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Adjusted Expense Ratios
Expense Ratio59 1.07171.3660
Economic Total Expense Ratio60 1.32911.6935
Operating … Expense Ratio59 0.73360.9199
Economic Total Expense Ratio60 1.00351.1883
Operating …
April 25, 2016
Grain Market Outlook
U.S. corn crop – leading to reduced corn acreage and production prospects. Low corn
prices and limited corn net returns prospects may reduce U.S. 2016 corn acreage and production prospects.
Market factors such as a) economic and financial system disruptions impacting grain, energy, and other
commodity markets, b) U.S. farmer resistance to selling at low late‐April and May 2016 cash corn prices, and c)
concerns about possible “El Nino” or “El Nino‐La Nina transition”‐ related weather patterns in spring‐summer
2016 with an eye toward their possible negative impacts on 2016 crop production, could each still impact corn
market prices through summer‐fall 2016. Also, low feedgrain prices have resulted in lower input costs for U.S.
and Foreign livestock feeding and bioenergy users – leading to strong domestic and foreign feedgrain usage
and providing underlying support for U.S. corn exports. In the “current” 2015/16 marketing year the high
value of the U.S. dollar and prospects for a large 2016 South American corn crop have been significant limiting
factors for U.S. corn exports – although the U.S. dollar has been trending lower in recent weeks.
USDA Estimate for “Current” MY 2015/16: The USDA made several changes to the U.S. corn supply‐demand
balance sheet for “current crop” MY 2015/16 – with 2015 U.S. corn production of 13.601 bb, and total supplies
of 15.382 bb for MY 2015/16. Total use is projected to be 13.521 bb (down 24 million bushels or ‘mb’) Ethanol
use was projected to be 5.250 bb (up 25 mb), with non‐ethanol Food, Seed, and Industrial (FSI) use of 1.371 bb
(up 1 mb), exports of 1.650 bb, and feed and residual use of 5.250 bb (down 25 mb). Ending stocks are
forecast to be up 25 mb to 1.862 bb (13.77% S/U) in “current” MY 2015/16 – up from 1.731 bb (12.6% S/U) in
“old crop” MY 2014/15, and 1.232 bb (9.2% S/U) in MY 2013/14. U.S. corn average cash prices are forecast to
be in the range of $3.40‐$3.70 /bu. ($3.55 midpoint) versus $3.70 in “old crop” MY 2014/15, $4.46 in MY
2013/14, and $6.89 (record high) in MY 2012/13.
Adjusted USDA Forecast for “Next Crop” MY 2016/17: An adjusted version of the USDA’s “next crop” MY
2016/17 forecast for U.S. corn is presented here, building on the information presented by the USDA at its
Agricultural Outlook Forum in Arlington, VA on February 25‐26, with 2015 U.S. corn planted acres matching
the higher March 31st Prospective Planting report planted acreage forecast. Projected 2016 U.S. corn
plantings equal 93.601 ma – up 5.602 ma from 2015. Forecast 2016 harvested acres of 85.413 ma would be up
4.664 ma vs 2015. With projected yields of 168.0 bu/ac, 2016 U.S. corn production is projected to be a record
14.349 billion bushels (bb) – up from 13.829 bb in 2013, 14.216 bb in 2014, and 13.601 bb in 2015. With
forecast MY 2016/17 total use of 13.725 bb (2nd highest behind 13.748 bb in “old crop” MY 2014/15), and
projected ending stocks of 2.486 bb (18.11% S/U) – up from 1.862 bb (13.77% S/U) in “current crop” MY
2015/16, U.S. corn prices are projected by the USDA to be $3.45 /bu – down from the $3.55 /bu midpoint
estimate for “current” MY 2015/16 and subject to lowering in future USDA WASDE reports. This scenario is
given a 35% likelihood of occurring by KSU.
Page | 2
KSU Forecast for “Next Crop” MY 2016/17: Three alternative KSU‐Scenarios for U.S. corn supply‐demand and
prices are presented for “next crop” MY 2016/17, with each assuming a 1.5 ma downward adjustment in 2016
U.S. corn planted acres from the USDA’s March 31st Prospective Plantings report. A) KSU‐Scenario A (Lower
Acres & Trend Yield) (30% probability) assumes for “next crop” MY 2016/17: 92.101 ma planted, 84.404 ma
harvested, 164.5 bu/ac yield, 13.825 bb production, 15.727 bb total supplies, 13.640 bb total use, 2.087 bb
ending stocks, 15.30% S/U, & $3.20 /bu U.S. corn average price; B) KSU‐Scenario B (Lower Acres & Moderate
Drought) (25% prob.) assumes 92.101 ma planted, 84.404 ma harvested, 158.0 bu/ac yield, 13.279 bb
production, 15.186 bb total supplies, 13.575 bb total use, 1.611 bb ending stocks, 11.87% S/U, & $3.70 /bu U.S.
corn price; and C) KSU‐Scenario C (Lower Acres & Extreme Drought) (10% prob.) assumes 92.101 ma planted,
84.404 ma harvested, 150.0 bu/ac yield, 12.607 bb production, 14.519 bb total supplies, 13.382 bb total use,
1.137 bb ending stocks, 8.5% S/U, & $4.75 /bu U.S. corn price.
World Corn Supply‐Demand: World total supplies of 1,179.7 million metric tons (mmt) are projected for
“current” MY 2015/16, down from 1,187.9 mmt in “old crop” MY 2014/15, but up from 1,123.9 mmt in MY
2013/14. Projected World corn ending stocks of 208.9 mmt (21.5% S/U) in “current” MY 2015/16 are up from
207.6 mmt (21.2% S/U) in “old crop” MY 2014/15, and from 175.0 mmt (18.4% S/U) in MY 2013/14.
…
September 21, 2015
Grain Market Outlook
al wheat production
problems and supply prospects in Australia, India, Russia, and elsewhere, b) ongoing geopolitical problems in
the Black Sea region and Middle East, and c) uncertainty in World economic, financial and currency markets.
Even so, the “large crop‐over supply” situation existing in World & U.S. wheat markets continues to negatively
influence wheat market price prospects. For wheat prices to recover in late 2015‐2016 it is likely that a
significant World wheat production problem and/or trade disruption would need to occur. In the United
States the ongoing strength of the U.S. dollar is an important negative factor for U.S. wheat exports and price
prospects. The USDA 2015 Small Grains Summary and Grain Stocks reports to be released on September 30th
will provide the next set of U.S. wheat production and usage data to consider for wheat markets.
USDA U.S. Wheat Supply‐Demand & Price Forecast: For U.S. wheat in the “new crop” 2015/16 marketing
year, the USDA maintained its projection that there would be 55.079 million acres (ma) planted, 48.454 ma
harvested, 44.1 bu/ac yields, 2.136 billion bushels (bb) production, and 3.014 bb total supplies, and 200 mb
feed & residual use. However, the USDA lowered its forecast of U.S. exports to 900 million bushel (mb) (down
25 mb) – dropping total use to 2.139 mb (down 25 mb), raising ending stocks to 875 mb (up 25 mb), raising
ending‐stocks‐to‐use to 40.9% (up from 39.3% in August and 38.5% in July, up to the highest level since 48.6%
in MY 2009/08). The USDA lowered is projection of U.S. average wheat prices for “new crop” MY 2015/16 to
the range of $4.65‐$5.55 /bu. (midpoint =$5.00) – the lowest since $4.87 /bu in MY 2009/10.
KSU U.S. Wheat Supply‐Demand & Price Forecast: Kansas State University projections of “new crop” MY
2015/16 supply‐demand balances and prices are represented in two scenarios: A) “Lower Exports” Scenario:
70% prob. of the same U.S. wheat production estimates as the USDA, but with U.S. exports dropping to “old
crop” 2014/15 levels, i.e., 850 mb exports, 925 mb ending stocks, 44.3% S/U, and $4.75 /bu U.S. average price.
B) “Higher Exports” Scenario: 30% prob. of production prospects equal to the USDA’s but with higher U.S.
wheat exports, i.e., 1.000 bb exports, 790 mb ending stocks, 35.2% S/U, and $5.75 /bu U.S. average price.
USDA World Wheat: The expectation of large World wheat supplies and stocks are a “burden” on World
wheat markets – driving prices lower. Record World total wheat supplies of 942.9 mmt in “new crop” MY
2015/16 are up from the previous record of 918.8 mmt in “old crop” MY 2014/15, and from 892.2 mmt in MY
2013/14. Projected record World wheat ending stocks in “new crop” MY 2015/16 of 226.6 mmt (31.6% S/U)
are also record high, and up from 211.3 mmt (29.9% S/U) in “old crop” MY 2014/15, and from 193.6 mmt
(27.7% S/U) in MY 2013/14. For perspective, these supply‐demand figures can be compared to the historic
minimum World wheat ending stocks of 128.8 mmt and stocks‐to‐use of 21.0% S/U in MY 2007/08.
Page | 2
I. U.S. Wheat Market Situation & Outlook
I‐A. September 11th USDA Reports & “New Crop” MY 2015/16 Projections
On September 11th the USDA World Agricultural Outlook Board (WAOB) released its September 2015
World Agricultural Supply and Demand Estimates (WASDE) report – containing U.S. and World wheat supply‐
demand and price projections for the 2013/14, “old crop” 2014/15, as well as the “new crop” 2015/16
marketing years. The “new crop” 2015/16 marketing year for U.S. wheat began on June 1, 2015 and will last
through May 31, 2016.
On September 30th the USDA National Agricultural Statistical Service (NASS) will release its 2015 Small
Grains Summary and Grain Stocks reports, both of which could impact U.S. wheat supply‐demand estimates
and possibly wheat prices. Of particular importance in the Small Grains Summary report will be the final
estimate of 2015 U.S. wheat acreage, yield, and production. The particular focus of wheat markets will be on
production of U.S. durum and spring wheat crops in the northern states, and the U.S. winter wheat crop in the
Pacific Northwest.
I‐B. CME Kansas Hard Red Winter Wheat Futures & U.S. Dollar Index
Since market highs of $6.28 ¾ per bushel for the CME DECEMBER 2015 Kansas hard red winter wheat
futures contract occurred on June 30, 2015, December futures have trended sharply lower – down to a low of
$4.65 ¾ on September 4, 2015 (Figure 1). The slow pace of U.S. wheat exports caused by record large World
wheat production prospects in “new crop” MY 2015/16 and the historically high value of the U.S. dollar have
been key factors causing the recent sharp decline in CME DECEMBER 2015 Kansas HRW wheat prices.
Figure 1. DECEMBER 2015 & JULY 2016 CME Kansas Wheat Futures Price Charts …
September 17, 2015
Grain Market Outlook
I‐C. U.S. Corn Supply‐Demand
U.S. Corn Acreage, Yield & Production
The USDA’s projections of 2015 U.S. corn planted acres from the March 31st Prospective Plantings report
were adjusted downward in the USDA June 30th Acreage report, and have since been used without adjustment
in the July 10th, August 12th, and September 11 USDA Crop Production and WASDE reports. In the June 30,
2015 USDA Acreage report and subsequent July, August, and September Crop Production reports the USDA
projected that 2015 U.S. corn total planted acreage would be 88.897 million acres (ma), down 302,000 acres
from 89.199 ma projected earlier in the March 31st USDA Prospective Plantings report. This projection of
88.897 ma of 2015 U.S. corn planted is down 1.700 ma (‐1.9%) from 90.597 ma in 2014, down 6.468 ma (‐
6.8%) from 95.365 ma in 2013, down 8.394 ma (‐8.6%) from the record high of 97.291 ma in 2012, and also
down from 91.921 ma in 2011 (Table 1 and Figure 3).
The USDA projected that 2015 U.S. corn harvested acreage would be 81.101 million acres (ma), down
2.035 ma (‐2.4%) from 83.136 ma in 2014, down 6.350 ma (‐7.3%) from the record high of 87.451 ma in 2013,
down 6.534 ma (‐7.2%) from 87.365 ma in 2012, and down from 83.981 ma in 2011 (Table 1 and Figure 3).
The USDA implicitly projected that the proportion of harvested‐to‐planted acreage in 2015 is 91.2%, down
from 91.8% in 2014, and from 91.7% in 2013, but up from 89.9% in drought‐stricken 2012.
The USDA forecast 2015 U.S. average corn yields to be 167.5 bushels per acre (bu/ac) – down 1.3 bu/ac
from the USDA’s August projection, but still less than the record high of 171.0 bu/ac in 2014 (Table 1 and
Figure 4). Although this September 2015 USDA projection of 2015 U.S. corn yields of 167.5 bu/ac is down from
the record 171.0 bu/ac in 2014, it would still be the second highest U.S. corn yield to date, being up from 158.1
bu/ac in 2013, the drought affected 2012 low yield of 123.1 bu/ac., 147.2 bu/ac in 2011, 152.8 bu/ac in 2010,
and still up from the previous historic record high of 164.7 bu/ac in 2009.
Based on this combination of USDA projections for 2015 planted acreage (88.897 ma), harvested acreage
(81.101 ma), and yield (167.5 ma – USDA), projected 2015 U.S. corn production would be 13.585 billion
bushels (bb) – down 101 million bushels (mb) from the USDA’s August projections, and down from the record
high of 14.216 bb in 2014, and the previous record high of 13.829 bb in 2013. However, this projection of
13.585 bb in 2015 would still be up from 10.755 bb in 2012, 12.314 bb in 2011, 12.425 bb in 2010, and 13.067
bb in 2009 (Table 1).
U.S. Corn Total Supplies
The USDA projects that total supplies of U.S. corn for “new crop” MY 2015/16 are 15.347 bb – down 141
million bushels (mb) from the August 12th WASDE report. This projection of 15.347 bb for “new crop” MY
2015/16 results from beginning stocks of 1.732 bb, projected 2015 production of 13.585 bb, and projected
imports of 30 mb (Table 1 and Figure 5). Since the beginning of the expansion in U.S. ethanol production in
2006‐2007, total supplies of U.S. corn have been 14.362 bb in MY 2007/08, 13.729 bb in MY 2008/09, 14.749
bb in MY 2009/10, 14.161 bb in MY 2010/11, 13.471 bb in MY 2011/12, 11.904 bb in “short crop” MY 2012/13,
Page | 5
14.686 bb in MY 2013/14, the estimated highest amount on record of 15.477 bb in “old crop” MY 2014/15, and
the forecast 2nd highest amount on record of 15.347 bb in “new crop” MY 2015/16.
The USDA forecast of beginning stocks of 1.732 bb in “new crop” MY 2015/16 is down 40 mb from the
August 12th WASDE report, but up substantially from 1.232 bb in beginning stocks in “old crop” MY 2014/15,
821 mb in MY 2013/14, 989 mb in MY 2012/13, and 1.128 bb in MY 2011/12 – while being up at least
marginally from 1.708 bb in MY 2010/11, 1.673 bb in MY 2009/10, and 1.624 bb in MY 2008/09. This amount
of beginning stocks in “new crop” MY 2015/16 of 1.772 bb is up considerably from the low of 426 mb that
occurred in MY 1996/97, and is the highest amount since 1.967 bb in MY 2006/07 and 2.114 bb in MY 2005/06
(Table 1 and Figure 5).
Projected imports of 30 mb in “new crop” MY 2015/16 are equal to 30 mb in “old crop” MY 2014/15, down
from 36 mb in MY 2013/14 (the 2nd highest on record), and are down sharply from the record high of 160 mb
in the drought‐stressed 2012/13 marketing year. These amounts of U.S. corn imports are comparable to 29
mb in MY 2011/12, and 28 mb in MY 2010/11, but up from 8 mb in MY 2009/10.
U.S. Corn Use by Category & Total Use
U.S. Ethanol Production and Corn Usage: Projected U.S. corn use for ethanol production of 5.250 bb in
“new crop” MY 2015/16 is unchanged from August, but up 50 mb from July) is up from 5.205 bb in “old crop”
MY 2014/15 (up 5 mb), and up from 5.124 bb in MY 2013/14 (down 10 mb), 4.641 bb in MY 2012/13, and
5.000 bb in MY 2011/12 (Table 1 and Figures 6‐7).
Figure 7 shows weekly U.S. oxygenated plant production of fuel ethanol as reported by the U.S. Energy
Information Administration (www.eia.gov) with a calculated estimate of corn use developed by Kansas State
University. Assuming 2.83 gallons of ethanol produced per bushel of corn (equaling the calculated conversion
of U.S. corn into ethanol in January 2015), these calculations indicate that the equivalent projected annual rate
of U.S. corn used for ethanol production for “old crop” MY 2014/15 ranged from 4.830‐5.449 bb on a weekly
basis since early September 2014 ‐ the beginning of the “old crop” 2014/15 marketing year. For the first one‐
half week of ethanol production in the “new crop” 2015/16 marketing year ending on September 4, 2015, corn
usage for ethanol production was on pace to reach 5.252 bb in “new crop” MY 2015/16 – essentially equal to
the USDA’s September 11, 2015 WASDE report estimate of 5.250 bb of corn to be used for ethanol
production.
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 the estimated
amount of 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. According to these KSU
estimates, since MY 2010/11 approximately 0.992‐1.130 of U.S. corn equivalent bushel‐weights (bbeqwt) 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 bbeqwt in DDGS corn‐weight equivalents in MY 2010/11, 1.130 bbeqwt in MY 2011/12, 1.004 bbeqwt in
MY 2012/13, 0.992 bbeqwt in MY 2013/14, 1.008 bbeqwt in both “old crop” MY 2014/15, and 1.016 bbeqwt in “new
crop” MY 2015/16.
Over the five most recent marketing years, DDGS exports in million bushels of corn equivalent weights
(mbeqwt) are estimated to range from 299 to 483 mb, – i.e., 326 mbeqwt in DDGS corn‐weight equivalents in MY
Page | 6
2010/11, 299 mbeqwt in MY 2011/12, 322 mbeqwt in MY 2012/13, 472 mbeqwt in MY 2013/14, an estimated
record 479 mbeqwt in “old crop” MY 2014/15, and a near record high of 484 mbeqwt in “new crop” MY 2015/16.
U.S. Corn Exports: Projected U.S. corn exports of 1.850 bb in “new crop” MY 2015/16 is down from 1.875
bb in “old crop” MY 2014/15 (up 25 mb), less than 1.920 bb in MY 2013/14, and up sharply from 730 mb in MY
2013/14 – the 41 year low (i.e., since MY 1975/76) (Table 1, Figures 6 and 8).
According to USDA Foreign Agricultural Service (FAS) weekly export data (http://apps.fas.usda.gov/export‐
sales/esrd1.html), as of September 3rd, through the first 1/2 week of “new crop” MY 2015/16 (0.5 of 52 weeks),
10.5 mb of U.S. corn had been physically shipped for export – equal to 0.6% of the USDA’s projection of 1.850
bb for “new crop” MY 2015/16. An additional 336.15 mb of U.S. corn had been pre‐sold for future export
shipments during the remainder of “new crop” 2014/15 marketing year – after August 31, 2015 (the end of
“old crop” MY 2014/15).
Adding together 10.5 mb in past shipments plus 336.15 mb in forward sales amounts to 346.7 mb, or
18.7% of the USDA’s 1.850 bb U.S. corn export target for “new crop” MY 2015/16 in the September 11th USDA
WASDE report with 0.96% (0.5/52 weeks) of the marketing year completed. United States’ corn export
shipments will need to average 35.7 mb per week for the remaining 51.5 weeks of the “new crop” 2015/16
marketing year to achieve the USDA’s 1.850 bb projection.
Non‐Ethanol FSI: Forecast non‐ethanol food, seed and industrial (FSI) use of 1.380 bb in “new crop” MY
2015/16 is up 5 mb from August and up 20 mb from July, and is greater than 1.365 bb in “old crop” MY
2014/15 (up 10 mb from August), and compares to 1.369 bb in MY 2013/14, and 1.397 bb in MY 2012/13
(Table 1, Figures 6 and 8).
Feed and Residual Use: Forecast U.S. feed and residual use of 5.275 bb in “new crop” MY 2015/16 (down
25 mb from August but equal to July) is down 25 mb from 5.300 bb for “old crop” MY 2014/15, but up from
5.041 bb in MY 2013/14 (up 11 mb), 4.315 bb in MY 2012/13, and 4.519 bb in MY 2011/12 (Table 1, Figures 6
and 8). These levels of corn use for livestock feeding are somewhat correlated with the amounts of energy
feeds per grain consuming animal units (GCAUs) reported by the USDA over the same time period as illustrated
in the following information.
In the USDA September 15th Feed Outlook Report (http://usda.mannlib.cornell.edu/usda/Old Crop/FDS/FDS‐09‐15‐2015.pdf)
and other online resources the USDA Economic Research Service (ERS) indicates that over the MY 2012/13
through “new crop” MY 2015/16 time period, the total amount of Energy Feeds in the U.S. – including corn,
sorghum, barley, oats and wheat – is estimated to have been 134.7 million metric tons (mmt) in MY 2013/14
(95.0% corn), and 144.6 mmt in “old crop” MY 2014/15 (93.1% corn), and are forecast to be 143.9 mmt in
“new crop” MY 2015/16 (93.1% corn). Over this same 3 year period, total U.S. Grain Consuming Animal Units
(GCAUs) are estimated to have been 91.0 million in MY 2013/14, and 93.3 million in “old crop” MY 2014/15,
and are forecast to be 95.7 million in “new crop” MY 2015/16.
As a result, U.S. Energy Feeds per Grain Consuming Animal Unit is estimated to have been 1.480 metric
tons per animal unit (mt/au) in MY 2013/14, and 1.550 mt/au in “old crop” MY 2014/15, and is projected to be
1.504 mt/au in “new crop” MY 2015/16. 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 the successive record
“large crop” years of MY 2013/14, “old crop” MY 2014/15, and now into the expected third consecutive large
crop year in “new crop” MY 2015/16 for corn and other aggregated feedgrains, the amount of energy feeds
Page | 7
fed per animal unit and total feed use of U.S. corn has risen – contributing to downward pressure on the prices
of U.S. corn and other feedgrains.
Total Use of U.S. Corn for “new crop” MY 2015/16 is projected to be a record high 13.755 bb (down 20 mb
from August) – up marginally from the previous record high of 13.745 bb in “old crop” MY 2014/15 (up 40 mb
from August and up 49 mb from July) (Table 1 and Figures 6 and 8). United States’ total corn use has varied
widely in recent marketing years – due largely to changes in available U.S. corn supplies. Corn use in the U.S.
over time has changed from 12.737 bb in MY 2007/08, to 12.008 bb in MY 2008/09, 13.041 bb in MY 2009/10,
13.033 bb in MY 2010/11, 12.482 bb in MY 2011/12, 11.083 bb in MY 2012/13, the one time record high of
13.454 bb in MY 2013/14, the previous record high amount of 13.745 bb in “old crop” MY 2014/15, and now
the new projected record high of 13.755 bb in “new crop” MY 2015/16.
U.S. Corn Ending Stocks, % Ending Stocks‐to‐Use, & Prices
U.S. corn ending stocks for “new crop” MY 2015/16 are projected to be 1.592 bb (down 121 mb from
August, but down only 7 mb from July). Ending stocks of 1.592 bb in “new crop” MY 2015/16 would be down
140 mb from 1.732 bb in “old crop” MY 2014/15 (also down 40 mb from August) (Table 1 & Figure 9). Since
MY 2006/07 (1.304 bb), U.S. corn ending stocks have been 1.624 bb in MY 2007/08, 1.673 bb in MY 2008/09,
1.708 bb in MY 2009/10, 1.128 bb in MY 2010/11, 989 mb in MY 2011/12, 821 mb in “drought stricken” MY
2012/13, 1.232 bb in MY 2013/14, and 1.722 bb in “old crop” MY 2014/15, and now are forecast to be 1.592
bb in “new crop” MY 2015/16.
Projected percent (%) ending stocks‐to‐use of 11.57% in “new crop” MY 2015/16 is down from 12.44% in
the August WASDE report, and down from 12.60% in “old crop” MY 2014/15 (Table 1 and Figures 9 and 10).
On a year‐by‐year basis, U.S. corn % ending stocks‐to‐use trended downward from 12.75% in MY 2007/08 and
13.94% in MY 2008/09, to 13.10% in MY 2009/10, 8.65% in MY 2010/11, 7.92% in MY 2011/12, and then down
to 7.41% in “drought stricken” MY 2012/13. Then U.S. corn ending stocks‐to‐use increased for the first time in
six (6) years to 9.16% in MY 2013/14, and then increased again to 12.60% in “old crop” MY 2014/15 – with a
projected decline to 11.57% in “new crop” MY 2015/16.
U.S. average corn prices for “new crop” MY 2015/16 are projected to be in the range of $3.45‐$4.05 bu/ac
(midpoint = $3.75) – up marginally from a projection of $3.35‐$3.95 ($3.65 midpoint) by the USDA in last
month’s August 12th WASDE report, but equal to the July 10th WASDE report (Table 1 and Figures 9 and 10).
Since the beginning of the rapid expansion in U.S. ethanol production in 2006, U.S. corn prices have moved
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.
However, if the September 11th WASDE projection holds true, prices will now have declined year‐by‐year since
the $6.89 record high in MY 2012/13, down to $4.46 in MY 2013/14, $3.68 in “old crop” MY 2014/15, and now
to a projected range of $3.45‐$4.05 (midpoint = $3.75) in “new crop” MY 2015/16.
I‐D. KSU Corn Market Scenarios for “New Crop” MY 2015/16
Kansas State University Research and Extension has provided forecasts of U.S. corn supply‐demand
balances and prices for the “new crop” 2015/16 marketing year to complement and expand upon those of the
USDA, with details provided below. Three probability‐weighted Kansas State University (KSU) projections are
provided.
Page | 8
The first scenario is based on USDA reported 2015 U.S. corn planted acreage with a 101 ma reduction from
the USDA’s forecast of 2015 U.S. harvested acres, and with a 2015 U.S. corn yield of 167.5 bu/ac (same as the
USDA) and 13.568 bb of 2015 U.S. corn production – and is given a 45% probability of occurring in 2015. The
second scenario is based on the same U.S. corn acreage estimates as in the first scenario, but with a lower U.S.
corn yield of 165.0 bu/ac and 13.356 bb of 2015 U.S. corn production – and is given a 50% probability of
occurring in 2015. The third scenario is based on the same USDA planted acreage projections as the first two
scenarios, but with a more pronounced short crop “low yield” of 155.0 bu/ac and 12.555 bb of 2015 U.S. corn
production – and is given a 5% probability of occurring in 2015.
KSU Scenario #1 – A “Normal Crop” of 13.568 bb with 45% Likelihood of Occurring
For “new crop” MY 2015/16, this “normal crop” yield KSU projection reflects the likelihood of a reduction
in U.S. corn harvested acreage in 2015 (down approximately 100 ma from current USDA projections), and how
U.S. corn yields that are marginally lower than USDA’s most recent September 11th NASS Crop Production
report projection would impact 2015 U.S. corn production, supply‐demand balances and prices in the coming
“new crop” 2015/16 marketing year, i.e., September 1, 2015 through August 31, 2016. Following is the KSU
“normal crop” U.S. corn supply‐demand and price scenario for “new crop” MY 2015/16 – given a 45%
probability of occurring (4.5 out of 10 odds).
1st KSU Scenario for “New Crop” MY 2015/16 U.S. Corn Supply/Demand & Prices
Estimated Probability of Occurring = 45% …
April 30, 2015
Grain Market Outlook
I‐C. U.S. Corn Supply‐Demand – Focus on “New Crop” 2015/16 Projections
U.S. Corn Acreage, Yield & Production
In the March 31, 2015 USDA Prospective Plantings report the USDA projected that 2015 U.S. corn total
planted acreage would be 89.199 million acres (ma), down 2.398 ma (down 1.5%) from 90.597 ma in 2014,
down 6.166 ma (‐6.5%) from 95.365 ma in 2013, down 8.092 ma (‐8.3%) from 97.291 ma in 2012, and down
from 91.921 ma in 2011 (Table 1 and Figure 3).
Assuming the average harvested‐to‐planted acreage for all U.S. corn over the 2007‐2014 period of 91.6%,
2015 U.S. corn harvested acreage would be 81.706 ma, down 1.430 ma (‐1.7%) from 83.136 ma in 2014, down
5.745 ma (‐6.6%) from 87.451 ma in 2013, down 5.659 ma (‐6.5%) from 87.365 ma in 2012, and down from
83.981 ma in 2011.
The 2014 U.S. average corn yield of 171.0 bushels per acre (bu/ac) is a record high and unchanged from
the January‐March USDA reports, but is higher than the 166.8 bu/ac estimate in the 2015 USDA Agricultural
Outlook Forum estimate given on February 19‐20, 2015 in Arlington, Virginia (Table 1 and Figure 4). This early
2015 USDA projection of 166.8 bu/ac is up from 158.1 bu/ac in 2013, the drought affected 2012 low yield of
123.1 bu/ac., 147.2 bu/ac in 2011, 152.8 bu/ac in 2010, and and up from the previous record high of 164.7
bu/ac in 2009.
Based on this combination of projections for 2015 planted acreage (89.199 ma – from the USDA),
harvested acreage (81.706 ma – a KSU assumption based on recent historic percent harvested‐to‐planted
acres), and yield (166.8 ma – USDA), 2015 U.S. corn production would be 13.629 billion bushels (bb) – down
from the record high of 14.206 bb 2014, and the previous record high of 13.829 bb in 2013 – but up from
10.755 bb in 2012, 12.360 bb in 2011, 12.447 bb in 2010, and 13.092 bb in 2009 (Table 1).
U.S. Corn Total Supplies
The USDA projects that total supplies of U.S. corn for “current crop” MY 2014/15 are a record high 15.472
bb – resulting from beginning stocks of 1.232 bb, projected 2014 production of 14.216 bb, and projected
imports of 25 million bushel (mb) (Table 1 and Figure 5). For “new crop” MY 2015/16, Total supplies are
expected to be “equal‐or‐marginally higher at 15.481 bb – resulting from beginning stocks of 1.827 bb,
projected 2015 production of 13.629 bb, and projected imports of 25 million bushel (mb) in “new crop” MY
2015/16 (Table 1). Total supplies of near 15.5 bb in “current crop” MY 2014/15 and “new crop” MY would
both be record highs relative to recent years, being comparable to 14.362 bb in MY 2007/08, 13.729 bb in MY
2008/09, 14.774 bb in MY 2009/10, 14.182 bb in MY 2010/11, 13.517 bb in MY 2011/12, 11.904 bb in “short
crop” MY 2012/13, and 14.686 bb in MY 2013/14.
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The implicit USDA forecast of beginning stocks of 1.827 bb in “new crop” MY 2015/16 (equal to ending
stocks from “current year” MY 2014/15) are up substantially from 1.232 bb in beginning stocks in “current
crop” MY 2014/15, 821 mb in MY 2013/14, 989 mb in MY 2012/13, and 1.128 bb in MY 2011/12, and at least
moderately larger than 1.708 bb in MY 2010/11, 1.673 bb in MY 2009/10, and 1.624 bb in MY 2008/09. This
amount of beginning stocks in “new crop” MY 2015/16 of 1.827 bb is up considerably from the low of 426 mb
that occurred in MY 1996/97, and the highest since 1.967 bb in MY 2006/07 and 2.114 bb in MY 2005/07
(Table 1 and Figure 5).
Imports of 25 mb in “current crop” MY 2014/15 are projected to be down from 36 mb in MY 2013/14 (the
2nd highest on record), and are also down sharply from the record high of 160 mb in the drought‐stressed
2012/13 marketing year. The KSU projection of 25 mb in imports in “new crop” MY 2015/16 would be equal to
the amount in “current crop” MY 2014/15. These amounts of U.S. corn imports are comparable to 29 mb in
MY 2011/12, and 28 mb in MY 2010/11.
U.S. Corn Use by Category & Total Use
U.S. Ethanol Production and Corn Usage: Projected U.S. corn use for ethanol production of 5.200 bb in
“current crop” MY 2014/15 is unchanged from March, but down 50 mb from 5.250 bb in February, but still up
from 5.175 bb in January and from 5.150 bb in the December 2014 WASDE report. These adjustments in the
USDA projections since December 2014 are due to a) low corn input prices, b) at least moderate strength in
distillers grains co‐product prices, and c) increased projections of 2015 U.S. gasoline consumption released in
recent months (Table 1 and Figures 6‐7). This projection of 5.200 bb in “current crop” MY 2014/15 is up from
5.134 bb in MY 2013/14, 4.641 bb in MY 2012/13, and 5.000 bb in MY 2011/12. The USDA projected that
5.225 bb of U.S. corn would be used in ethanol production in “new crop” MY 2015/16 at its Agricultural
Outlook Forum on February 19‐20, 2015 in Arlington, Virginia.
Figure 7 shows weekly U.S. oxygenated plant production of fuel ethanol as reported by the U.S. Energy
Information Administration (www.eia.gov) with a calculated estimate of corn use developed by Kansas State
University. Assuming 2.83 gallons of ethanol produced per bushel of corn (equaling the calculated conversion
of U.S. corn into ethanol in January 2015), these calculations indicate that the equivalent projected annual rate
of U.S. corn used for ethanol production for “current crop” MY 2014/15 has ranged from 4.772‐5.374 bb on a
weekly basis since early September 2014 ‐ the beginning of the “current crop” 2014/15 marketing year. Over
the period of from September 1, 2014 through April 24, 2015, corn usage for ethanol production was been on
pace to reach 5.117 bb in “current crop” MY 2014/15. This estimate of 5.117 bb is 83 mb less than the USDA’s
April 9, 2015 WASDE report estimate of 5.200 bb of corn to be used for ethanol production during “current
crop” MY 2014/15, with 34 of 52 weeks (65.4%) of the marketing year completed.
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 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 0.993‐1.130 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, 1.004 bb in MY 2012/13, 993 mb
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projected for MY 2013/14, and a projection of 1.006 bb in “current crop” MY 2014/15. Over the five most
recent marketing years, DDGS exports in corn equivalent weights are estimated to range from 299 to 479 mb,
– i.e., 326 mb in DDGS corn‐weight equivalents in MY 2010/11, 299 mb in MY 2011/12, 322 mb in MY 2012/13,
473 mb estimated for MY 2013/14, and a projection of a record high 479 mb in “current crop” MY 2014/15.
U.S. Corn Exports: Projected U.S. corn exports of 1.800 bb in “current crop” MY 2014/15 were unchanged
in March, but up 50 mb from the February WASDE report. This projection of 1.800 bb for MY 2014/15 is down
from the estimate of 1.917 bb in MY 2013/14, but are up sharply from 730 mb in MY 2012/13 – the 40 year
low since MY 1975/76 (Table 1, Figures 6 and 8). The USDA projected that 1.850 bb of U.S. corn would be
exported in “new crop” MY 2015/16 at its Agricultural Outlook Forum on February 19‐20, 2015 in Arlington,
Virginia.
According to the USDA Foreign Agricultural Service (FAS) weekly export data (http://apps.fas.usda.gov/export‐
sales/esrd1.html), as of April 23rd, through the 34th week of “current crop” MY 2014/15 (34 of 52 weeks), 1.057 bb
of U.S. corn had been physically shipped for export – equal to 58.7% of the USDA’s updated projection for
“current crop” MY 2014/15 of 1.800 bb. An additional 530.5 mb of U.S. corn had been pre‐sold for future
export shipments during the “current crop” 2014/15 marketing year – prior to August 31, 2015 (the end of
“current crop” MY 2014/15).
Adding together 1,056.7 mb in past shipments plus 530.5 mb in forward sales amounts to 1,587.2 mb, or
88.2% of the USDA’s 1.800 bb U.S. corn export target for “current crop” MY 2014/15 in the April 9th USDA
WASDE report with 65.4% (34/52 weeks) of the marketing year completed. United States’ corn exports will
need to average 41.29 mb per week for the remainder of the “current crop” 2014/15 marketing year to
achieve the USDA’s 1.800 bb projection. This compares to 41.0 mb and 50.0 mb of export shipments for the
weeks ending April 16th and April 23rd, respectively – i.e., equal to and ahead of the pace needed to meet the
USDA’s export projection, respectively.
Non‐Ethanol FSI: Forecast non‐ethanol food, seed and industrial (FSI) use of 1.395 bb in “current crop”
MY 2014/15 is greater than 1.367 bb in MY 2013/14, and compares to 1.397 bb in MY 2012/13, and 1.428 bb
in MY 2011/12 (Table 1, Figures 6 and 8). The USDA projected that 1.410 bb of U.S. corn would be used for
Non‐ethanol FSI production in “new crop” MY 2015/16 at its Agricultural Outlook Forum on February 19‐20,
2015 in Arlington, Virginia.
Feed and Residual Use: Forecast U.S. feed and residual use of 5.250 bb in “current crop” MY 2014/15 is
down 50 mb from March, and down 125 mb from 5.375 bb in the December 2014 WASDE (Table 1, Figures 6
and 8). This projection of 5.250 bb in “current crop” MY 2014/15 is up from 5.036 bb for MY 2013/14, 4.315
bb in MY 2012/13, and 4.557 bb in MY 2011/12. 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 as shown in what follows. The USDA projected that 5.275 bb of U.S. corn would be used
directly for livestock feed in “new crop” MY 2015/16 at its Agricultural Outlook Forum on February 19‐20,
2015 in Arlington, Virginia.
In the USDA April 13th Feed Outlook Report (http://usda.mannlib.cornell.edu/usda/current/FDS/FDS‐04‐13‐2015.pdf) the
USDA Economic Research Service (ERS) indicates that over the MY 2012/13 through “current 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 (87.2% corn), and 134.4 mmt in
MY 2013/14 (95.2% corn), and is projected to be 142.4 mmt in “current crop” MY 2014/15 (93.6% corn). Over
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this same 3 year period, total U.S. Grain Consuming Animal Units (GCAUs) were estimated to be 92.3 million
in MY 2012/13, 90.9 million in “current” MY 2013/14, and 93.2 million in “current crop” MY 2014/15.
As a result, U.S. Energy Feeds per Grain Consuming Animal Unit is estimated to be 1.362 metric tons per
animal unit (mt/au) in MY 2012/13, and 1.479 mt/au in MY 2013/14, and is projected to be 1.528 mt/au in
“current 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 the previous record “large
crop” MY 2013/14, and now into the new even bigger record large “current crop” MY 2014/15 for corn and
other aggregated feedgrains, the amount of energy feeds fed per animal unit and total feed use of U.S. corn
has increased – helping to bring downward pressure on the prices of U.S. corn and other feedgrains.
Total Use of U.S. Corn for “current crop” MY 2014/15 is projected to be a record high 13.645 bb – down 50
mb from the March USDA WASDE report. This compares to the previous record high of 13.454 bb in MY
2013/14, and is up sharply from 11.083 bb in drought‐affected MY 2012/13 (Table 1 and Figures 6 and 8).
United States’ total corn use has varied widely in recent marketing years – due mainly to changes in available
U.S. corn supplies. Corn use in the U.S. over time have changed from 12.737 bb in MY 2007/08, to 12.056 bb
in MY 2008/09, 13.066 bb in MY 2009/10, 13.055 bb in MY 2010/11, 12.528 bb in MY 2011/12, 11.083 bb in
MY 2012/13, the previous record high of 13.454 bb in MY 2013/14, and now to the new projected record high
amount of 13.645 bb in “current crop” MY 2014/15. The USDA projected that a record high total of 13.750 bb
of U.S. corn would be used in “new crop” MY 2015/16 at its Agricultural Outlook Forum on February 19‐20,
2015 in Arlington, Virginia.
U.S. Corn Ending Stocks, % Ending Stocks‐to‐Use, & Prices
U.S. corn ending stocks for “current crop” MY 2014/15 are projected to be 1.827 bb – up 50 mb from
March, equal to the USDA February WASDE projection, while being down from earlier projections of 1.998 bb
in December 2014, and 2.081 bb in the October 2014 WASDE report (Table 1 & Figure 9). Since MY 2006/07
(1.304 bb), U.S. corn ending stocks have been 1.624 bb in MY 2007/08, 1.673 bb in MY 2008/09, 1.708 bb in
MY 2009/10, 1.128 bb in MY 2010/11, 989 mb in MY 2011/12, 821 mb in “drought stricken” MY 2012/13,
1.232 bb in MY 2013/14, and are now projected to be 1.827 bb in “current crop” MY 2014/15. Using a
combination of most recent USDA planted acreage, yield, and usage assumptions and KSU estimates of
harvested acreage (explained above), projected U.S. corn ending stocks in “new crop” MY 2015/16 equal
1.731 bb.
Projected percent (%) ending stocks‐to‐use of 13.39% in “current crop” MY 2014/15 are up from 12.98% in
the March WASDE, but equal to 13.39% in February, while being down from 13.81% in January, 14.62% in
December, 14.70% in November, and from 15.3% in the October 2014 WASDE report (Table 1 and Figures 9
and 10). On a year‐by‐year basis, U.S. corn % ending stocks‐to‐use trended downward from 12.8% in MY
2007/08 and 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
then down to 7.4% in “drought stricken” MY 2012/13, before increasing for the first time in six (6) years to
9.16% in MY 2013/14, and now again up to a projected level of 13.39% in “current crop” MY 2014/15.
U.S. average corn prices for “current crop” MY 2014/15 are projected to be in the range of $3.55‐$3.85
bu/ac (midpoint = $3.70) (Table 1 & Figures 8‐9). This price range is narrower by $0.05 /bu on each end of the
range from March with the same midpoint of $3.70 per bushel. After mid‐point estimates of $3.50 /bu in
November‐December 2014 for “current crop” MY 2014/15, the USDA raised it’s midpoint forecast estimates to
$3.65 in January‐February 2015, and now to $3.70 in the March‐April 2015 USDA WASDE reports. Using a
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combination of most recent USDA planted acreage, yield, and usage assumptions and KSU estimates of
harvested acreage (explained above), projected U.S. corn average prices in “new crop” MY 2015/16 equal
$3.85 /bu.
Since the beginning of the rapid expansion in U.S. ethanol production in 2006, U.S. corn prices have moved
first higher, then lower, and then 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. However, if the April 9th WASDE projection
holds true, prices will have declined for two consecutive years since the $6.89 record high in MY 2012/13,
down to $4.46 in MY 2013/14, and again down to $3.55‐$3.85 (midpoint = $3.70) in “current crop” MY
2014/15.
I‐D. USDA & KSU Corn Market Scenarios for “New Crop” MY 2015/16
Both the USDA and Kansas State University Extension have provided initial forecasts of U.S. corn supply‐
demand balances and prices for the “new crop” 2015/16 marketing year, with details provided below. The
USDA forecast provided here is an “adjusted version” of the U.S. corn supply‐demand and price forecast
provided at the USDA Agricultural Outlook Forum held at Arlington, Virginia on February 19‐20, 2015.
Specifically, adjustments were made in the “beginning stocks” MY 2015/16 estimates of these USDA
forecasts based on updated U.S. corn beginning stocks information available in the March 10, 2015 USDA
WASDE report. Also, U.S. corn planted acres from the March 31st USDA Prospective Plantings Report were
used rather than the 2015 Agricultural Outlook Forum forecast. The 2015 USDA Ag Outlook Forum forecasts
for corn, wheat, and soybeans are available online: http://www.usda.gov/oce/forum/2015_Speeches/Grains_Oilseeds.pdf
Two probability‐weighted Kansas State University (KSU) projections are provided – one based on a normal
crop “trend yield” of 162.3 bu/ac (given an 80% probability of occurring in 2015), and the other based on a
short crop “low yield” of 155.0 bu/ac (given a 20% probability of occurring in 2015).
A. USDA “New Crop” MY 2015/16 U.S. Corn Supply‐Demand & Price Projection
For “new crop” MY 2015/16, this USDA projection reflects the likelihood of a 1.398 ma reduction in U.S.
corn planted acreage in 2015, and how the USDA projects that a possible return to lower U.S. corn yields in
2015 of 166.8 bu/ac along with a moderation of 2015 U.S. corn production would likely affect U.S. corn supply‐
demand balances and prices in the coming “new crop” 2015/16 marketing year, i.e., September 1, 2015
through August 31, 2016 (Table 1).
A Kansas State University assumption that the percent harvested‐to‐planted acreage in 2015 will equal the
2007‐2014 average of 91.6% combined with the USDA’s preliminary 2015 U.S. corn yield projection of 166.8
bu/ac leads to an adjusted USDA forecast of 2015 U.S. corn production of 13.629 bb. Following this
projection of corn production for “new crop” MY 2015/16, U.S. total corn supplies are projected to be 15.481
bb (with the adjustment for 1.827 bb in U.S. corn beginning stocks), while U.S. total corn usage is still
estimated to be 13.750 bb (Table 1).
Consequently, U.S. corn ending stocks are projected to be 1.731 bb in this adjusted USDA projection for
“new crop” MY 2015/16, with % ending stocks‐to‐use of 12.60%. The adjusted forecast of U.S. corn average
prices (according to KSU estimates) would be $3.85 /bu for “new crop” MY 2015/16, up marginally from
“current crop” MY 2014/15 (Table 1 and Figures 8‐9).
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Adjusted USDA Scenario for “New Crop” MY 2015/16 U.S. Corn S/D & Prices
1.398 million acres planted & 166.8 bu/ac yields
‐ 2015 U.S. Planted Acres …
November 20, 2014
Grain Market Outlook
“Higher Exports” Scenario: Exports = 1.050 bb, 22.9% Stx/Use, $7.00/bu – 10% Probability
In this “Higher Exports” outcome scenario, it is estimated that at this time there is approximately a 10%
chance of U.S. wheat acreage, yields, production, and non‐export usage being essentially equal to USDA
projections in the November 10, 2014 USDA WASDE report with the exception of 125 mb higher exports,
which leads to higher total use, lower ending stocks and lower % ending stocks‐to‐use, and to higher projected
prices (Table 1 and Figure 7).
Under this scenario, 2014 U.S. wheat total supplies and U.S. food, seed, livestock feeding, and residual use
are all unchanged from the November USDA WASDE projection for “new crop” MY 2014/15. However, an
increase of 125 mb from the 925 mb USDA projection up to 1.050 bb, leads to an increase in U.S. wheat total
usage of 2.266 bb (up 125 mb), and ending stocks of 519 mb (down 125 mb from the USDA). Consequently, %
ending stocks‐to‐use are projected to be 22.9% (down from 30.08% projected by the USDA). Given these
forecast assumptions, U.S. wheat average prices are projected by KSU to be in the range of $6.70‐$7.30 per
bushel for “new crop” MY 2014/15 (midpoint = $7.00).
This KSU price mid‐point projection for the “Higher Export” scenario of $7.00 /bu within a range of $6.70‐
$7.30 /bu compares to the USDA’s “new crop” MY 2014/15 projection of $5.65‐$6.15 (mid‐point = $5.90 /bu),
with the midpoint of the KSU “Higher Export” forecast of $7.00 being above the upper end of the USDA
forecast price range (i.e., above $6.15 /bu). Converse to the earlier “Lower Export” scenario, U.S. wheat prices
would have to rise sharply through the end of the current “new crop” 2014/15 marketing year to overcome
the “early season sales price weighting” effect that has already taken place.
II. World Wheat Supply‐Demand Trends
The USDA forecast that World wheat production in “new crop” MY 2014/15 will be up 0.8% from the “old
crop” 2013/14 marketing year that ended on May 31, 2014, and up 9.4% from two years ago in MY 2012/13.
World wheat total supplies in “new crop” MY 2014/15 are forecast to be 905.6 mmt, up 1.8% from 889.5 mmt
a year ago, and up 6.0% from 854.1 mmt two years ago. Given these changes, World wheat total use in “new
crop” MY 2014/15 is projected to increase 1.3% from “old crop” MY 2013/14, and to be up 4.9% from MY
2012/13. World wheat ending stocks in “new crop” MY 2014/15 are projected to increase by 3.9% from a year
earlier in “old crop” MY 2013/14, and by 10.4% from two years ago in MY 2012/13.
Uncertainty still exists for the World wheat market supply‐demand balance situation that will ultimately
occur in “new crop” MY 2014/15 (i.e., over the June 1, 2014 through May 31, 2015 period). However, absent
any major 2014 wheat production shortfalls or other unanticipated geopolitical conflicts or disruptive
economic problems among major worl …
September 25, 2014
Grain Market Outlook
“Higher Exports” Scenario: Exports = 1.050 bb, 24.45% Stx/Use, $6.75/bu – 20% Probability
In this “Higher Exports” outcome scenario, it is estimated that at this time there is a 20% chance of U.S.
wheat acreage, yields, production, and non‐export usage being essentially equal to USDA projections in the
September 11, 2014 USDA WASDE report with the exception of higher exports and lower projected prices
(Table 1 and Figure 5).
With 2014 U.S. wheat planted acres of 56.474 million acres (ma), harvested acres of 46.240 ma, 2014 U.S.
wheat yields of 43.9 bu/ac, 2014 U.S. wheat production of 2.030 bb, “new crop” MY 2014/15 total supplies
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equaling 2.789 bb, exports of 1.050 bb (up 150 mb from 900 mb forecast by the USDA), U.S. wheat total usage
of 2.241 bb (up 150 mb), ending stocks of 548 mb (down 150 mb from the USDA), % ending stocks‐to‐use are
projected to be 24.45% (down from 33.38% projected by the USDA). Given these forecast assumptions, U.S.
wheat average prices are projected to be in the range of $6.25‐$7.25 per bushel for “new crop” MY 2014/15
(midpoint = $6.75).
This KSU price “Higher Export” scenario projection compares to the USDA’s “new crop” MY 2014/15
projection of $5.50‐$6.30 (mid‐point = $5.90 /bu), with the midpoint of the KSU “Higher Export” forecast of
$6.75 being above the upper end of the USDA forecast price range (i.e., above $6.30 /bu).
II. World Wheat Supply‐Demand Trends
The USDA forecast that World wheat production in “new crop” MY 2014/15 will be up 0.8% from the “old
crop” 2013/14 marketing year that ended on May 31st, and up 9.4% from two years ago in MY 2012/13. World
wheat total supplies in “new crop” MY 2014/15 are forecast to be 906.4 mmt, up 1.4% from 889.7 mmt a year
ago, but up 6.0% from 855.0 mmt two years ago. Given these changes, World wheat total use in “new crop”
MY 2014/15 is projected to increase marginally (up 1.0%) from “old crop” MY 2013/14, but to be up 4.5% from
MY 2012/13. World wheat ending stocks in “new crop” MY 2014/15 are projected to increase by 5.3% from a
year earlier in “old crop” MY 2013/14, and by 11.8% from two years ago in MY 2012/13.
A large amount of uncertainty still exists for the World wheat market supply‐demand balance situation
that will ultimately develop in “new crop” MY 2014/15 (i.e., over the June 1, 2014 through May 31, 2015
period). However, absent any major 2014 wheat production shortfalls or other unanticipated geopolitical
conflicts or disruptive economic problems among major worl …
May 15, 2014
Grain Market Outlook
MAY 2014 CME eCorn Futures
Dec. 16, 2013 – May 14, 2014
Close = $4.95 ½ on 3/14/2014
DEC 2014 CME eCorn Futures
Dec. 16, 2013 – May 14, 2014
Close = $4.89 on 3/14/2014
Page | 3
I‐C. U.S. Corn Supply‐Demand
U.S. Corn Acreage, Yield & Production
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). 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 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 1.145 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 is 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 (up 50 mb from a month ago),
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 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 5.004 bb in “current” MY 2013/14, with the months of May through August yet to
occur. This estimate of 5.004 bb is less than the USDA’s May 2014 WASDE report estimate of 5.050 bb of corn
to be used for ethanol production during “current” MY 2013/14.
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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 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 1.142 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 (up 150 mb from a month ago) 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 May 8th, with 40 of 52 weeks (76.9%) of
“current” MY 2013/14 complete, 1.192 bb of U.S. corn had been shipped for export – equal to 62.7% of the
USDA’s updated projection for “current” MY 2013/14 of 1.900 bb. An additional 581 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 1.192 bb in past shipments plus 586 mb in forward sales amounts to 1.752 bb, or 92.2% of
the USDA’s 1.900 bb U.S. corn export target for “current” MY 2013/14 in the May 9th 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 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 (down 15 mb from last month), 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, which
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 is somewhat correlated with the amounts of energy feeds per grain consuming
animal units over the same time period.
In its May Feed Outlook Report (http://www.ers.usda.gov/publications/fds‐feed‐outlook/fds‐14e.aspx)
the USDA Economic Research Service (ERS) in …
May 14, 2014
Grain Market Outlook
“High Production” Scenario: Production = 2.095 bb, 24.6% Stx/Use, $7.30/bu – 15% Probability
In this “high production” outcome scenario, it is estimated that there is a 15% chance that 2014 U.S. wheat
yields and production are markedly larger than the May 9th USDA projections, with larger ending stocks‐to‐use
and “moderating” yet still historically high prices in “new crop” MY 2014/15 (Table 1).
With 2014 U.S. wheat planted acres of 55.8 million acres (ma), harvested acres of 45.9 ma, 2014 U.S.
wheat yields of 45.6 bu/ac (up from 42.7 bu/ac for the USDA), 2014 U.S. wheat production of 2.095 bb (vs
1.963 for the USDA), “next crop” MY 2014/15 total supplies equaling 2.818 bb, exports of 1.050 bb (vs 950 mb
for the USDA), U.S. wheat total usage of 2.261 bb, ending stocks of 557 mb, and % ending stocks‐to‐use near
24.6%, U.S. wheat average prices are projected to be in the range of $6.80‐$7.80 per bushel for “next crop” MY
2014/15 (midpoint = $7.30 /bu). The KSU $7.30 midpoint forecast equals that of the USDA for MY 2014/15.
II. World Wheat Supply‐Demand Trends
The USDA forecast that World wheat production in “new crop” MY 2014/15 will be down 2.4% from the
“current” 2013/14 marketing year ending on May 31st, but still up 6.0% from two years ago in MY 2012/13.
World wheat total supplies in “new crop” MY 2014/15 are forecast to be marginally lower from a year ago
(down 0.7%), but up 3.4% from two years ago. Given these changes, World wheat total use in “new crop” MY
2014/15 is projected to decrease by 1.0% from “current” MY 2013/14, but to be up 2.5% from MY 2012/13.
World ending stocks and ending stocks‐to‐use in “new crop” MY 2014/15 are both projected to increase
marginally from a year earlier (“current year” MY 2013/14), and more substantially from the earlier marketing
year (MY 2012/13).
A large amount of uncertainty still exists for the World wheat market supply‐demand balance situation
that will develop in “new crop” MY 2014/15. However, absent any major 2014 wheat production shortfalls or
other unanticipated geopolitical conflicts or economic problems among major worl …
June 1, 2016
Grain Market Outlook
production problems emerge for the 2016 U.S. corn
crop during June‐July in the form of hot and dry weather – leading to reduced 2016 corn production prospects.
Market factors such as a) potential future economic and financial system disruptions impacting grain, energy,
and other commodity markets, b) U.S. farmer resistance to selling at low late‐May and June 2016 cash corn
prices, and c) concerns about possible “El Nino” or “El Nino‐La Nina transition”‐ related weather patterns in
spring‐summer 2016 with an eye toward their possible negative impacts on 2016 crop production, could each
still impact corn market prices through summer‐fall 2016. However, farmer resistance to “old crop” cash sales
will be forced to give way in coming months as the 2016 U.S. corn crop develops and approaches harvest in
coming months. Also, low feedgrain prices have resulted in lower input costs for U.S. and Foreign livestock
feeding and bioenergy users – leading to strong domestic and foreign feedgrain usage and providing
underlying support for U.S. corn exports. In the “current” 2015/16 marketing year the high value of the U.S.
dollar and prospects for a large 2016 South American corn crop have been significant limiting factors for U.S.
corn exports – although the U.S. dollar has been trending lower since early February 2016 – coinciding with
moderately improved U.S. corn exports.
USDA Estimate for “Current” MY 2015/16: The USDA made several changes to the U.S. corn supply‐demand
balance sheet for “current crop” MY 2015/16 – with 2015 U.S. corn production of 13.601 bb, and total supplies
of 15.387 bb for MY 2015/16 (up 5 million bushels or ‘mb’ due to increased imports). Total use is projected to
be 13.585 bb (up 64 mb). Ethanol use was projected to be 5.250 bb, with non‐ethanol Food, Seed, and
Industrial (FSI) use of 1.360 bb (down 11 mb), exports of 1.725 bb (up 75 mb), and feed and residual use of
5.250 bb. Ending stocks are forecast to be down 59 mb to 1.803 bb (13.27% S/U) in “current” MY 2015/16 –
up from 1.731 bb (12.6% S/U) in “old crop” MY 2014/15, and 1.232 bb (9.2% S/U) in MY 2013/14. U.S. corn
average cash prices are forecast to be in the range of $3.50‐$3.70 /bu. ($3.60 midpoint) versus $3.70 in “old
crop” MY 2014/15, $4.46 in MY 2013/14, and $6.89 (record high) in MY 2012/13.
USDA Forecast for “New Crop” MY 2016/17: The USDA provided it’s first WASDE report forecast “new crop”
MY 2016/17 forecast for U.S. corn – relying on the USDA March 31st Prospective Planting report planted
acreage forecast and a number of other harvested acreage and yield assumptions. Projected 2016 U.S. corn
plantings equal 93.601 ma – up 5.602 ma from 2015. Forecast 2016 harvested acres of approximately 85.893
ma would be up 5.144 ma vs 2015. With projected yields of 168.0 bu/ac, 2016 U.S. corn production is
projected to be a record 14.430 bb – up from 13.601 bb in 2015, 14.216 bb in 2014, and 13.829 bb in 2013.
With forecast “new crop” MY 2016/17 total use of 14.120 bb (record high), and projected ending stocks of
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2.153 bb (15.24% S/U) – up from 1.803 bb (13.27% S/U) in “current crop” MY 2015/16 – U.S. corn prices are
projected by the USDA to be in the range of $3.05‐$3.65 (midpoint = $3.35 /bu) – with the midpoint of $3.35
being down from the $3.60 /bu midpoint estimate for “current” MY 2015/16. This scenario is given a 40%
likelihood of occurring by Kansas State University.
KSU Forecasts for “New Crop” MY 2016/17: Three alternative KSU‐Scenarios for U.S. corn supply‐demand and
prices are presented for “new crop” MY 2016/17, with each assuming a 1.0 ma downward adjustment in 2016
U.S. corn planted acres from the USDA’s March 31st Prospective Plantings report. A) KSU “trend yield”
scenario (30% probability) assumes the following for “new crop” MY 2016/17: 92.601 ma planted, 84.545 ma
harvested, 164.5 bu/ac trend yield, 13.908 bb production, 15.751 bb total supplies, 13.637 bb total use, 2.114
bb ending stocks, 15.50% S/U, & $3.30 /bu U.S. corn average price; B) KSU “moderate drought” scenario (20%
prob.) assumes 92.601 ma planted, 84.545 ma harvested, 158.0 bu/ac yield, 13.358 bb production, 15.206 bb
total supplies, 13.497 bb total use, 1.709 bb ending stocks, 12.66% S/U, & $3.75 /bu U.S. corn price; and C)
KSU “serious drought” scenario (10% prob.) assumes 92.601 ma planted, 84.545 ma harvested, 150.0 bu/ac
yield, 12.682 bb production, 14.535 bb total supplies, 13.257 bb total use, 1.278 bb ending stocks, 9.6% S/U, &
$4.40 /bu U.S. corn price.
World Corn Supply‐Demand: World total supplies of 1,011.1 million metric tons (mmt) are projected for “new
crop” MY 2016/17, up from 1,176.7 mmt in “current crop” MY 2015/16, and up from 1,188.7 mmt in MY
2014/15. Projected World corn ending stocks of 207.0 mmt (20.5% S/U) in “new crop” MY 2016/17 are up
from 207.87 mmt (21.5% S/U) in “current crop” MY 2015/16, and from 207.88 mmt (21.2% S/U) in MY
2014/15.
…