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January 1, 2014
9.15
Cash Building Rent and Conservation 2.94
Farm Organization Fees …
August 14, 2016
Breakout session presentations
Control over use of machine, timeliness– Conserves capital for other uses (lease payments may be lower than loan payments)– … Control over use of machine, timeliness
– Conserves capital for other uses (lease payments
may be lower than loan payments)
– …
June 7, 2017
KFMA Research
for these same cuts plus conservation
compliance requirements … compromise, Congress required conservation compliance, but
didn’t …
July 30, 2015
Animal Well-Being
agreed or strongly agreed that conserve and protect land and water … supply of beef products, conserve and protect the welfare of … products. 61% 17% 7% 4% 6% 5%
Conserve and protect land and water …
February 18, 2013
Risk Management Strategies
several fiscally y j p y
conservative organizations in calling … programs
1.4% 1.919 1.4% 1.919 FSA conservation programs
1.0% 1.457 1.0 …
June 18, 2014
Grain Market Outlook
“New crop” DEC 2014 corn futures contract prices also responded in a volatile and ultimately negative
manner to the information in the June 11th USDA reports. On the day of the report CBOT DEC 2014 corn
futures prices opened at $4.45 per bushel, and traded as high as $4.48 ½ and as low as $4.39 during the
session, before settling at $4.41 ¾ – down $0.03 ¼ for the day (Figure 1). Since then DEC 2014 corn futures
JULY 2014 CME eCorn Futures
Oct. 17, 2013 – June 17, 2014
Close = $4.38 ¾ on 6/17/2014
DEC 2014 CME eCorn Futures
Oct. 17, 2013 – June 17, 2014
Close = $4.39 ½ on 6/17/2014
Page | 3
prices have traded first higher and then lower – ranging from a high of $4.49 ¾ on Friday, June 13th to a low of
$4.36 ½ on Tuesday, June 17th before closing at $4.39 ½ on the same day.
I‐C. U.S. Corn Supply‐Demand
U.S. Corn Acreage, Yield & Production
The USDA left unchanged its projection of 2014 U.S. corn planted and harvested acreage, U.S. average
yield, and U.S. corn production. Updated estimates of U.S. corn planted and harvested acreage will be given in
the USDA NASS Acreage report to be released on Monday, June 30, 2014. Any changes in projected U.S. corn
acreage will likely be included in the upcoming July 11th World Agricultural Supply and Demand Estimates
Report.
Following the results of March 31st USDA NASS Prospective Plantings Report, the USDA projected that
2014 U.S. corn total planted acreage would be 91.691 million acres (ma), down from 95.365 ma in 2013,
97.155 ma in 2012, and 91.936 ma in 2011 (Table 1 and Figures 1‐2). No adjustments have been made in this
projection in the April‐May‐June USDA Crop Production or WASDE reports. In addition, the USDA projected
2014 U.S. corn harvested acreage to be 84.3 ma, down from 87.668 ma in 2013, and 87.365 ma in 2012, but up
from 81.446 ma in 2011.
The forecast 2014 proportion of harvested‐to‐planted acreage for all U.S. corn is projected to be 91.9%,
equal to 2013, but up from 89.9% in 2012 and 91.4% in 2011. The U.S. average and median (i.e., the 50th
percentile or “middle”) corn percent harvested‐to‐planted acreage over the years of 2000‐2013 has been
91.0% and 91.2% , with a high of 92.4% in 2010 and a low of 87.9% in 2002. Using the 2000‐2013 average
percent harvested‐to‐planted acreage proportion of 0.91 would lead to a projection of U.S. 2014 harvested
acres of 83.439 million acres – approximately 860,200 acres less than the USDA’s projection of 84.3 million
acres harvested.
The projected 2014 U.S. average corn yield of 165.3 bushels per acre (bu/ac) would be a record high, up
from 158.8 bu/ac in 2013, the drought affected 2012 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 a record high 13.935 billion bushels (bb) – which is up marginally from 13.925 bb in
2013, 10.780 bb in 2012, 12.360 bb in 2011, 12.447 in 2010, and 13.092 bb in 2009and (Table 1).
U.S. Corn Total Supplies
The USDA estimates that total supplies of U.S. corn for “new crop” MY 2014/15 are 15.111 bb – resulting
from beginning stocks of 1.146 bb, projected 2014 production of 13.935 bb, and projected imports of 30 mb
(Table 1). Total supplies of 15.111 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. Beginning stocks of 1.146 bb in “new crop” MY 2014/15 are up sharply from 821 mb in “current
year” MY 2013/14, and are comparable to the low of 426 mb occurring in MY 1996/97.
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 equal to 5.050 bb in “current year” MY 2013/14, while being up from 4.648 bb in
MY 2012/13, and 5.000 bb in MY 2011/12. Figure 5 shows weekly U.S. oxygenated plant production of fuel
Page | 4
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 4.638‐5.262 bb on a weekly basis since early September 2013 ‐ the
beginning of the “current” 2013/14 marketing year.
Over the period of from September 1, 2013 through May 2, 2014, corn usage for ethanol production has
been on pace to reach 5.027 bb in “current” MY 2013/14, with the period of June 7th through August 31st yet to
occur. This estimate of 5.027 bb is less than the USDA’s June 2014 WASDE report estimate of 5.050 bb of corn
to be used for ethanol production during “current” MY 2013/14.
U.S. Corn Use as Distillers Grains: An estimate of the U.S. corn equivalent amounts of distillers grains
(DDGS) use for direct livestock feeding and exports is provided in Figure 6 – which shows estimated a) DDGS
corn equivalent U.S. domestic livestock feeding, and b) DDGS exports as well as other categories of U.S. corn
usage since MY 1989/90.
This analysis assumes 16.00 pounds of distillers dried grains and solubles (DDGS) per 56 pound bushel of
corn used in ethanol production – following from recent ethanol industry surveys. By these estimates since
MY 2010/11, approximately 1.05‐1.14 bb of U.S. corn equivalent bushel‐weights of DDGS are projected either
to have already been or are to be fed to U.S. livestock during each marketing year– i.e., 1.108 bb in DDGS corn‐
weight equivalents in MY 2010/11, 1.130 bb in MY 2011/12, 1.051 bb in MY 2012/13, and 1.142 bb projected
for “current” MY 2013/14 and in “new crop” MY 2014/15. Over the same five most recent marketing years,
DDGS exports in corn equivalent weights are estimated to range from 277 to 326 mb, with approximately 301
bb of DDGS‐corn equivalents in the two most recent U.S. corn marketing years.
U.S. Corn Exports: Projected U.S. corn exports of 1.700 in “new crop” MY 2014/15 are down from the
estimate of 1.900 bb in “current year” MY 2013/14, but up sharply from 731 mb in MY 2012/13 – the 40 year
low since MY 1975/76. As of June 5th, with 40 of 52 weeks (76.9%) of “current” MY 2013/14 complete, 1.372
bb of U.S. corn had been shipped for export – equal to 72.2% of the USDA’s updated projection for “current”
MY 2013/14 of 1.900 bb. An additional 460 mb of U.S. corn had been sold for future export sales in “current”
2013/14 marketing year – prior to August 31, 2014 (the end of “current” MY 2013/14).
Adding together 1.372 bb in past shipments plus 460 mb in forward sales amounts to 1.832 bb, or 96.4% of
the USDA’s 1.900 bb U.S. corn export target for “current” MY 2013/14 in the June 11th USDA WASDE report
with 76.9% (40/52 weeks) of the marketing year completed. The strong pace of combined shipments and
sales motivated the USDA to increase its U.S. corn export projection by 150 mb from 1.750 bb to 1.900 bb back
in the May 9th WASDE report.
Non‐Ethanol FSI: Forecast non‐ethanol food, seed and industrial (FSI) use of 1.385 bb in “new crop” MY
2014/15 is equal to 1.385 bb in “current year” MY 2013/14, and compares to 1.403 bb in “last year’s” MY
2012/13, and 1.428 bb in MY 2011/12.
Feed and Residual Use: Forecast U.S. feed and residual use of 5.250 bb in “new crop” MY 2014/15 is down
50 mb from 5.300 bb for “current” MY 2013/14, and up from 4.329 bb in MY 2012/13. These levels of corn use
for livestock feeding are somewhat correlated with the amounts of energy feeds per grain consuming animal
units over the same time period.
In its June Feed Outlook Report (http://www.ers.usda.gov/publications/fds‐feed‐outlook/fds‐14e.aspx)
the USDA Economic Research Service (ERS) indicates that over the MY 2012/13 through “new crop” MY
Page | 5
2014/15 time period, the total amount of Energy Feeds in the U.S. – including corn, sorghum, barley, oats and
wheat – was estimated to be 125.7 million metric tons (mmt) in MY 2012/13 (87.5% corn), 141.4 mmt in
“current” MY 2013/14 (95.2% corn), and 142.5 mmt in “new crop” MY 2014/15 (93.6% corn). Over this same
three year period, total U.S. Grain Consuming Animal Units were estimated to be 91.8 million in MY 2012/13,
89.7 million in “current” MY 2013/14, and 90.1 million in “new crop” MY 2014/15.
As a result, U.S. Energy Feeds per Grain Consuming Animal Unit was 1.369 metric tons per animal unit
(mt/au) in MY 2012/13, and is estimated to be 1.576 mt/au in “current” MY 2013/14, and 1.582 mt/au in “new
crop” MY 2014/15. As the availability of feed grain and other energy feeds has increased or is expected to
increase from the drought stricken “short crop” year of MY 2012/13 to “current” MY 2013/14, and into “new
crop” MY 2014/15, the amount of energy feeds fed per animal unit and total feed use of U.S. corn has and is
expected to also increase.
Total Use of U.S. Corn for “new crop” MY 2014/15 is projected to be 13.385 bb – down from the record
high of 13.635 bb in “current” MY 2013/14, but up from 11.111 bb in drought affected MY 2012/13 (Table 1
and Figures 4 & 6). United States’ total corn use has varied based on available U.S. corn supplies in recent
years, trending from 12.737 bb in MY 2007/08, 12.056 bb in MY 2008/09, 13.066 bb in MY 2009/10 (3rd
highest), 13.055 bb in MY 2010/11 (4th highest), 12.528 bb in MY 2011/12, 11.111 bb in MY 2012/13, the
record high of 13.635 bb in “current” MY 2013/14, and the projected amount of 13.385 bb in “new crop” MY
2014/15 (2nd highest).
U.S. Corn Ending Stocks, % Ending Stocks‐to‐Use, & Prices
U.S. corn ending stocks for “new crop” MY 2014/15 are projected to be 1.726 bb, up from 1.146 bb in
“current year” MY 2013/14 (Table 1 & Figure 4). “Current” MY 2013/14 U.S. corn ending stocks of 1.146 bb
are less than 1.673 bb of U.S. corn ending stocks for MY 2008/09, and 1.708 bb in MY 2009/10 – but at least
marginally larger than the recent down‐trending ending stocks figures of 1.128 bb in MY 2010/11, 989 mb in
MY 2011/12, and 821 mb in “drought stricken” MY 2012/13.
Projected percent (%) ending stocks‐to‐use of 12.9% in “new crop” MY 2014/15 is up significantly from
8.4% in “current” MY 2013/14 (Table 1 & Figures 7‐8). United States’ corn % ending stocks‐to‐use declined
from 13.9% in MY 2008/09, to 13.1% in MY 2009/10, 8.6% in MY 2010/11, 7.9% in MY 2011/12, 7.4% in
“drought stricken” MY 2012/13, before increasing for the first time in six (6) years to 8.4% in “current” MY
2013/14, and now to a projected level of 12.9% in “new crop” MY 2014/15.
U.S. average corn prices for “new crop” MY 2014/15 are projected to be $3.85‐$4.55 bu/ac (midpoint =
$4.20) (Table 1 & Figures 9‐10). Since the beginning of the rapid expansion in U.S. ethanol production in 2006,
U.S. corn prices have moved higher, then lower and higher again, from $3.04 /bu in MY 2006/07, to $4.20 in
MY 2007/08, $4.06 in MY 2008/09, $3.55 in MY 2009/10, $5.18 in MY 2010/11, $6.22 in MY 2011/12, up to the
record high of $6.89 in “drought stricken” MY 2012/13. But if the June 11th WASDE projection holds true,
prices will now have declined for two consecutive years since the $6.89 record high in MY 2012/13, down to
$4.45‐$4.65 (midpoint = $4.55) in “current” MY 2013/14, and again to $3.85‐$4.55 (midpoint = $4.20) in “new
crop” MY 2014/15. The USDA’s price projection for “current” MY 2013/14 is down from $4.50‐$4.80 (midpoint
= $4.65 in May 2014).
Page | 6
I‐D. KSU U.S. Corn Supply‐Demand Scenarios for “New Crop” MY 2014/15
There seems to be a tendency for early season forecasts by both the USDA and University grain market
economists to project full production scenarios. Looking back, a combination of drought, excessive moisture,
and resulting poor crop development conditions lead to lower than originally expected U.S. corn production in
2010, 2011, and 2012. And although the 2013 U.S. corn crop has ended up being record large, still it is
markedly lower than original early 2013 production forecast of 14.5+ bb.
Projections for 2014 U.S. corn production by the USDA and Kansas State University may very well follow
this same pattern of being overly optimistic – implicitly discounting the possibility of 2014 U.S. corn crop
production problems. For example, KSU forecasts provided here are decidedly conservative in terms of
projected U …
March 19, 2014
Grain Market Outlook
I‐C. U.S. Corn Supply‐Demand for the “Current” 2013/14 Marketing Year
U.S. Corn 2013 Acres, Yield & Production
The USDA again 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‐March USDA 2014 projection of 158.8 bu/ac in average 2013 U.S. corn yields is down from the USDA’s
projection at the February 22, 2013 USDA Outlook Forum of 163.6 bu/ac (Table 1 and Figure 3).
Projected 2013 U.S. corn production of 13.925 bb remains 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 further changes are eventually made by
the USDA in its projection of 2013 U.S. corn production, they are unlikely to occur until the 2014 Crop
Production Summary is released in January 2015 if the USDA follows its usual procedures.
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 13.325 bb – up 25 mb from February,
up 175 from January, up 275 mb from the December WASDE, and up 375 mb from November, while being up
19.9% from 11.111 bb in “last year’s” MY 2012/13 (Table 1 and Figures 4 & 6). United States’ total corn use of
13.325 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
MAY 2014 CME eCorn Futures
July 18, 2013 – March 18, 2014
Close of $4.86 ¼ on Fri., March 18th
December 2014 CME eCorn Futures
July 18, 2013 – March 18, 2014
Close of $4.87 ¾ on Fri., March 18th
Page | 4
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 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 4.637‐5.262 bb on a weekly basis since early September 2013 ‐ the beginning of the “current”
2013/14 marketing year – averaging a projection of 4.993 bb for “current” MY 2013/14 over the September
2013 – March 7, 2014 time period. This projection of 4.993 bb is consistent to USDA’s March 2014 WASDE
report estimate of 5.000 bb of corn to be used for ethanol production during “current” MY 2013/14.
U.S. Corn Use as Distillers Grains: An estimate of the U.S. corn equivalent amounts of distillers grains
(DDGS) use for direct livestock feeding and exports is provided in Figure 6 – which shows estimated a) DDGS
corn equivalent U.S. domestic livestock feeding, and b) DDGS exports as well as other categories of U.S. corn
usage since MY 1989/90.
This analysis assumes 16.00 pounds of distillers dried grains and solubles (DDGS) per 56 pound bushel of
corn used in ethanol production – following from recent ethanol industry surveys. By these estimates since
MY 2010/11, approximately 1.05‐1.13 bb of U.S. corn equivalent bushel‐weights of DDGS are projected either
to have been or are to be fed to U.S. livestock during each marketing year– i.e., 1.108 bb in DDGS corn‐weight
equivalents in MY 2010/11, 1.130 bb DDGS corn‐weight equivalents in MY 2011/12, 1.051 bb in MY 2012/13,
and 1.130 bb projected for “current” MY 2013/14. Over the same four most recent marketing years, DDGS
exports in corn equivalent weights are estimated to range from 277 to 326 mb.
U.S. Corn Exports: Projected U.S. corn exports of 1.625 in “current” MY 2013/14 are up 25 million bushels
(mb) from February, up 175 mb from January, and up 122.2% from 731 mb a year ago in MY 2012/13 – the 39
year low since MY 1975/76. As of March 6st, with 31 of 52 weeks (59.6%) of “current” MY 2013/14 complete,
757.5 mb of U.S. corn had been shipped for export – equal to 46.6% of the USDA’s updated projection for
“current” MY 2013/14 of 1.625 bb. An additional 746.7 mb of U.S. corn had been sold for future export sales
in “current” 2013/14 marketing year.
Adding together 757.5 mb in past shipments plus 746.7 mb in forward sales amounts to 1.504 bb, or 92.6%
of the USDA’s 1.625 bb U.S. corn export target for “current” MY 2013/14 in the March 10th USDA WASDE
report with 59.6% (31/52 weeks) of the marketing year completed. The strong pace of combined shipments
and sales motivated the USDA to increase its U.S. corn export projection by 25 mb to 1.625 bb in the March
10th WASDE report.
Non‐Ethanol FSI: Forecast non‐ethanol food, seed and industrial (FSI) use of 1.400 bb in “current” MY
2013/14 compares to 1.396 bb in “last year’s” MY 2012/13, and 1.428 bb in MY 2011/12.
Feed and Residual Use: Forecast U.S. feed and residual use of 5.300 bb for “current” MY 2013/14 is
unchanged from January‐February, but up 100 mb from November‐December and up 200 mb from August‐
September WASDE projections. Feed and residual use of 5.300 bb is up 22.3% from 4.335 bb in “last year’s”
MY 2012/13, while being up 16.3% from 4.557 bb in MY 2011/12.
U.S. Corn Ending Stocks, % Ending Stocks‐to‐Use, & Prices in “Current” MY 2013/14
U.S. corn ending stocks for “current” MY 2013/14 are projected to be 1.456 bb, down 25 mb from
February, down 175 mb from January, down 336 mb from December, and down 431 mb from November 2013.
However, the March 2014 projection of 1.456 bb is still up 635 mb (+77%) from 821 mb ending stocks in “last
year’s” MY 2012/13 (Table 1 & Figure 4). “Current” MY 2013/14 U.S. corn ending stocks of 1.456 bb are
comparable to 1.673 bb of U.S. corn ending stocks for MY 2008/09, and 1.708 bb in MY 2009/10 – and above
the recent down‐trending ending stocks of 1.128 bb in MY 2010/11, 989 mb in MY 2011/12, and 821 mb in MY
2012/13.
Page | 5
Projected percent (%) ending stocks‐to‐use of 10.9% in “current” MY 2013/14 is down from the February
WASDE projection of 11.1%, from 12.4% in January, the December 2013 WASDE projection of 13.7%, and also
down from the September‐November 2013 forecasts of 14.6%‐14.7%. However, the March 2014 projection of
10.9% S/U for “current” MY 2013/14 is still up significantly from 7.4% in “last year’s” MY 2012/13 (Table 1 &
Figures 7‐8). United States’ corn % ending stocks‐to‐use declined from 13.9% in MY 2008/09, to 13.1% in MY
2009/10, 8.6% in MY 2010/11, 7.9% in MY 2011/12, and 7.4% in “last year’s” MY 2012/13, before being
projected now for the first time in five (5) years to increase to 10.9% in “current” MY 2013/14.
U.S. average corn prices for “current” MY 2013/14 are projected to be $4.25‐$4.75 bu/ac (midpoint =
$4.50) – narrowing $0.05 on both ends of the range from February, but down from the record high of $6.89
/bu in “last year’s” MY 2012/13 (Table 1 & Figures 9‐10). Since the beginning of the rapid expansion in U.S.
ethanol production in 2006, U.S. corn prices have moved higher, then lower and higher again, from $3.04 /bu
in MY 2006/07, to $4.20 in MY 2007/08, $4.06 in MY 2008/09, $3.55 in MY 2009/10, $5.18 in MY 2010/11,
$6.22 in MY 2011/12, up to the record high of $6.89 in “last year’s” MY 2012/13 – with a decline now forecast
to the price range midpoint projection of $4.50 in “current” MY 2013/14.
I‐E. USDA and KSU U.S. Corn Supply‐Demand Scenarios for “Next Crop” MY 2014/15
There seems to be a tendency for early season forecasts by both the USDA and University grain market
economists to project full production scenarios. This has been especially true since the winter of 2010 during
which time preseason U.S. pre‐season corn production forecasts have been markedly larger than what final
U.S. corn crop production totals have ended up as each year. A combination of drought and poor crop
development conditions lead to lower than originally expected U.S. corn production in 2010, 2011, and 2012.
And although the 2013 U.S. corn crop has ended up being record large, still it is markedly lower than original
early 2013 production forecast of 14.5+ bb.
Projections for 2014 U.S. corn production by the USDA and Kansas State University may very well follow
this same pattern of being overly optimistic – implicitly discounting the possibility of 2014 U.S. corn crop
production problems. For example, KSU forecasts provided here are decidedly conservative in terms of
projected U …
September 29, 2014
Grain Market Outlook
Question: Do these prices represent a fall harvest low?
The downtrend in “new crop” November 2014 soybean futures began arguably on June 30, 2014 when
prices fell from $12.36 with a sharp 1 day decline of $0.70 ¾ per bushel. Then after a time of volatile sideways
movement, NOV 2014 futures began to trend more consistently downward from a high of $11.16 ½ on July 29,
2014. This downtrend continued through August and most of September with prices closing at $9.10 ½ on
September 26, 2014. Following the release of the September 11th USDA reports there has been much
discussion about how “the soybean market is looking for a low” for fall harvest 2014.
The results of the October ‐ November 2014 and the January 2015 USDA Crop Production and WASDE
reports, and the grain market’s reaction to them and potentially other market factors, will be key determinants
as to whether these price levels represent the fall harvest “lows” this year. There are signs that low soybean
futures prices are helping to bring about increased purchases on user‐buyers parts. This is found in a) reports
NOV 2014 CME eSoybean Futures
April 29, 2014 – Sept. 26, 2014
Close = $9.10 ¼ on 9/26/2014
Page | 5
from the USDA Foreign Agricultural Service (FAS) export data that sizable forward purchases of U.S. soybeans
for later export have occurred, and b) from Commodity Futures Trading Commission data indicating that
commercial longs (i.e., business entities that take “long” or “buy” positions in futures markets to provide price
protection for their eventual purchase the cash product, such as soybean processors and exporters).
Until either a) a large proportion of U.S. soybean producers harvest their crop and put it in storage –
resisting sales of soybeans at sub‐$9.00 cash prices, or b) a significant soybean production threat occurs in
South American production regions during the November 2014 through April 2015 period, there is little that
will stop “new crop” November 2014 soybean futures prices from continuing to trend lower. The market is in
essence waiting for the formation of a general consensus that soybean futures prices have moved low enough
relative to market supply‐demand fundamentals.
I‐D. U.S. Soybean Supply‐Demand
U.S. Soybean Acreage, Yield & Production
The USDA continued to project that 2014 U.S. soybean planted acreage would be a record high 84.839
million acres (ma), up from 76.533 ma in 2013, 77.198 ma in 2012, and 75.046 ma in 2011 (Table 1 and Figure
2). In addition, the USDA projected 2014 U.S. soybean harvested acreage to be a record high 84.058 ma, up
from 75.869 ma in 2013, 76.164 ma in 2012, and 73.776 ma in 2011. The 2014 proportion of harvested‐to‐
planted acreage for all U.S. soybeans is projected to be 99.07%, down marginally from 99.13% in to 2013, but
up from 98.66% in 2012 and 98.3% in 2011.
Soybean Prevented Planting Impacts? It is possible that 2014 U.S. soybean planted and harvested acres
could be adjusted lower due to prevented planting problems that occurred this past spring. Farm Service
Agency (FSA) estimates released in August and September indicated as much as 2.5‐4.0 million acres may have
been designated as “prevented planted”. While questions exist about how these FSA prevented planting data
are to be interpreted, it seems likely that at least a marginal decrease in USDA projections of 2014 U.S.
soybean planted and harvested acreage will occur in the upcoming October, November or January 2015 USDA
NASS Crop Production reports. Such an acreage reduction which could lead to at least a marginal reduction in
2014 U.S. soybean production estimates, and which would in turn lead to adjustments in “new crop” 2014/15
marketing year U.S. soybean supply‐demand balances.
The projected 2014 U.S. average soybean yield of 46.6 bushels per acre (bu/ac) would be a record high,
and is up from USDA projections of 45.4 bu/ac in August, and 45.2 in July. This projection of 46.6 bu/ac in
September is up from 43.3 bu/ac in 2013, the drought‐affected 2012 low yield of 39.8 bu/ac., 41.9 164.7 bu/ac
in 2009, 43.5 bu/ac in 2010, and the previous record of 44.0 bu/ac in 2009 (Table 1 and Figure 3).
Based on these 2014 acreage and yield forecasts, the USDA projected 2014 U.S. soybean production to be
a record high 3.913 billion bushels (bb), up from 3.289 bb in 2013, 3.034 bb in 2012, 3.094 bb in 2011, the
previous record high of 3.329 bb in 2010, and 2.967 bb in 2009 (Table 1).
U.S. Soybean Total Supplies
The USDA estimates that total supplies of U.S. soybeans for “new crop” MY 2014/15 are 4.058 bb – up 87
million bushels or ‘mb’ from August. Total “new crop” supplies of 4.058 bb result from beginning stocks of 130
mb, projected 2014 production of 3.913 bb, and projected imports of 15 mb (Table 1). Over the recent period
of expansion in both corn ethanol production and Chinese soybean import demand, total supplies of U.S.
Page | 6
soybeans were 3.655 bb in MY 2006/07 (previous record high), 3.261 bb in MY 2007/08, 3.185 bb in MY
2008/09, 3.512 bb in MY 2009/10, 3.495 bb in MY 2010/11, 3.325 bb in MY 2011/12, 3.243 bb in MY 2012/13,
and 3.509 bb in “old crop” MY 2013/14, and now are projected to be a new record high of 4.058 bb in “new
crop” MY 2014/15.
Beginning stocks of 130 mb in “new crop” MY 2014/15 are down 10 mb from the August WASDE, and
down from 141 mb in “old crop” MY 2013/14, 169 mb in MY 2012/13, and 215 mb in MY 2011/12. This
forecast of lower beginning stocks of 130 mb in “new crop” MY 2014/15 is comparable to the low of 112 mb
which occurred in MY 2004/05, and to what is at least a 40 year low of 103 mb in beginning stocks in MY
1977/78.
Imports of 15 mb in “new crop” MY 2014/15 are projected to be down from the record high of 80 mb in
“old crop” MY 2013/14, and down from the 2nd highest amount of 41 mb in MY 2012/13. However, U.S.
soybean imports of 15 mb in “new crop” MY 2014/15 would represent a return to “normal” – being
comparable to the range of 10 – 16 mb in U.S. soybean imports for the MY 2007/08 through MY 2011/12
period, and of U.S. soybean imports of less than 10 mb per marketing year going back to at least MY 1980/81.
U.S. Soybean Use by Category & Total Use
Domestic Crush: Projected U.S. soybean domestic crushings of 1.770 bb in “new crop” MY 2014/15 (up 15
mb from August) are up from 1.730 bb for “old crop” MY 2013/14 (up 5 mb from August), 1.689 bb in MY
2012/13, and from 1.703 bb in MY 2011/12 (Table 1 and Figure 4). The record high amount of U.S. soybean
domestic crushings of 1.808 bb occurred in MY 2006/07, followed closely time and quantity‐wise with 1.803 bb
in MY 2007/08.
U.S. Soybean Exports: Projected U.S. soybean exports of 1.700 bb in “new crop” MY 2014/15 (up 25 mb
from August) would be a record high, up from the current estimated high of 1.645 in “old crop” MY 2013/14
(up 50 mb from August) (Table 1 and Figure 4). United States’ soybean exports were 1.116 bb in MY 2006/07,
followed by 1.159 bb in MY 2007/08, 1.279 bb in MY 2008/09, 1.499 bb in MY 2009/10, 1.505 bb in MY
2010/11, 1.365 bb in MY 2011/12, 1.317 bb in MY 2012/13, the current record high of 1.645 bb in “old crop”
MY 2013/14, and now the projected new record high of 1.700 bb in “new crop” MY 2014/15.
Regarding the current pace of U.S. soybean export shipments and sales, as of September 18th, with 3 of 52
weeks (5.8%) of “new crop” MY 2014/15 complete, 25.5 mb of U.S. soybeans had been shipped for export –
equal to 1.5% of the USDA’s updated projection of 1.700 bb for “new crop” MY 2014/15 (Source: USDA
Foreign Agricultural Service U.S. Weekly Export Sales report ‐ http://apps.fas.usda.gov/export‐
sales/esrd1.html). United States’ export shipments will need to average 34.2 mb per week through the
remainder of the “new crop” 2014/15 marketing year to attain the USDA’s September 11th WASDE projection
of 1.700 bb. This compares to U.S. soybean export shipments of 7.5 mb and 15.3 mb which occurred during
the weeks ending September 11th and September 18th, respectively. As a result, these early, pre‐harvest U.S.
soybean export shipments were “behind pace” to meet the USDA marketing year U.S. forecast of 1.700 bb in
the “old crop” 2013/14 marketing year. However, it is expected that as U.S. soybean harvest progresses in
earnest in coming weeks with increased supplies becoming available for export, that the average weekly pace
of U.S. soybean exports will increase significantly from current levels.
Also as of September 18th an additional 1.004 billion bushels (bb) of U.S. soybeans had been sold for future
export sales in “new crop” 2014/15 marketing year. Adding together 25.5 mb in past shipments plus 1.004 bb
in forward sales amounts to 1.030 bb, or 60.6% of the USDA’s 1.700 bb U.S. soybean export target for “new
Page | 7
crop” MY 2014/15 in the September 11th USDA WASDE report, with only 5.8% (3/52 weeks) of the marketing
year completed.
This large amount of preharvest export sales are indicative of a type of “pent up” or “anticipated” U.S.
soybean export business that will be reflected in sizable export sales once U.S. soybean supplies become
physically available for shipment in coming weeks.
Seed Use: Forecast seed use of 92 mb in “new crop” MY 2014/15 is down from 99 mb in “old crop” MY
2013/14 (up 4 mb from June), but up from 89 mb in MY 2012/13, and from 90 mb in MY 2011/12 (Table 1 and
Figure 4).
Residual Use: Forecast residual use of 22 mb in “new crop” MY 2014/15 (up 3 mb from August) is up from
(94) mb (i.e., a negative 94 mb) estimated in “old crop” MY 2013/14, and from 8 mb in MY 2012/13. The
appearance of a negative residual number in the U.S. crop supply‐demand balance sheet is a common
occurrence for USDA Quarterly U.S. wheat balance sheets, and occurred previously in recent years in the MY
2011/12 U.S. soybean balance sheet (2) mb. However, the appearance of this large of a negative number for
the residual measurement in “old crop” MY 2013/14 raises questions about the source of measurement error
in the other major supply and demand categories.
USDA’s Anticipated Residual Adjustment: The USDA’s September 30th Quarterly Stocks report is expected
to provide some guidance on how the USDA will rectify this situation. It seems likely that the USDA will make
only minor adjustments in August 31, 2014 ending stocks for the “old crop” 2013/14 soybean marketing year –
leaving them near the 130 mb level projected in the September WASDE report. If this is the case, then the
USDA may choose to increase its projected 2013 production estimate by an amount similar to the indicated
negative residual for “old crop” MY 2013/14, increasing it from 3.289 bb up in the September WASDE to an
adjusted level of approximately 3.383 bb (i.e., 3.289 bb + 94 mb). If this occurs, the USDA’s projections of
ending stocks and percent (%) ending stocks‐to‐use would not change, but 2013 U.S. soybean production and
“old crop” MY 2013/14 total supplies would both increase by the specified amount of the negative residual
(i.e., 94 mb).
Total U.S. Soybean Use: Projected U.S. total use of 3.583 bb in “new crop” MY 2014/15 (up 42 mb from
September) would be a record high, and is up from 3.379 bb in “old crop” MY 2013/14 (up 10 mb from last
month) (Table 1 and Figure 4). Over the last eight (8) marketing years, total U.S. soybean use has been 3.081
bb in MY 2006/07, 3.056 bb in MY 2007/08, 3.047 bb in MY 2008/09, 3.361 bb in MY 2009/10, 3.280 bb in MY
2010/11, 3.155 bb in MY 2011/12, 3.103 bb in MY 2012/13, the current record high of 3.379 bb in “old crop”
MY 2013/14, and now the projected new record high of 3.583 bb in “new crop” MY 2014/15.
U.S. Soybean Ending Stocks, % Ending Stocks‐to‐Use, & Prices
U.S. soybean ending stocks for “new crop” MY 2014/15 are projected to be 475 mb, up 45 mb from the
September WASDE, and up 265% from 130 mb in ending stocks in “old crop” MY 2013/14 (down 10 mb).
Projected “new crop” MY 2014/15 ending stocks of 475 mb would be the largest amount since 449 mb in MY
2005/06, and 574 mb in MY 2007/08, and compares to 205 mb in MY 2007/08, 138 mb in MY 2008/09, 151 in
MY 2009/10, 215 mb in MY 2010/11, 169 mb in MY 2011/12, 141 mb in MY 2012/13, and the estimate of 130
mb in “old crop” MY 2013/14 (Table 1 and Figure 4).
Percent (%) ending stocks‐to‐use of 13.26% forecast for “new crop” MY 2014/15 (up from 12.14% in the
September WASDE) is up from the record low of 3.85% (down from 4.15% in September) now projected by the
USDA for “old crop” MY 2013/14 (Table 1 and Figures 5‐6). Over the last eight (8) years, U.S. soybean %
Page | 8
ending stocks‐to‐use have been 18.62% in MY 2006/07, 6.71% in MY 2007/08, 4.53% in MY 2008/09, 4.49% in
MY 2009/10, 6.55% in MY 2010/11, 5.36% in MY 2011/12, 4.54% in MY 2012/13, the estimate of 3.85% in “old
crop” MY 2013/14, and now the projection of 13.26% for “new crop” MY 2014/15.
U.S. average soybean prices for “new crop” MY 2014/15 are projected to be $9.00‐$11.00 per bushel
(midpoint = $10.00) – down sharply from $13.00 /bu in “old crop” MY 2013/14 (Table 1 and Figures 5‐6). Over
the last eight (8) marketing years, U.S. soybean prices have been $6.43 per bushel in MY 2006/07, $10.10 in
MY 2007/08, $9.97 in MY 2008/09, $9.59 in MY 2009/10, $11.30 in MY 2010/11, $12.50 in MY 2011/12, a
record high of $14.40 in MY 2012/13, $13.00 for “old crop” MY 2013/14, and now a range midpoint projection
of $10.00 / bu in “new crop” MY 2014/15.
I‐E. KSU U.S. Soybean Supply‐Demand Scenarios for “Next Crop” 2014/15
The USDA is projecting that “new crop” 2014/15 marketing year U.S. soybean prices will be down markedly
from the previous few years, in the range of $9.00‐$11.00 per bushel (midpoint of $10.00). Similarly, the
Kansas State University (KSU) forecasts provided here are decidedly conservative in terms of projected U …
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 2013 ‐ the beginning of the “current” 2013/14
marketing year.
Over the period of from September 1, 2013 through July 4, 2014, corn usage for ethanol production has
been on pace to reach 5.050 bb in “current” MY 2013/14, with the period of July 6th through August 31st
through the end of the current marketing year yet to occur. This estimate of 5.050 bb is less than the USDA’s
July 2014 WASDE report estimate of 5.075 bb of corn to be used for ethanol production during “current” MY
2013/14 (which had been raised 25 mb in the July WASDE report).
U.S. Corn Use as Distillers Grains: An estimate of the U.S. corn equivalent amounts of distillers grains
(DDGS) use for direct livestock feeding and exports is provided in Figure 6 – which shows estimated a) DDGS
corn equivalent U.S. domestic livestock feeding, and b) DDGS exports as well as other categories of U.S. corn
usage since MY 1989/90.
This analysis assumes 16.00 pounds of distillers dried grains and solubles (DDGS) per 56 pound bushel of
corn used in ethanol production – following from recent ethanol industry surveys. By these estimates since
MY 2010/11, approximately 1.051‐1.147 bb of U.S. corn equivalent bushel‐weights of DDGS are projected
either to have already been or are to be fed to U.S. livestock during each marketing year– i.e., 1.108 bb in
DDGS corn‐weight equivalents in MY 2010/11, 1.130 bb in MY 2011/12, 1.051 bb in MY 2012/13, 1.147 bb
projected for “current” MY 2013/14, and 1.142 bb in “new crop” MY 2014/15. Over the same five most recent
marketing years, DDGS exports in corn equivalent weights are estimated to range from 277 to 306 mb, with
approximately 301 bb of DDGS‐corn equivalents projected for the “new crop” MY 2014/15 U.S. corn marketing
year.
U.S. Corn Exports: Projected U.S. corn exports of 1.700 in “new crop” MY 2014/15 are down from the
estimate of 1.900 bb in “current year” MY 2013/14, but up sharply from 731 mb in MY 2012/13 – the 40 year
low since MY 1975/76 (Figure 4). According the USDA Foreign Agricultural Service (FAS) weekly export data,
ss of July 3rd, with 44 of 52 weeks (84.6%) of “current” MY 2013/14 complete, 1.542 bb of U.S. corn had been
shipped for export – equal to 81.2% of the USDA’s updated projection for “current” MY 2013/14 of 1.900 bb.
An additional 330 mb of U.S. corn had been sold for future export sales in the “current” 2013/14 marketing
year – prior to August 31, 2014 (the end of “current” MY 2013/14).
Adding together 1.542 bb in past shipments plus 330 mb in forward sales amounts to 1.872 bb, or 98.6% of
the USDA’s 1.900 bb U.S. corn export target for “current” MY 2013/14 in the July 11th USDA WASDE report
with 84.6% (44/52 weeks) of the marketing year completed. The strong pace of combined shipments and
sales motivated the USDA to increase its U.S. corn export projection by 150 mb from 1.750 bb to 1.900 bb back
in the May 9th WASDE report.
In addition, 168 mb of U.S. corn export sales have been reported for the “new crop” 2014/15 marketing
year – beginning September 1, 2014. This amount would equal 9.9% of the USDA’s projection of 1.700 bb for
“new crop” MY 2014/15 before the marketing year has began.
Page | 5
Non‐Ethanol FSI: Forecast non‐ethanol food, seed and industrial (FSI) use of 1.385 bb in “new crop” MY
2014/15 is equal to 1.385 bb in “current year” MY 2013/14, and compares to 1.405 bb in “last year’s” MY
2012/13, and 1.428 bb in MY 2011/12 (Figure 4).
Feed and Residual Use: Forecast U.S. feed and residual use of 5.200 bb in “new crop” MY 2014/15 is down
50 mb from the June WASDE report, while being up from 5.175 bb for “current” MY 2013/14 and up from
4.326 bb in MY 2012/13. The estimate for “current” MY 2013/14 was lowered 125 mb from the June WASDE
number. These levels of corn use for livestock feeding are somewhat correlated with the amounts of energy
feeds per grain consuming animal units reported by the USDA over the same time period (Figure 4).
Last month’s June Feed Outlook Report (http://www.ers.usda.gov/publications/fds‐feed‐outlook/fds‐
14e.aspx) the USDA Economic Research Service (ERS) indicates that over the MY 2012/13 through “new crop”
MY 2014/15 time period, the total amount of Energy Feeds in the U.S. – including corn, sorghum, barley, oats
and wheat – was estimated to be 125.7 million metric tons (mmt) in MY 2012/13 (87.5% corn), 141.4 mmt in
“current” MY 2013/14 (95.2% corn), and 142.5 mmt in “new crop” MY 2014/15 (93.6% corn). Over this same
three year period, total U.S. Grain Consuming Animal Units were estimated to be 91.8 million in MY 2012/13,
89.7 million in “current” MY 2013/14, and 90.1 million in “new crop” MY 2014/15.
As a result, U.S. Energy Feeds per Grain Consuming Animal Unit was 1.369 metric tons per animal unit
(mt/au) in MY 2012/13, and is estimated to be 1.576 mt/au in “current” MY 2013/14, and 1.582 mt/au in “new
crop” MY 2014/15. As the availability of feed grain and other energy feeds has increased or is expected to
increase from the drought stricken “short crop” year of MY 2012/13 to “current” MY 2013/14, and into “new
crop” MY 2014/15, the amount of energy feeds fed per animal unit and total feed use of U.S. corn has and is
expected to also increase.
Total Use of U.S. Corn for “new crop” MY 2014/15 is projected to be 13.335 bb – down 50 mb from June.
This amount of 13.335 bb in total use for “new crop” MY 2014/15 is down from the record high of 13.535 bb in
“current” MY 2013/14 (also down 100 mb from the June WASDE), but up from 11.111 bb in drought affected
MY 2012/13 (Table 1 and Figures 4 & 6). United States’ total corn use has varied based on available U.S. corn
supplies in recent years, trending from 12.737 bb in MY 2007/08, 12.056 bb in MY 2008/09, 13.066 bb in MY
2009/10 (3rd highest), 13.055 bb in MY 2010/11 (4th highest), 12.528 bb in MY 2011/12, 11.111 bb in MY
2012/13, the record high of 13.535 bb in “current” MY 2013/14, and the projected amount of 13.335 bb in
“new crop” MY 2014/15 (2nd highest).
U.S. Corn Ending Stocks, % Ending Stocks‐to‐Use, & Prices
U.S. corn ending stocks for “new crop” MY 2014/15 are projected to be 1.801 bb – up 75 mb from the June
WASDE. This forecast amount of U.S. corn ending stocks of 1.801 bb in “new crop” MY 2014/15 up from 1.246
bb in “current year” MY 2013/14 – which was raised 100 mb from the June WASDE report (Table 1 & Figure
4). “Current” MY 2013/14 U.S. corn ending stocks of 1.246 bb are less than 1.673 bb of U.S. corn ending stocks
for MY 2008/09, and 1.708 bb in MY 2009/10 – but at least marginally larger than the recent down‐trending
ending stocks figures of 1.128 bb in MY 2010/11, 989 mb in MY 2011/12, and 821 mb in “drought stricken” MY
2012/13.
Projected percent (%) ending stocks‐to‐use of 13.5% in “new crop” MY 2014/15 are up from 12.9% in the
June WASDE report (Table 1 & Figures 7‐8). United States’ corn % ending stocks‐to‐use declined from 13.9%
in MY 2008/09, to 13.1% in MY 2009/10, 8.6% in MY 2010/11, 7.9% in MY 2011/12, and to 7.4% in “drought
Page | 6
stricken” MY 2012/13, before increasing for the first time in six (6) years to 9.2% in “current” MY 2013/14 (up
from 8.4% in the June WASDE), and now to a projected level of 13.5% in “new crop” MY 2014/15.
U.S. average corn prices for “new crop” MY 2014/15 are projected to be in the range of $3.65‐$4.35 bu/ac
(midpoint = $4.00) (Table 1 & Figures 7‐8) – down from $3.85‐$4.55 (midpoint = $4.20) in the June WASDE
report. Since the beginning of the rapid expansion in U.S. ethanol production in 2006, U.S. corn prices have
moved higher, then lower, and higher again, changing from $3.04 /bu in MY 2006/07, to $4.20 in MY 2007/08,
$4.06 in MY 2008/09, $3.55 in MY 2009/10, $5.18 in MY 2010/11, $6.22 in MY 2011/12, and then up to the
record high of $6.89 in “drought stricken” MY 2012/13. But if the July 11th WASDE report projection holds
true, prices will now have declined for two consecutive years since the $6.89 record high in MY 2012/13, down
to $4.35‐$4.55 (midpoint = $4.45) in “current” MY 2013/14, and again down to $3.65‐$4.35 (midpoint = $4.00)
in “new crop” MY 2014/15. The USDA’s price projection for “current” MY 2013/14 is down from $4.45‐$4.65
(midpoint = $4.55) in the June 2014 WASDE report.
I‐D. KSU U.S. Corn Supply‐Demand Scenarios for “New Crop” MY 2014/15
There seems to be a tendency for early season forecasts by both the USDA and University grain market
economists to project full production scenarios. Looking back, a combination of drought, excessive moisture,
and resulting poor crop development conditions lead to lower than originally expected U.S. corn production in
2010, 2011, and 2012. And although the 2013 U.S. corn crop has ended up being record large, still it is
markedly lower than original early 2013 production forecast of 14.5+ bb.
Projections for 2014 U.S. corn production by the USDA and Kansas State University may very well follow
this same pattern of being overly optimistic – implicitly discounting the possibility of 2014 U.S. corn crop
production problems occurring later in the summer months. For example, KSU forecasts provided here are
decidedly conservative in terms of projected U …
February 5, 2014
Grain Market Outlook
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Marketing Year
Q4: Jun‐Aug
Q3: Mar‐May
Q2: Dec‐Feb
Q1: Sept‐Nov
Page | 6
2013. In addition, the USDA’s projection of 2013 U.S. corn harvested acres was raised to 87.668 ma, up
436,000 acres from December 2013, but still down 1.467 ma from the earlier projection of 89.135 ma in the
2013 September Crop Production report (Table 2 and Figure 4).
The USDA’s January U.S. corn yield projection of 158.8 bu/ac is down from 160.4 bu/ac in November‐
December 2013, but up from 155.3 bu/ac in September, 154.4 bu/ac in August, 156.5 bu/ac in June‐July, and
158.0 bu/ac in May. The January 2014 projection of 158.8 bu/ac is still down from the initial USDA projection
of 163.6 bu/ac made by the USDA at its February 22, 2013 Outlook Forum (Table 2 and Figure 5).
Projected 2013 U.S. corn production of 13.925 bb is down 64 mb from November‐December 2013, but
would still be a record high, and up 3.145 bb or 29% from 10.780 bb in 2012, and up from 12.360 bb in 2011
(Table 2). The USDA’s estimate of forecast accuracy in the USDA NASS January Crop Production report
projection of 13.925 bb – as stated in the January 10th WASDE report ‐ indicates a 67% confidence interval of
final 2013 U.S. corn production being within a +/– 0.5% range of 13.855 to 13.995 bb. Similarly, a 90%
confidence interval for the January 2014 U.S. corn production forecast would be within a +/– 0.8% range of
13.814 to 14.036 bb. If changes are eventually to be made in the projection of 2013 U.S. corn production, they
may not be made until the 2014 Crop Production Summary in January 2015.
U.S. Corn Total Supplies in MY 2013/14
The USDA estimates that total supplies of U.S. corn for MY 2013/14 are 14.781 bb – down 61 mb from
December. The decrease in projected MY 2013/14 total supplies resulted from beginning stocks of 821 mb
(down 3 mb), projected 2013 production of 13.925 bb (down 64 mb), and projected imports of 35 mb (up 5
mb) (Table 1).
Total supplies of 14.781 bb in MY 2013/14 would 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 “old crop” MY 2012/13. Beginning stocks of 821 mb are the lowest since
426 mb in MY 1996/97, and substantiate the market impact of tight corn supplies during the summer of 2013.
U.S. Corn Total Use & Use by Category in MY 2013/14
Total use of U.S. corn for MY 2013/14 is projected to be 13.150 bb – up 100 mb from the December
WASDE and up 200 mb from November, while being up 18% from 11.111 bb in “old crop” MY 2012/13 (Table 1
and Figure 6). Projected U.S. corn use for ethanol production of 5.000 bb in MY 2013/14 is up 50 mb from a
month ago, and up from 4.648 bb in MY 2012/13, while being equal to 5.000 bb in MY 2011/12. Forecast non‐
ethanol food, seed and industrial (FSI) use of 1.400 bb is down 50 mb from December, and compares to 1.396
bb in MY 2012/13, and 1.428 bb in MY 2011/12. Projected U.S. corn exports of 1.450 in MY 2013/14 are
unchanged from December, and up 98.4% from 731 mb a year ago in MY 2012/13 – the 39 year low since MY
1975/76.
Forecast U.S. feed and residual use of 5.300 bb is up 100 mb from November‐December and up 200 mb
from August‐September WASDE projections. Feed and residual use of 5.300 bb form MY 2013/14 is up 22.3%
from 4.335 bb in MY 2012/13, while being up 16.3% from 4.557 bb two years ago. U.S. total corn use of
13.150 bb in 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 MY 2012/13.
U.S. Ethanol Production and Corn Usage: 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 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 MY
2013/14 has ranged from 4.64‐5.26 bb on a weekly basis since early September 2013 ‐ the beginning of the
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2013/14 marketing year – averaging a projection of 4.994 bb for MY 2013/14 over the September 2013 –
January 24, 2014 time period. This projection of 4.994 bb is consistent to USDA’s January 2014 WASDE report
estimate of 5.000 bb of corn to be used for ethanol production during the 2013/14 marketing year.
U.S. Corn Use as Distillers Grains: An estimate of the U.S. corn equivalent amounts of distillers grains
(DDGS) use for direct livestock feeding and exports is provided in Figure 8 – which shows estimated a) DDGS
corn equivalent U.S. domestic livestock feeding, and b) DDGS exports as well as other categories of U.S. corn
usage since MY 1989/90.
This analysis assumes 17.75 pounds of distillers dried grains and solubles (DDGS) per 56 pound bushel of
corn used in ethanol production. By these estimates, approximately 1.2‐1.3 bb of U.S. corn equivalent bushel‐
weights of DDGS are projected either to have been or are to be fed to U.S. livestock each marketing year since
MY 2010/11 – i.e., 1.265 bb in DDGS corn‐weight equivalents in MY 2010/11, 1.286 bb DDGS corn‐weight
equivalents in MY 2011/12, 1.196 bb in MY 2012/13, and 1.286 bb projected for MY 2013/14. Over the same
four most recent marketing years, DDGS exports in corn equivalent weights are estimated to range from 277
to 326 mb.
U.S. Corn Ending Stocks, % Ending Stocks‐to‐Use, and Prices in MY 2013/14
U.S. corn ending stocks for MY 2013/14 are projected to be 1.631 bb, down 161 mb from December and
down 256 mb from November. However, the January 2014 projection of 1.631 bb is still up 810 mb (+99%)
from 821 mb ending stocks in MY 2012/13 (Table 2 & Figure 8). “New crop” MY 2013/14 U.S. corn ending
stocks of 1.631 bb are comparable to 1.673 bb of U.S. corn ending stocks for MY 2008/09, and 1.708 bb in MY
2009/10 – and to the recent downtrend in ending stocks of 1.128 bb in MY 2010/11, 989 mb in MY 2011/12,
and 821 mb in MY 2012/13.
Projected percent (%) ending stocks‐to‐use of 12.4% in MY 2013/14 is down from the December 2013
projection of 13.7%, and also down from the September‐November 2013 forecasts of 14.6%‐14.7%, but up
significantly from 7.4% in MY 2012/13 (Table 1 & Figures 9‐10). Over the last six (6) years, U.S. corn % ending
stocks‐to‐use declined from 13.9% in MY 2008/09, to 13.1% in MY 2009/10, 8.6% in MY 2010/11, 7.9% in MY
2011/12, and 7.4% in “old crop” MY 2012/13, before being projected now for the first time in five (5) years to
increase to 12.4% in MY 2013/14.
U.S. average corn prices for MY 2013/14 are projected to be $4.10‐$4.70 bu/ac (midpoint = $4.40) – down
from the record high of $6.89 /bu in MY 2012/13 (Table 1 & Figures 9‐10). Since the beginning of the rapid
expansion in U.S. ethanol production in 2006, U.S. corn prices have generally risen, from $3.04 /bu in MY
2006/07, to $4.20 in MY 2007/08, $4.06 in MY 2008/09, $3.55 in MY 2009/10, $5.18 in MY 2010/11, $6.22 in
MY 2011/12, up to $6.89 in MY 2012/13 – with a decline now forecast to the price range midpoint projection
of $4.40 in MY 2013/14.
I‐E. KSU U.S. Corn Supply‐Demand Scenarios for “Next Year’s Crop” MY 2014/15
The Tendency Toward Projecting Full Production in Early Season U.S. Corn Crop Forecasts
The initial USDA projection of 2014 U.S. corn production along with supply‐demand and price prospects
will be given at the 2014 USDA Agricultural Outlook Forum, February 20‐21, 2014 in Arlington, Virginia
(www.usda.gov/oce/forum). Since at least the winter of 2006/07 there has been a tendency for early season
projections of U.S. corn production by the USDA, private industry analysts, and University Extension Grain
Marketing Specialists to be for “full production”, i.e., assuming trend line U.S. corn yields or better and
generally large corn crops.
This has been especially the case beginning in the winter of 2010 when preseason U.S. pre‐season corn
production forecasts have been markedly larger than what final U.S. corn crop production totals have ended
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up being each year. A combination of drought and poor crop development conditions lead to lower than
originally expected U.S. corn production in 2010, 2011, and 2012. And although the 2013 U.S. corn crop has
ended up being record large, still it is markedly lower than original early 2013 production of 14.5+ bb.
Projections for 2014 U.S. corn production by the USDA and Kansas State University may very well follow
this same pattern of being overly optimistic – implicitly discounting the possibility of 2014 U.S. corn crop
production problems. Such early season forecasts for 2014 as these by KSU given below are decidedly
conservative in terms of projected U …