anxious about having adequate corn supplies in the face of 2017 U.S. corn production risk when beginning
stocks are 2.370 bb rather than 1.000 bb. Second, it is anticipated that moderately low prices of U.S. corn will
help maintain strong usage for domestic U.S. ethanol and wet milling production, as well as livestock feeding
through at least summer‐fall 2017.
Third, at least moderate continued strength is expected in U.S. corn exports due to moderately low U.S. corn
prices. Exports of U.S. corn are expected to continue at a “decent” pace” even though South American corn
production will continue to be a competitive factor in World trade through at least the end of 2017. Fourth,
the possibility exists of broader U.S. and Foreign economic and/or financial system disruptions that could
impact grain, energy, and other commodity markets in 2017‐2018. World geo‐political events have the
potential to provide “shocks” to U.S. and World energy and grain markets. However, the impact on the
direction of U.S. and World corn markets of such disruptive events are difficult to anticipate – depending on
which countries may be involved and their role in global corn export trade.
USDA Supply‐Demand & Price Forecast for “Next Crop” MY 2017/18
The USDA has projected 2017 U.S. corn plantings to be 90.886 million acres or ‘ma’ (down 3.118 ma from
2016). Harvested acres in 2017 are forecast at 83.496 ma (down 3.252 ma), with projected yields of 170.7
bu/ac (vs the record high of 174.6 in 2016). This leads to a USDA 2017 U.S. corn production forecast of 14.255
bb – down from the record high of 15.148 bb in 2016.
The USDA forecast “next crop” MY 2017/18 total supplies to be 16.675 bb – down 265 mb from last year’s
record high. Total use is forecast at 14.350 bb – down 220 mb from last year’s record high. Ending stocks are
projected to be 2.325 bb (16.20% S/U) – down from 2.370 bb (16.27% S/U) in “current” MY 2016/17. United
States’ corn prices are projected to average $3.30 /bu (range of $2.90‐$3.70). This is down $0.05 /bu from the
midpoint estimate of $3.30 /bu from “current” MY 2016/17. This scenario is given a 45% likelihood of
occurring by KSU Extension Agricultural Economist D. O’Brien.
Alternative KSU Supply‐Demand & Price Forecast for “Next Crop” MY 2017/18
Four alternative KSU‐Scenarios for U.S. corn supply‐demand and prices are presented for “next crop” MY
2017/18. Each forecast scenario presents the likelihood of lower U.S. corn acreage, yields and production than
projected by the USDA in the July 12, 2017 WASDE report for “next crop” MY 2017/18.
A ‐ KSU “Next Crop” MY 2017/18 Scenario #1) “167.3 bu/ac – 13.815 bb” Scenario (25% probability) assumes:
89.886 ma planted, 82.577 ma harvested, 167.3 bu/ac trend yield, 13.815 bb production, 16.235 bb total
supplies, 14.245 bb total use, 1.990 bb ending stocks, 13.97% S/U, & $3.55 /bu U.S. corn average price for
“next crop” MY 2017/18;
B ‐ KSU “Next Crop” MY 2017/18 Scenario #2) “165.0 bu/ac – 13.652 bb” Scenario (20% probability) assumes:
89.886 ma planted, 82.577 ma harvested, 165.0 bu/ac yield, 13.625 bb production, 16.045 bb total supplies,
14.120 bb total use, 1.925 bb ending stocks, 16.63% S/U, & $3.60 /bu U.S. corn average price for “next crop”
MY 2017/18;
Page | 3
C ‐ KSU “Next Crop” MY 2017/18 Scenario #3) “160.0 bu/ac – 13.212 bb” Scenario (5% probability) assumes:
89.886 ma planted, 82.577 ma harvested, 160.0 bu/ac yield, 13.212 bb production, 15.632 bb total supplies,
13.920 bb total use, 1.712 bb ending stocks, 12.30% S/U, & $3.80 /bu U.S. corn average price for “next crop”
MY 2017/18;
D ‐ KSU “Next Crop” MY 2017/18 Scenario #4) “150.0 bu/ac – 12.387 bb” Scenario (5% probability) assumes:
89.886 ma planted, 82.577 ma harvested, 150.0 bu/ac yield, 12.387 bb production, 14.807 bb total supplies,
13.400 bb total use, 1.407 bb ending stocks, 10.50% S/U, & $4.20 /bu U.S. corn average price for “next crop”
MY 2017/18;
Note: even with significant reductions in 2017 U.S. corn production as represented in KSU Scenarios C and D
above, the presence of large beginning stocks of 2.370 bb in “next crop” MY 2017/18 limit the “tightness” of
corn supplies, and lowers price prospects.
World Corn Supply‐Demand – With & Without China
World corn production of 1,036.9 million metric tons (mmt) is projected for “next crop” MY 2017/18, down
3.0% from the record high of 1,068.8 mmt in “current” MY 2016/17, but still up 7.0% from 968.8 mmt in MY
2015/16. Near record World corn total supplies of 1,264.4 mmt are projected for “next crop” MY 2017/18,
down marginally from the record high of 1,281.6 mmt in “current” MY 2016/17, but up from 1,178.4 mmt in
MY 2015/16.
World corn exports of a near record 152.5 mmt are projected for “next crop” MY 2017/18, down 4.6% from
the record high of 159.7 mmt in MY 2015/16, and up 27.5% from 119.6 mmt in MY 2015/16. Projected World
corn ending stocks of 200.8 mmt (18.9% S/U) in “next crop” MY 2017/18 are down from the record high 227.5
mmt (21.6% S/U) in “current” MY 2016/17, and from 212.8 mmt (22.0% S/U) in MY 2015/16.
An alternative view of the World corn supply‐demand is presented if Chinese corn usage and ending stocks are
isolated from the World market. “World Less China” corn ending stocks are projected to be 119.5 mmt (14.5%
S/U and 40.5% of World corn stocks) in “next crop” MY 2017/18, down from 126.2 mmt (15.4% S/U and 44.5%
of World stocks) in “current” MY 2016/17, but up from 102.0 mmt (13.6% S/U and 52.1% of World Stocks).
These figures show that World stocks of corn less China’s direct influence are projected to be down
approximately 23% (i.e., 14.5% S/U for the “World Less China” versus 18.9% S/U for the “World” overall in
“next crop” MY 2017/18).
These figures also show that Chinese ending stocks of corn as proportion of the World overall is declining –
down from 52.1% in MY 2015/16 to 44.5% in “current” MY 2016/17, and down to 40.5% in “next crop” MY
2017/18. The deliberate actions taken by the Chinese government in recent years to reduce feedgrain
stockpiles is impacting the relative amount of corn stocks they hold in the World corn market.
…