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December 3, 2015
Grain Market Outlook
tial wheat production problems and supply
prospects in the Black Sea region, 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 currently existing in World & U.S. wheat markets continues to be the predominant
negative influence on World wheat prices. If prices are to recover in December 2015 through 2016 it is likely
that significant World wheat production problems and/or trade disruptions would need to occur. For the
United States, ongoing strength in the U.S. dollar exchange rate is also a serious negative factor that is limiting
U.S. wheat exports and price prospects.
USDA U.S. Wheat Supply‐Demand & Price Forecast: The USDA adjusted its supply‐demand estimates for U.S.
wheat in the “new crop” 2015/16 marketing year – forecasting 54.644 million acres (ma) planted, 47.094 ma
harvested, 43.6 bu/ac yields, and 2.052 billion bushels (bb) production / 2.930 bb total supplies. The USDA also
forecast 180 million bushels (mb) feed & residual use, 800 mb of exports (down 50 mb), 2.019 mb of total use
(down 50 mb), 911 mb ending stocks (up 50 mb), and 45.1% ending‐stocks‐to‐use (up from 41.6% in October –
up to the highest level since 48.6% in MY 2009/08). The USDA tightened the low‐high range of its U.S. average
wheat price projection for “new crop” MY 2015/16 to $4.80‐$5.20 /bu. – leaving unchanged the midpoint
forecast of $5.00 – down to the lowest level 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 given in two scenarios: A) “Lower Exports” Scenario: 80%
prob. of the same U.S. wheat supply estimates as the USDA, but with U.S. exports dropping below “old crop”
2014/15 levels, i.e., 750 mb exports, 961 mb ending stocks, 48.8% S/U, and $4.85 /bu U.S. average price; and
B) “Higher Exports” Scenario: 20% prob. of supply prospects equal to the USDA’s but with higher U.S. wheat
exports, i.e., 900 mb exports, 811 mb ending stocks, 38.27% S/U, and $5.85 /bu U.S. average price.
USDA World Wheat: The existence of record large World wheat supplies and ending stocks estimates are a
“limiting burden” on World wheat markets – helping to drive wheat prices lower. Record World total wheat
supplies of 944.7 mmt in “new crop” MY 2015/16 are up from the previous record of 918.7 mmt in “old crop”
MY 2014/15, and from 892.3 mmt in MY 2013/14. These are the three highest years of World wheat
production on record. Projected record World wheat ending stocks in “new crop” MY 2015/16 of 227.3 mmt
(31.7% S/U – 14 year high) are up from 211.7 mmt (29.9% S/U) in “old crop” MY 2014/15, and up from 193.6
mmt (27.7% S/U) in MY 2013/14. For perspective, these supply‐demand figures are comparable to the 38 year
low World wheat ending stocks of 128.8 mmt and percent ending stocks‐to‐use of 21.0% S/U in MY 2007/08.
Page | 2
I. U.S. Wheat Market Situation & Outlook
I‐A. November USDA Reports & “New Crop” MY 2015/16 Projections
On November 10th the USDA World Agricultural Outlook Board (WAOB) released its November 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, and 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.
I‐B. CME Kansas Hard Red Winter Wheat MARCH & JULY 2016 Futures
Since market highs of $6.40 ¼ per bushel for the CME MARCH 2016 Kansas hard red winter wheat futures
contract that occurred on June 30, 2015, MARCH 2016 futures have trended sharply (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) has been the key factor causing the recent sharp decline in
CME MARCH 2016 Kansas HRW wheat futures prices.
Figure 1. MARCH & JULY 2016 CME Kansas Wheat Futures Price Charts …
June 15, 2015
Grain Market Outlook
CME eCorn Futures
Oct. 15, 2014 – June 12, 2015
Close = $3.69 ½ on 6/12/2015
JULY 2015 CME eCorn Futures
Oct. 15, 2014 – June 12, 2015
Close = $3.53 on 6/12/2015
Page | 4
I‐C. U.S. Corn Supply‐Demand – Focus on “New Crop” 2015/16 Projections
U.S. Corn Acreage, Yield & Production
In the March 31, 2015 USDA Prospective Plantings report the USDA projected that 2015 U.S. corn total
planted acreage would be 89.199 million acres (ma), down 2.398 ma (‐1.5%) from 90.597 ma in 2014, down
6.166 ma (‐6.5%) from 95.365 ma in 2013, down 8.092 ma (‐8.3%) from 97.291 ma in 2012, and down from
91.921 ma in 2011 (Table 1 and Figure 3). The USDA has maintained the same assumption about U.S. corn
planted acreage in the May and June WASDE reports. However, the USDA National Agricultural Statistics
Service (NASS) will release the annual Acreage report on June 30th in which changes in the USDA’s projection
of 2015 U.S. corn acreage may occur.
Given the USDA’s implicit assumption of an average harvested‐to‐planted acreage of 91.6%, 2015 U.S. corn
harvested acreage would be approximately 81.715 ma, down 1.421 ma (‐1.7%) from 83.136 ma in 2014, down
5.736 ma (‐6.6%) from 87.451 ma in 2013, down 5.650 ma (‐6.5%) from 87.365 ma in 2012, and down from
83.981 ma in 2011.
The 2014 U.S. average corn yield of 171.0 bushels per acre (bu/ac) is a record high and unchanged from
the January‐May USDA reports, and is higher than the 166.8 bu/ac estimate for 2015 in the June WASDE report
(Table 1 and Figure 4). Although this early 2015 USDA projection of 166.8 bu/ac is down from 171.0 bu/ac in
2014, it would be the second highest U.S. corn yield on record, being up from 158.1 bu/ac in 2013, the drought
affected 2012 low yield of 123.1 bu/ac., 147.2 bu/ac in 2011, 152.8 bu/ac in 2010, and up from the previous
historic record high of 164.7 bu/ac in 2009.
Based on this combination of projections for 2015 planted acreage (89.199 ma – from the USDA),
harvested acreage (81.715 ma – a KSU assumption calculated by dividing the USDA’s 2015 production forecast
by the 2015 yield projection), and yield (166.8 ma – USDA), 2015 U.S. corn production would be 13.630 billion
bushels (bb) – down from the record high of 14.216 bb 2014, and the previous record high of 13.829 bb in
2013 – but up from 10.755 bb in 2012, 12.314 bb in 2011, 12.425 bb in 2010, and 13.067 bb in 2009 (Table 1).
U.S. Corn Total Supplies
The USDA projects that total supplies of U.S. corn for “new crop” MY 2015/16 are a record high 15.531 bb
– up 25 million bushels (mb) from the May WASDE report. This projection of 15.531 bb for “new crop” MY
2015/16 results from beginning stocks of 1.876 bb, projected 2015 production of 13.630 bb, and projected
imports of 25 million bushel (mb) (Table 1 and Figure 5). Total supplies of near 15.531 bb in “new crop” MY
2015/16 would be a record high, being comparable to 14.362 bb in MY 2007/08, 13.729 bb in MY 2008/09,
14.749 bb in MY 2009/10, 14.161 bb in MY 2010/11, 13.471 bb in MY 2011/12, 11.904 bb in “short crop” MY
2012/13, 14.686 bb in MY 2013/14, and the previous record high of 15.472 bb in “current” MY 2014/15.
The USDA forecast of beginning stocks of 1.876 bb in “new crop” MY 2015/16 is up 25 mb from the May
WASDE report, and is also substantially from 1.232 bb in beginning stocks in “current crop” MY 2014/15, 821
mb in MY 2013/14, 989 mb in MY 2012/13, and 1.128 bb in MY 2011/12, and at least moderately larger than
1.708 bb in MY 2010/11, 1.673 bb in MY 2009/10, and 1.624 bb in MY 2008/09. This amount of beginning
stocks in “new crop” MY 2015/16 of 1.851 bb is up considerably from the low of 426 mb that occurred in MY
1996/97, and is the highest since 1.967 bb in MY 2006/07 and 2.114 bb in MY 2005/07 (Table 1 and Figure 5).
Page | 5
Projected imports of 25 mb in “current crop” MY 2015/16 are equal to “current” MY 2014/15, but down
from 36 mb in MY 2013/14 (the 2nd highest on record), and are also down sharply from the record high of 160
mb in the drought‐stressed 2012/13 marketing year. These amounts of U.S. corn imports are comparable to
29 mb in MY 2011/12, and 28 mb in MY 2010/11.
U.S. Corn Use by Category & Total Use
U.S. Ethanol Production and Corn Usage: Projected U.S. corn use for ethanol production of 5.200 bb in
“new crop” MY 2015/16 is up from 5.175 bb in “current” MY 2014/15 (down 25 mb from May), and up from
5.134 bb in MY 2013/14, 4.641 bb in MY 2012/13, and 5.000 bb in MY 2011/12 (Table 1 and Figures 6‐7).
Figure 7 shows weekly U.S. oxygenated plant production of fuel ethanol as reported by the U.S. Energy
Information Administration (www.eia.gov) with a calculated estimate of corn use developed by Kansas State
University. Assuming 2.83 gallons of ethanol produced per bushel of corn (equaling the calculated conversion
of U.S. corn into ethanol in January 2015), these calculations indicate that the equivalent projected annual rate
of U.S. corn used for ethanol production for “current crop” MY 2014/15 has ranged from 4.830‐5.438 bb on a
weekly basis since early September 2014 ‐ the beginning of the “current crop” 2014/15 marketing year. Over
the period of September 1, 2014 through June 5, 2015, corn usage for ethanol production was been on pace to
reach 5.175 bb in “current crop” MY 2014/15. This estimate of 5.175 bb is equal to the USDA’s June 10, 2015
WASDE report estimate of 5.175 bb of corn to be used for ethanol production during “current crop” MY
2014/15, with 40 of 52 weeks (76.9%) 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. According to these KSU
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 in MY 2013/14, 1.001 bb in both “current crop” MY 2014/15, and 1.006 bb in “new crop” MY 2015/16.
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 in MY 2013/14, a near record 477 mb in “current crop” MY 2014/15, and a
record high 479 mb in “new crop” MY 2015/16.
U.S. Corn Exports: Projected U.S. corn exports of 1.900 bb in “new crop” MY 2015/16 is up from 1.825 bb
(unchanged from May, but up 25 mb from April) in “current” MY 2014/15, less than 1.917 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 June 4th, through the 40th week of “current crop” MY 2014/15 (40 of 52 weeks), 1,299.9 mb
of U.S. corn had been physically shipped for export – equal to 71.2% of the USDA’s projection of 1.825 bb for
“current crop” MY 2014/15. An additional 430.1 mb of U.S. corn had been pre‐sold for future export
Page | 6
shipments during the “current crop” 2014/15 marketing year – prior to August 31, 2015 (the end of “current
crop” MY 2014/15).
Adding together 1,299.9 mb in past shipments plus 430.1 mb in forward sales amounts to 1,730.0 mb, or
94.8% of the USDA’s 1.825 bb U.S. corn export target for “current crop” MY 2014/15 in the June 10th USDA
WASDE report with 76.9% (40/52 weeks) of the marketing year completed. United States’ corn export
shipments will need to average 43.8 mb per week for the remainder of the “current crop” 2014/15 marketing
year to achieve the USDA’s 1.825 bb projection. This compares to 37.7 mb and 32.5 mb of export shipments
for the weeks ending May 28th and June 4th, respectively – i.e., each being behind of the pace needed to meet
the USDA’s most recent export projection.
Non‐Ethanol FSI: Forecast non‐ethanol food, seed and industrial (FSI) use of 1.360 bb in “new crop” MY
2015/16 is greater than 1.347 bb in “current” MY 2014/15 (unchanged from May, but reduced 48 mb from the
April WASDE), 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 5.300 bb in “new crop” MY 2015/16 is up
from 5.250 bb for “current” MY 2014/15, 5.034 bb in MY 2013/14, 4.315 bb in MY 2012/13, and 4.520 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 June 12th Feed Outlook Report (http://www.ers.usda.gov/media/1853441/fds_15f.pdf) the USDA Economic
Research Service (ERS) indicates that over the MY 2013/14 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
be 134.3 million metric tons (mmt) in MY 2013/14 (95.2% corn), and 141.8 mmt in “current” MY 2014/15
(92.3% corn), and 142.2 mmt in “new crop” MY 2015/16 (94.7% corn). Over this same 3 year period, total U.S.
Grain Consuming Animal Units (GCAUs) are estimated to be 91.0 million in MY 2013/14, 92.9 million in
“current” MY 2014/15, and 94.8 million in “new crop” MY 2015/16.
As a result, U.S. Energy Feeds per Grain Consuming Animal Unit is estimated to be 1.476 metric tons per
animal unit (mt/au) in MY 2013/14, and 1.555 mt/au in “current” MY 2014/15, and is projected to be 1.500
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 record “large crop”
years of MY 2013/14 and “current” 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 fed per
animal unit and total feed use of U.S. corn has increased – 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 13.760 bb – up from the
current record highs of 13.597 bb in “current” MY 2014/15 (down 25 mb from May) (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 13.597 bb in “current crop” MY 2014/15, and now the new projected record high of 13.760 bb in
“new crop” MY 2015/16.
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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 1.771 bb, which is down 105 mb
from 1.886 bb in “current” MY 2014/15 (Table 1 & Figure 9). Projected ending stocks for both “new crop” MY
2015/16 and “current” MY 2014/15 were up 25 mb from the May WASDE report. 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, 1.876 bb in “current crop” MY 2014/15, and now 1.771 bb in “new crop” MY 2015/16.
Projected percent (%) ending stocks‐to‐use of 12.87% in “new crop” MY 2015/16 is up marginally from a
month ago, but down from 13.80% in “current” 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, before increasing for the first time in six (6) years to 9.16% in MY 2013/14,
and then to 13.80% in “current” MY 2014/15 – with a projected decline to 12.87% 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 $3.20‐$3.80 bu/ac
(midpoint = $3.50) (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 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 May 12th WASDE projection holds true, prices will now have declined for three consecutive
years since the $6.89 record high in MY 2012/13, down to $4.46 in MY 2013/14, $3.55‐$3.75 (midpoint =
$3.65) in “current crop” MY 2014/15, and now down to $3.20‐$3.80 (midpoint = $3.50) in “new crop” MY
2015/16.
I‐D. KSU Corn Market Scenarios for “New Crop” MY 2015/16
Kansas State University 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.
The first scenario is based on USDA reported U.S. corn acreage with a normal crop “trend yield” of 162.25
bu/ac – given a 40% probability of occurring in 2015. The second scenario is based on lower U.S. corn planted
acreage in 2015 than projected by the USDA, again coupled with a normal crop “trend yield” of 162.25 bu/ac –
given a 45% probability of occurring in 2015. The third scenario is based on USDA planted acreage projections
and a short crop “low yield” of 155.0 bu/ac (given a 15% probability of occurring in 2015).
KSU Scenario #1 – A “Normal Crop” of 13.262 bb with 40% Likelihood of Occurring
For “new crop” MY 2015/16, this “normal crop” trend line yield KSU projection reflects the likelihood of a
reduction in U.S. corn planted acreage in 2015, and how a possible return to long term trend line U.S. corn
yields in 2015 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. This scenario is thought to have approximately a 40% probability of occurring (i.e.,
4 out of 10) at this point in time.
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Specifically, this KSU U.S. corn supply‐demand scenario assumes that 2015 U.S. corn planted acreage will
be down 1.398 million acres (ma) to 89.199 ma (equal to the USDA’s May‐June WASDE projections), with 2015
U.S. corn harvested acreage also down 1.421 ma to 81.715 ma (also equal to the USDA May‐June WASDE
projections) (Table 1 and Figure 3). With a return to long term (1973‐2014) trend line U.S. corn yields of 162.3
bu/ac, 2015 U.S. corn production is forecast to be 13.262 bb.
Following these projections of corn production for “new crop” MY 2015/16, U.S. total corn usage is then
estimated to be a record high 13.730 – down moderately from the USDA’s May‐June 2015 projection of 13.760
bb for “new crop” MY 2015/16 (Table 1 and Figure 6).
KSU estimates are for U.S. corn ending stocks to be 1.433 bb, and for % ending stocks‐to‐use of 10.44% for
“new crop” MY 2015/16. Marketing year average U.S. corn prices would be projected to average near $4.25
/bu for “new crop” MY 2015/16 (Table 1 and Figures 9 and 10).
Following is the KSU “normal crop / trend yield” U.S. corn supply‐demand and price scenario for “new
crop” MY 2015/16 – given a 40% probability of occurring.
1st KSU Scenario for “New Crop” MY 2015/16 U.S. Corn Supply/Demand & Prices
Estimated Probability of Occurring = 40% …
February 23, 2015
Grain Market Outlook
p 6.1% from MY 2012/13.
This short term decline in combined Brazil, Argentina and Paraguay exports as a proportion of World soybean
trade has been offset by increases in United States’ exports.
Uptrends in United States’ Soybean Production & Exports
The growth in United States’ soybean production and exports compares to that in South America over this
same three period, with 82.8 mmt of U.S. soybean production in MY 2012/13 (30.8% of World total), 91.4 mmt
in MY 2013/14 (32.2% of World total), and 108.0 mmt in “current crop” MY 2014/15 (34.3% of the World
total). United States’ soybean production in “current crop” MY 2014/15 is projected to be up 18.2% over last
year, and up 30.5% over two years ago.
United States’ soybean exports have grown from 35.9 mmt in MY 2012/13 (35.7% of World total), to 44.8
mmt in MY 2013/14 (39.8% of World total), and a projected amount of 48.7 mmt in “current crop” MY
2014/15 (41.6% of the World total). United States’ soybean exports in “current crop” MY 2014/15 are
projected to be up 8.7% over last year, and up 35.9% over two years ago.
The Necessity to the Soybean Market of Continued Strength in Chinese Import Demand
It is widely acknowledged by soybean market analysts that continued growth and/or at least “level
sustainability” of Chinese soybean imports at current and projected levels is necessary for continuance of the
historically high World soybean prices that have occurred since the 2012/13 marketing year. Market analysts
have speculated that Chinese soybean import demand growth may eventually slow due to swine industry
production issues or other broad, systematic economic and/or financial factors within the country. However,
the USDA has continued to project that strong growth would occur in Chinese soybean imports in “current
crop” MY 2014/15 and “next crop” MY 2015/16, and beyond. If this recent upward trend in Chinese soybean
imports and import demand were to falter, it would undoubtably have a substantial negative impact on U.S.
and World soybean market prices.
As a result of a record large fall harvest of soybeans in the United States in 2014, cash soybean prices had
fallen below $9.00 per bushel in late November, but have since moved higher. Central Kansas Terminal cash
bids were in the range of $9.44 ¼ ($0.55 under basis) to $9.54 ¼ ($0.45 under basis) on Friday, February 20th.
Soybean forward contract prices for fall harvest in October 2015 in the key central Kansas market of
Hutchinson, Kansas were $8.99 / bu. ($0.81 under basis). “Current crop” MARCH 2015 soybean futures closed
at $9.99 ¼ per bushel that day, with “next year’s crop” NOVEMBER 2015 soybean futures closing at $9.80 per
bushel.
Page | 4
Given that the USDA projections for “current crop” MY 2014/15 and “next crop” MY 2015/16 indicate that
a) Chinese soybean imports will continue to be strong, and b) South American soybean production to be
harvested in early‐mid 2015 will again be record high, there is no indication yet that any change is expected in
these projected trends in production, exports or imports in the broader World soybean market. The
possibility of weather‐related soybean production problems in South America during the spring of 2015, or in
the United States during the summer‐fall of 2015 could impact these trends. However, until such potential
production problems actually do occur the World soybean market will likely assume that these “predominant
trends” will continue into the foreseeable future.
I‐C. Soybean Futures Trends Since the February 10th USDA Reports
“Current crop” MARCH 2015 soybean futures contract prices responded in a negative manner to the
information in the February 10th USDA reports (Figure 1). On the day of the reports CME MARCH 2015 futures
prices opened at $9.78 ¼ /bu, and traded as high as $9.86 and as low as $9.67 during the session, before
settling at $9.69 – down $0.09 ½ for the day. Since then MARCH 2015 soybean futures prices have traded
within the range from a low of $9.66 on February 11th, to a high of $10.17 on February 19th before closing at
$9.98 ¾ on Friday, February 20th.
Figure 1. MAR 2015 and NOV 2015 CME Soybean Futures Price Charts (electronic trade) …
February 18, 2015
Grain Market Outlook
I‐C. U.S. Corn Supply‐Demand – USDA “Current Crop” 2014/15 Projections
U.S. Corn Acreage, Yield & Production
The USDA made no change from the January WASDE report in its projection that 2014 U.S. corn total
planted acreage was 90.597 million acres (ma), which had been adjusted down from 90.885 ma in the
December WASDE report (Table 1 and Figure 2). Planted acreage of 90.597 million acres in 2014 is down from
95.365 ma in 2013, 97.291 ma in 2012, and 91.921 ma in 2011.
In addition, the USDA made no change in its January projection of 2014 U.S. corn harvested acreage of
83.136 ma, which had been adjusted upwards from 83.097 ma in December. Harvested acreage of 83.136 ma
in 2014 is down from 87.451 ma in 2013, 87.365 ma in 2012, and 83.981 ma in 2011.
The 2014 proportion of harvested‐to‐planted acreage for all U.S. corn is projected to be 91.8% ‐ which had
been adjusted up from 91.4% in December. This proportion of harvested acreage in 2014 of 91.8% is up
marginally from 91.7% in to 2013, and up from 89.9% in 2012, and 91.4% in 2011.
The projected 2014 U.S. average corn yield of 171.0 bushels per acre (bu/ac) is a record high and
unchanged from the January USDA reports, but is down from earlier USDA projections of 173.4 bu/ac in
December and 174.2 bu/ac in October 2014 (Table 1 and Figure 3). This projection of 171.0 bu/ac in January‐
February is up from 158.8 bu/ac in 2013, the drought affected 2012 low yield of 123.1 bu/ac., and up from the
previous record high of 164.7 bu/ac in 2009.
DEC 2015 CME eCorn Futures
June 20, 2014 – Feb. 17, 2015
Close = $4.20 ½ on 2/17/2015
MAR 2015 CME eCorn Futures
June 20, 2014 – Feb. 17, 2015
Close = $3.89 ½ on 2/17/2015
Page | 4
Based on these 2014 acreage and yield projections, the USDA maintained is January projection that 2014
U.S. corn production to be a record high 14.216 billion bushels (bb) – down from 14.407 bb in the December
USDA reports. The projection of a record high 14.216 bb is up from the previous record high of 13.925 bb in
2013, 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 4). Total supplies of 15.472 bb in “current crop” MY
2014/15 are comparable to recent year’s amounts of 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, 11.904
bb in “short crop” MY 2012/13, and 14.686 bb in MY 2013/14 (2nd highest).
Beginning stocks of 1.232 bb in “current crop” MY 2014/15 are down marginally (‐ 4 mb) from October‐
December USDA WASDE reports. The total of 1.232 bb in beginning stocks in “current crop” MY 2014/15 is up
from 821 mb in MY 2013/14, 989 mb in MY 2012/13, and 1.128 bb in MY 2011/12, but less 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
“current crop” MY 2014/15 of 1.232 bb is up considerably from the low of 426 mb that occurred in MY
1996/97 (Table 1 and Figure 4).
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), and are also down sharply from the record high of 160 mb in the drought‐stressed 2012/13
marketing year. These amounts of U.S. corn imports are comparable to 29 mb in MY 2011/12, and 28 mb in
MY 2010/11.
U.S. Corn Use by Category & Total Use
U.S. Ethanol Production and Corn Usage: Projected U.S. corn use for ethanol production of 5.250 bb in
“current crop” MY 2014/15 is up from 5.175 bb in January and from 5.150 bb in the December WASDE report –
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 weeks (Table 1 and Figures 5‐6).
This projection of 5.250 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.
Figure 6 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 crop” MY 2014/15 has
ranged from 4.911‐5.530 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 February 6, 2015, corn
usage for ethanol production was been on pace to reach 5.277 bb in “current crop” MY 2014/15. This
estimate of 5.277 bb is 27 mb more than the USDA’s February 2015 WASDE report estimate of 5.250 bb of
corn to be used for ethanol production during “current crop” MY 2014/15, with 23 of 52 weeks (44.2%) 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 7 – which shows estimated a) DDGS
Page | 5
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 1.049‐1.130 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
projected for MY 2013/14, and a projection of 1.016 bb in “current crop” MY 2014/15. Over the same five
most recent marketing years, DDGS exports in corn equivalent weights are estimated to range from 299 to 484
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 484 mb in “current crop” MY
2014/15.
U.S. Corn Exports: Projected U.S. corn exports of 1.750 in “current crop” MY 2014/15 are 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 5 and 7). According to the USDA Foreign Agricultural Service (FAS) weekly
export data (http://apps.fas.usda.gov/export‐sales/esrd1.html), as of February 5th, through the 23rd week of “current crop”
MY 2014/15 (23 of 52 weeks), 627.6 mb of U.S. corn had been physically shipped for export – equal to 35.9%
of the USDA’s updated projection for “current crop” MY 2014/15 of 1.750 bb. An additional 677.5 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 627.6 mb in past shipments plus 677.5 mb in forward sales amounts to 1,305.1 mb, or
74.6% of the USDA’s 1.750 bb U.S. corn export target for “current crop” MY 2014/15 in the February 10th
USDA WASDE report with 44.2% (23/52 weeks) of the marketing year completed. United States’ corn exports
will need to average 38.7 mb per week for the remainder of the “current crop” 2014/15 marketing year to
achieve the USDA’s 1.750 bb projection. This compares to 28.1 mb and 24.4 mb of export shipments for the
weeks ending January 29th and February 5th, respectively – behind the pace needed to meet the USDA’s export
projection.
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 5 and 7).
Feed and Residual Use: Forecast U.S. feed and residual use of 5.250 bb in “current crop” MY 2014/15 is
down 25 mb from January, and down 125 mb from the December WASDE (Table 1, Figures 5 and 7). 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 5.000 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.
In the USDA February 13th Feed Outlook Report (http://usda.mannlib.cornell.edu/usda/current/FDS/FDS‐02‐13‐2015.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 125.9 million metric tons (mmt) in MY 2012/13 (87.1% corn), and 134.5 mmt in
MY 2013/14 (95.1% corn), and is projected to be 142.8 mmt in “current crop” MY 2014/15 (93.4% corn). Over
this same three year period, total U.S. Grain Consuming Animal Units were estimated to be 92.3 million in MY
Page | 6
2012/13, and 90.9 million in “current” MY 2013/14, and are projected to be 92.8 million in “current crop” MY
2014/15.
As a result, U.S. Energy Feeds per Grain Consuming Animal Unit is estimated to be 1.364 metric tons per
animal unit (mt/au) in MY 2012/13, and 1.477 mt/au in MY 2013/14, and is projected to be 1.539 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 “record large crop” MY
2013/14, and now into the new 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 corn and other feedgrain prices.
Total Use of U.S. Corn for “current crop” MY 2014/15 is projected to be a record high 13.645 bb – up 50
mb from January, but down 25 mb from the December USDA WASDE report. This amount is up from the
previous record high of 13.454 bb in MY 2013/14, and up sharply from 11.083 bb in drought‐affected MY
2012/13 (Table 1 and Figures 5 & 7). United States’ total corn use has varied widely in recent marketing years
due mainly to changes in available U.S. corn supplies, trending from 12.737 bb in MY 2007/08, 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 the projected new record high amount of
13.645 bb in “current crop” MY 2014/15.
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 – down 50 mb from
January and down 171 mb from the December WASDE report (Table 1 & Figure 4). 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.
Projected percent (%) ending stocks‐to‐use of 13.39% in “current crop” MY 2014/15 has been trending
lower since fall, being down from 13.81% in January, 14.62% in December, 14.70% in November, and from
15.3% in the October WASDE report (Table 1 and Figures 8‐9). 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 9.2% in MY 2013/14, and now to a projected level of
13.4% 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 $3.40‐$3.90
bu/ac (midpoint = $3.65) (Table 1 & Figures 8‐9). This price range is narrower by $0.05 /bu on each end of the
range from January, but up from a forecast range of $3.20‐$3.80 (midpoint = $3.50) in the December 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. However, if the February 10th 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 $4.46 in MY 2013/14, and again down to $3.40‐$3.90 (midpoint = $3.65) in “current crop” MY 2014/15.
Page | 7
I‐D. KSU Corn Market Scenarios: MY 2014/15 & “Next Crop” MY 2015/16
Kansas State University Extension forecasts of U.S. corn supply‐demand balances and prices for the
“current crop” 2014/15 and “next crop” 2015/16 marketing years are provided below. Given the market
information available in mid‐February, the conservative price projections that follow seem reasonable –
especially for the current marketing year, i.e., “current crop” MY 2014/15. There is the possibility that the
USDA is overly pessimistic in its projections of U.S. corn usage in the “current crop” 2014/15 marketing year –
which would ultimately lead to lower U.S. corn supply‐demand balances, and at least marginally higher prices
than are currently being projected for the current marketing year.
A. KSU “Current Crop” MY 2014/15 U.S. Corn Supply‐Demand & Price Projection
These KSU supply‐demand and price projections for “current crop” MY 2014/15 reflect the possibility of
U.S. corn usage being underestimated by the USDA in the current marketing year. KSU projections of 2015
U.S. corn planted and harvested acreage are found in Table 1 and Figure 2. Projections of 2015 probability‐
weighted U.S. corn yields are found in Table 1 and Figure 3. Probability‐weighted KSU forecasts of U.S. corn
average prices for “current crop” MY 2014/15 are based on projections of U.S. corn % ending stocks‐to‐use
shown in Table 1 and Figures 8‐9.
“Current crop” 2014/15 KSU Scenario for U.S. Corn Supply‐Demand – 20% Probability
‐ Total Supplies …
December 17, 2014
Grain Market Outlook
CME eCorn Futures
July 21 – December 15, 2014
Close = $4.32 ¾ on 12/15/2014
MAR 2015 CME eCorn Futures
July 21 – December 15, 2014
Close = $4.08 ½ on 12/15/2014
Page | 4
Based on these 2014 acreage and yield forecasts, the USDA projected 2014 U.S. corn production to be a
record high 14.407 billion bushels (bb) – larger than the previous record high of 13.925 bb in 2013, 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 15.668
bb – resulting from beginning stocks of 1.236 bb, projected 2014 production of 14.407 bb, and projected
imports of 25 million bushel (mb) (Table 1 and Figure 4). Total supplies of 15.668 bb in “current crop” MY
2014/15 are 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, 11.904 bb in MY 2012/13, and 14.782
bb in MY 2013/14 (2nd highest).
Beginning stocks of 1.236 bb in “current crop” MY 2014/15 are unchanged from October‐November, but
are up sharply from 821 mb in 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 (Table 1 and Figure 4).
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), and also down sharply from the record high of 160 mb in the drought‐stressed 2012/13 marketing
year. These amounts of U.S. corn imports are comparable to 29 mb in MY 2011/12, and 28 mb in MY 2010/11.
U.S. Corn Use by Category & Total Use
U.S. Ethanol Production and Corn Usage: Projected U.S. corn use for ethanol production of 5.150 bb in
“current crop” MY 2014/15 is unchanged from November but up 25 mb from September‐October – following
from expectations of low corn input prices and a continuation of at least marginal profitability for U.S. ethanol
production (Table 1 and Figures 5‐6). This projection of 5.150 bb in “current crop” MY 2014/15 is up from
5.134 bb in MY 2013/14 (down 2 mb), and up from 4.641 bb in MY 2012/13, and 5.000 bb in MY 2011/12.
Figure 6 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 crop” MY 2014/15 has
ranged from 4.911‐5.508 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 December 5, 2014, corn
usage for ethanol production was been on pace to reach 5.185 bb in “current crop” MY 2014/15. This
estimate of 5.185 bb is 35 mb more than the USDA’s December 2014 WASDE report estimate of 5.150 bb of
corn to be used for ethanol production during “current crop” MY 2014/15, with 14 of 52 weeks (26.9%) 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 7 – 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 1.049‐1.164 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
Page | 5
DDGS corn‐weight equivalents in MY 2010/11, 1.130 bb in MY 2011/12, 1.049 bb in MY 2012/13, 1.160 bb
projected for MY 2013/14, and a projection of 1.164 bb in “current 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 307
mb, with approximately 307 bb of DDGS‐corn equivalents projected for the “current crop” MY 2014/15 U.S.
corn marketing year.
U.S. Corn Exports: Projected U.S. corn exports of 1.750 in “current crop” MY 2014/15 are 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 (Figures 5 and 7). According to the USDA Foreign Agricultural Service (FAS) weekly export data
(http://apps.fas.usda.gov/export‐sales/esrd1.html), as of December 4th, through the fourteenth week of “current crop” MY
2014/15 (14 of 52 weeks), 391.2 mb of U.S. corn had been physically shipped for export – equal to 22.4% of
the USDA’s updated projection for “current crop” MY 2014/15 of 1.750 bb. An additional 542.1 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 391.2 mb in past shipments plus 542.1 mb in forward sales amounts to 933.3 mb, or
53.3% of the USDA’s 1.750 bb U.S. corn export target for “current crop” MY 2014/15 in the December 10th
USDA WASDE report with 26.9% (14/52 weeks) of the marketing year completed. United States’ corn exports
will need to average 35.8 mb per week for the remainder of the “current crop” 2014/15 marketing year to
achieve the USDA’s 1.750 bb projection. This compares to 29.4 mb and 26.7 mb of export shipments for the
weeks ending November 27th and December 4th, respectively – behind the pace needed to meet the USDA’s
export projection.
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 1.363 bb in MY 2013/14, and compares to 1.397 bb in MY 2012/13, and 1.428 bb
in MY 2011/12 (Figures 5 and 7).
Feed and Residual Use: Forecast U.S. feed and residual use of 5.375 bb in “current crop” MY 2014/15 is
unchanged from October‐November, but up 25 mb from the September WASDE report (Figures 5 and 7). This
projection of 5.375 bb in “current crop” MY 2014/15 is up from 5.132 bb for MY 2013/14, and up from 4.315
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 reported by the USDA over the same time period as shown in
what follows.
In the USDA December 12th Feed Outlook Report (http://www.http://usda.mannlib.cornell.edu/usda/current/FDS/FDS‐12‐12‐
2014.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 125.8 million metric tons (mmt) in MY 2012/13 (87.1% corn), and 137.0
mmt in MY 2013/14 (95.2% corn), and is projected to be 146.6 mmt in “current crop” MY 2014/15 (93.1%
corn). Over this same three year period, total U.S. Grain Consuming Animal Units were estimated to be 92.3
million in MY 2012/13, and 90.3 million in “current” MY 2013/14, and are projected to be 90.7 million in
“current crop” MY 2014/15.
As a result, U.S. Energy Feeds per Grain Consuming Animal Unit is estimated to be 1.363 metric tons per
animal unit (mt/au) in MY 2012/13, and 1.517 mt/au in MY 2013/14, and is projected to be 1.616 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 MY 2013/14, and now into
Page | 6
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 – bring downward pressure on corn prices.
Total Use of U.S. Corn for “current crop” MY 2014/15 is projected to be 13.670 bb – up 10 mb from
November and up 15 mb from October. This amount is up from 13.546 bb in MY 2013/14, and up sharply from
11.083 bb in drought‐affected MY 2012/13 (Table 1 and Figures 5 & 7). United States’ total corn use has
varied largely in recent marketing years due mainly to changes in available U.S. corn supplies, trending from
12.737 bb in MY 2007/08, 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 current record high of 13.546 bb in MY 2013/14, and
the projected new record high amount of 13.670 bb in “current crop” MY 2014/15.
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 1.998 bb – down 10 mb from
November and down 83 mb from the October WASDE report (Table 1 & Figure 4). This forecast amount of
U.S. corn ending stocks of 1.998 bb in “current crop” MY 2014/15 is up from 1.236 bb in MY 2013/14, and
from 821 mb in MY 2012/13. 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, and 1.236 bb in MY 2013/14, and are now projected to be 1.998 bb
in “current crop” MY 2014/15.
Projected percent (%) ending stocks‐to‐use of 14.62% in “current crop” MY 2014/15 is down marginally
from 14.70% in November, and from 15.3% in the October WASDE report (Table 1 and Figures 8‐9). United
States’ 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 to 7.4% in “drought stricken” MY
2012/13, before increasing for the first time in six (6) years to 9.1% in MY 2013/14, and now to a projected
level of 14.6% 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 $3.20‐$3.80
bu/ac (midpoint = $3.50) (Table 1 & Figures 8‐9) – unchanged from November, but up from $3.10‐$3.70
(midpoint = $3.40) in the October WASDE report, and the same as the September 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. However, if the December 10th 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 $4.46 in MY 2013/14, and again down to $3.20‐$3.80 (midpoint = $3.50) in “current” MY 2014/15.
I‐D. KSU U.S. Corn Market Scenarios: “Current crop” MY 2014/15 & “Next Crop” MY
2015/16
Kansas State University Extension forecasts of U.S. corn supply‐demand balances for “current crop” in the
2014/15 and “next crop” 2015/16 marketing years are provided below. Given the market information
available in mid‐December 2014, these conservative price projections that follow seem reasonable – especially
for the current marketing year, i.e., “current crop” MY 2014/15. However, some marginal amount of 2014 U.S.
corn production uncertainty still remains that may be resolved in the January 12, 2015 USDA NASS Crop
Page | 7
Production Annual Summary report. Also, there is the possibility that the USDA is overly pessimistic in its
projections of U.S. corn usage in the “current crop” 2014/15 marketing year – which would ultimately lead to
lower U.S. corn supply‐demand balances, and at least marginally higher prices than are currently being
projected for the current marketing year.
A. KSU “Current Crop” MY 2014/15 U.S. Corn Supply‐Demand & Price Projection
These Kansas State University supply‐demand and price projections for “current crop” MY 2014/15 reflect
the possibility of U.S. corn usage being underestimated by the USDA in the current marketing year. KSU
projections of 2015 U.S. corn planted and harvested acreage are found in Table 1 and Figure 2. Projections of
2015 probability‐weighted U.S. corn yields are found in Table 1 and Figure 3. Probability‐weighted KSU
forecasts of U.S. corn average prices for “current crop” MY 2014/15 are based on projections of U.S. corn %
ending stocks‐to‐use shown in Table 1 and Figures 8‐9.
“Current crop” 2014/15 KSU Scenario for U.S. Corn Supply‐Demand – 30% Probability
‐ Total Supplies …
September 18, 2014
Grain Market Outlook
CME eCorn Futures
Jan. 17, 2014 – Sept. 16, 2014
Close = $3.64 ¼ on 9/16/2014
DEC 2014 CME eCorn Futures
Jan. 17, 2014 – Sept. 16, 2014
Close = $3.43 ¾ on 9/16/2014
Page | 3
Since then, DEC 2014 corn futures prices have traded in a range from a low of $3.35 ¾ on September 15th
to a high of $3.50 ½ on September 16th, before closing at $3.43 ¾ on that same day. The low closing price of
$3.38 ½ on September 12th was a record historic low for the DECEMBER 2014 corn futures contract.
The “new crop” MAY 2015 corn futures market contract also responded in a moderately negative manner
to the information in the September11th USDA reports. On the day of the report – Thursday, September 11th –
Chicago Board of Trade (CBOT) MAY 2015 corn futures prices opened at the high for the day at $3.66 per
bushel, and traded as low as $3.56 ¾ during the session, before settling at $3.62 – also down $0.04 ¾ for the
day (Figure 1). Since then, MAY 2015 corn futures prices have traded in a range from a low of $3.56 ¼ on
September 15th to a high of $3.70 on September 16th, before closing at $3.64 ¼ on that same day. The low
closing price of $3.59 ½ on September 12th was a record historic low for the MAY 2015 corn futures contract.
Question: Do these prices represent a fall harvest low?
It is possible that the sideways trend in DEC 2014 and MAY 2015 corn futures prices since the release of
the September 11th USDA reports may signal that “the market is looking for a low” in corn futures prices for fall
2015. Of course the results of the October and 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. However, given what
the market now has in hand for information, that prices have not continued lower since the September 11th
USDA reports is an important market signal that the lows in the market may be occurring at this time.
I‐C. U.S. Corn Supply‐Demand
U.S. Corn Acreage, Yield & Production
The USDA projected that 2014 U.S. corn total planted acreage would be 91.641 million acres (ma)
unchanged from July‐August USDA projections, but down 50,000 acres from the March 31st USDA NASS
Prospective Plantings Report (Table 1 and Figure 2). Planted acreage of 91.641 million acres in 2014 is down
from 95.365 ma in 2013, 97.155 ma in 2012, and 91.936 ma in 2011. In addition, the USDA projected 2014
U.S. corn harvested acreage to be 83.839 ma – unchanged from July‐August but 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.
Prevented Planting Impacts? It is possible that these figures for 2014 U.S. corn planted and harvested
acres could be adjusted low due to prevented planting that occurred this past spring. Farm Service Agency
(FSA) estimates released in August and September indicated as much as 2.5‐3.3 million acres may have been
designated as “prevented planted”. However, there are questions about how these FSA prevented planting
data are to be interpreted. Regardless, it seems likely that at least a marginal decrease in USDA projections of
2014 U.S. corn planted and harvested acreage will occur in either the upcoming October, November or January
2015 USDA NASS Crop Production reports, which could lead to at least a marginal reduction in 2014 U.S. corn
production estimates, and which would in turn lead to adjustments in “new crop” 2014/15 marketing year U.S.
corn supply‐demand balances.
The projected 2014 U.S. average corn yield of 171.7 bushels per acre (bu/ac) would be a record high, and is
up from USDA projections of 167.4 bu/ac in August, and 165.3 in July. This projection of 171.7 bu/ac in
Page | 4
September is up from 158.8 bu/ac in 2013, the drought affected 2012 low yield of 123.4 bu/ac., and the
previous 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 14.395 billion bushels (bb) – which would be
the highest amount on record, larger than the current 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 projects that total supplies of U.S. corn for “new crop” MY 2014/15 are a record high 15.607 bb
– resulting from beginning stocks of 1.181 bb, projected 2014 production of 14.395 bb, and projected imports
of 30 million bushel (mb) (Table 1). Total supplies of 15.607 bb in “new crop” MY 2014/15 are 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 “old crop” MY
2013/14 (2nd highest).
Beginning stocks of 1.181 bb in “new crop” MY 2014/15 are unchanged from August, but down from a
projection of 1.246 bb in the July WASDE report. Projected beginning stocks of 1.181 bb in “new crop” MY
2014/15 are up sharply from both 821 mb in “old crop” 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 160 mb in the
drought‐stressed 2012/13 marketing year. These amounts of U.S. corn imports are comparable to 29 mb in
MY 2011/12, and 28 mb in MY 2010/11.
U.S. Corn Use by Category & Total Use
U.S. Ethanol Production and Corn Usage: Projected U.S. corn use for ethanol production of 5.125 bb in
“new crop” MY 2014/15 is up 50 mb from August and up 75 mb from July – following from expectations of low
corn input prices and continued profitability on U.S. ethanol production. This projection of 5.125 bb in “new
crop” MY 2013/14 is unchanged from 5.125 bb in “old crop” MY 2013/14 (up 5 mb), while being up from 4.641
bb (down 7 mb) 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 “old crop” MY 2013/14 had ranged from 4.638‐5.418
bb on a weekly basis since early September 2013 ‐ the beginning of the “current” 2013/14 marketing year.
Only 1 week of ethanol production for “new crop” MY 2014/15 has been reported to date by the EIA (i.e., the
week ending September 5th), with estimated corn use at a rate that would equal 5.168 bb for the marketing
year.
Over the period of from September 1, 2013 through August 29, 2014, corn usage for ethanol production
was been on pace to reach 5.073 bb in “old crop” MY 2013/14. This estimate of 5.073 bb is less than the
USDA’s adjusted September 2014 WASDE report estimate of 5.125 bb of corn to be used for ethanol
production during “old crop” MY 2013/14 (which had been raised 5 mb in the August 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
Page | 5
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 1.049‐1.158 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, 1.049 bb in MY 2012/13, 1.158 bb
projected for “old crop” MY 2013/14, and a projection of 1.158 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 306 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 1.750 in “new crop” MY 2014/15 are up 25 mb from the
August WASDE, but down from the estimate of 1.925 bb (up 25 mb) in “old crop” MY 2013/14, but is up 140%
sharply from 730 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, as of September 4th, the first week of “new crop” MY
2014/15, 27.4 mb of U.S. corn had been shipped for export – equal to only 1.6% of the USDA’s updated
projection for “new crop” MY 2014/15 of 1.750 bb. An additional 459.9 mb of U.S. corn had been sold for
future export sales in the “new crop” 2014/15 marketing year – prior to August 31, 2015 (the end of “new
crop” MY 2014/15).
Adding together 27.4 mb in past shipments plus 459.9 mb in forward sales amounts to 487.2 mb, or 27.8%
of the USDA’s 1.750 bb U.S. corn export target for “new crop” MY 2014/15 in the September 11th USDA
WASDE report with 1.9% (1/52 weeks) of the marketing year completed. United States’ corn exports will
need to average 33.8 mb per week for the remainder of the “new crop” 2014/15 marketing year to achieve the
USDA’s 1.750 bb projection. This compares to 27.4 mb of export shipments for the week ending Sept. 4th.
Non‐Ethanol FSI: Forecast non‐ethanol food, seed and industrial (FSI) use of 1.405 bb (up 30 mb from
August) in “new crop” MY 2014/15 is greater than 1.375 bb (down 10 mb) in “old crop” MY 2013/14, and
compares to 1.398 bb in 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 5.325 bb in “new crop” MY 2014/15 is up 75
mb from the August WASDE report, and up 125 mb from the July WASDE (Figure 4). This projection of 5.325
bb in “new crop” MY 2014/15 is up from 5.175 bb for “old crop” MY 2013/14, and up from 4.339 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 reported by the USDA over the same time period.
In the USDA September 15th Feed Outlook Report (http://www. http://usda.mannlib.cornell.edu/usda/current/FDS/FDS‐09‐15‐
2014.pdf) 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 125.9 million metric tons (mmt) in MY 2012/13 (87.5% corn), and 137.1 mmt
in “old crop” MY 2013/14 (95.9% corn), and is projected to be 145.8 mmt in “new crop” MY 2014/15 (92.8%
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, and 89.3 million in “current” MY 2013/14, and are projected to be 89.9 million in “new
crop” MY 2014/15.
Page | 6
As a result, U.S. Energy Feeds per Grain Consuming Animal Unit is estimated to be 1.372 metric tons per
animal unit (mt/au) in MY 2012/13, and 1.535 mt/au in “old crop” MY 2013/14, and is projected to be 1.622
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 “old crop” MY 2013/14,
and now 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 projected to also increase.
Total Use of U.S. Corn for “new crop” MY 2014/15 is projected to be 13.605 bb – up 170 mb from August
and up 270 mb from July. This amount of 13.605 bb in total use for “new crop” MY 2014/15 is marginally
larger than the record high of 13.600 bb in “old crop” MY 2013/14, and up sharply from 11.108 bb (down 3
mb) 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, 13.055 bb in MY 2010/11, 12.528 bb in MY 2011/12, 11.108 bb in MY
2012/13, the current record high of 13.600 bb in “current” MY 2013/14, and the projected new record high
amount of 13.605 bb in “new crop” MY 2014/15.
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 2.002 bb – up 194 mb from the
August WASDE report. This forecast amount of U.S. corn ending stocks of 2.002 bb in “new crop” MY 2014/15
up from 1.181 bb in “old crop” MY 2013/14 – which was unchanged from August WASDE, but lowered 65 mb
from 1.246 bb in the July WASDE report (Table 1 & Figure 4). Projected “new crop” MY 2014/15 U.S. corn
ending stocks of 2.002 bb would be greater than 1.673 bb of U.S. corn ending stocks for MY 2008/09, and
1.708 bb in MY 2009/10 – and markedly larger than the recent relatively low ending stocks figures of 1.128 bb
in MY 2010/11, 989 mb in MY 2011/12, 821 mb in “drought stricken” MY 2012/13, and 1.181 bb in “old crop”
MY 2013/14.
Projected percent (%) ending stocks‐to‐use of 14.7% in “new crop” MY 2014/15 are up from 13.5% in both
the August and July WASDE reports (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 stricken” MY 2012/13, before increasing for the first time in six (6) years to 8.7% in “old
crop” MY 2013/14 (down from 9.2% in the July WASDE report), and now to a projected level of 14.7% 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 $3.20‐$3.80 bu/ac
(midpoint = $3.50) (Table 1 & Figures 7‐8) – down from $3.55‐$4.25 (midpoint = $3.90) in the August WASDE
report, and down from $3.65‐$4.35 (midpoint = $4.00) in the July 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, up to the record high of
$6.89 in “drought stricken” MY 2012/13. However, if the September 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
$4.45 in “old crop” MY 2013/14, and again down to $3.20‐$3.80 (midpoint = $3.50) in “new crop” MY 2014/15.
…
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) in …
March 15, 2016
Grain Market Outlook
ough spring 2016 leading to limited corn net returns prospects – may impact U.S. farmers’ 2016 corn
acreage decisions and as a result 2016 U.S. corn production prospects.
Market factors such as a) economic and financial system disruptions impacting grain and energy commodity
markets, b) U.S. farmer resistance to selling at low March‐April 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
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 feedgrain usage and providing underlying support for U.S. corn
exports. To date in the “current” 2015/16 marketing year the high value of the U.S. dollar and current
prospects for a large 2016 South American corn crop have been significant limiting factors for U.S. corn
exports.
USDA Estimate for “Current” MY 2015/16: The USDA made no changes in its estimate of 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 13.545 bb – including ethanol use of 5.225
bb, non‐ethanol Food, Seed, and Industrial (FSI) use of 1.370 bb, exports of 1.650 bb, and feed and residual use
of 5.300 bb. Ending stocks are forecast at 1.837 bb (13.56% 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‐$3.80 /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 “Next Crop” MY 2016/17: At the USDA Agricultural Outlook Conference in Arlington, VA
on February 25‐26, the USDA forecast of U.S. corn supply‐demand and prices for the “next crop” 2016/17
marketing year beginning September 1, 2016. The USDA projected 2016 U.S. corn plantings of 90.000 million
acres (ma) – up 2.001 ma from 2015. Forecast 2016 harvested acres of 82.300 ma would be up 1.551 ma vs
2015. With projected yields of 168.0 bu/ac, 2016 U.S. corn production is projected to be 13.825 billion bushels
(bb) – 3rd highest on record behind 13.829 bb in 2013 and 14.216 bb in 2014, but greater than 13.601 bb in
2015. With forecast MY 2016/17 total use of 13.725 bb (2nd highest behind 13.748 bb in MY 2014/15), and
projected ending stocks of 1.977 bb (14.40% S/U), U.S. corn prices are projected by the USDA to be $3.45 /bu –
down from the $3.60 /bu midpoint estimate for “current” MY 2015/16.
KSU Forecast for “Next Crop” MY 2016/17: Using recent USDA planted and harvested acres projections (see
above), KSU projections are for long term trend yields for 2016 of 164.5 bu/ac, and 2016 U.S. corn production
of 13.538 bb. Total use of 13.665 bb includes 5.265 bb corn use for ethanol (up 40 mb vs USDA), non‐ethanol
food, seed and industrial use of 1.375 bb (same as USDA), exports of 1.650 bb (down 50 mb vs USDA), and
livestock feed and residual use of 5.375 bb (down 50 mb vs USDA). Following these KSU supply and use
Page | 2
projections, ending stocks are projected to be 1.710 bb (12.51% S/U), with U.S. corn prices projected by KSU to
be $3.75 /bu – up $0.30 /bu from the USDA’s early projection of $3.45 /bu for “next crop” MY 2016/17.
Potential KSU 2016 U.S. Corn “Short Crop Scenario – 13.000 Billion Bushels: If moderately significant corn
production problems were to occur in the U.S. in the summer of 2016 resulting in a 13.000 bb corn (157.95
bu/ac yield on 82.300 ma harvested), then all else being equal, ending stocks for “next crop” MY 2016/17
could decline to 1.172 bb (8.5% S/U), with U.S. corn prices likely to increase to $4.50‐$5.50 per bushel.
World Corn Supply‐Demand: World total supplies of 1,174.75 million metric tons (mmt) are projected for
“current” MY 2015/16, down marginally from 1,184.5 mmt in “old crop” MY 2014/15, but up from 1,124.1
mmt in MY 2013/14. Projected World corn ending stocks of 207.0 mmt (21.4% S/U) in “current” MY 2015/16
are up from 205.1 mmt (20.9% S/U) in “old crop” MY 2014/15, and from 174.8 mmt (18.4% S/U) in MY
2013/14.
I. U.S. Corn Market Situation and Outlook
I‐A. March 9th USDA WASDE Report & February 25‐26 Agricultural Outlook
Conference, Arlington, Virginia
On March 9th the USDA World Agricultural Outlook Board (WAOB) released its March World Agricultural
Supply and Demand Estimates (WASDE) report – containing U.S. and World corn supply‐demand and price
projections for the 2013/14, “old crop” 2014/15, as well as the “current” 2015/16 marketing years. The
“current” 2015/16 marketing year for U.S. corn began on 9/1/2015 and will last through 8/31/2016.
The March 9th USDA WASDE report followed earlier U.S. corn supply‐demand and price projections for the
“next crop” 2016 provided by the USDA at the 2016 Agricultural Outlook Conference in Arlington, Virginia on
February 25‐26, 2016.
I‐B. CME MAY & DECEMBER 2016 Corn Futures Trends
Since lows of $3.54 ½ on January 7th and $3.54 ½ on March 3rd, MAY 2016 Chicago Mercantile
Exchange (CME) corn futures prices have traded higher. On March 9th when the USDA WASDE report
was released, CME MAY 2016 corn futures opened at $3.60, traded in a range of $3.57 ¼ to $3.61 ½,
and closed $0.01 lower at $3.59 ½. Since that day, CME MAY Corn traded in a range from $3.58 on
March 10th to $3.69 ¼ on March 14th before closing at $3.68 ¾ that same day (Figure 1).
…
October 27, 2015
Grain Market Outlook
This trend in the value of the U.S. trade weighted dollar index is significant to the U.S. corn and other U.S.
grain markets, because a higher U.S. dollar exchange rate relative to other major currencies generally makes it
more expensive for foreign buyers of U.S. grains to exchange their country’s currencies for U.S. dollars – which
they would then in turn use to purchase U.S. grain exports (i.e., which are denominated or “priced” in U.S.
dollars in U.S. grain markets). Although this is not the only factor negatively impacting U.S. grain exports, it is a
very important one – working against U.S. corn being an affordable, competitive alternative export seller in
World grain trade.
I‐E. 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 had been used without adjustment by
the USDA through the July 10th, August 12th, and September 11th USDA Crop Production and WASDE reports,
but were adjusted downward in the October 9th USDA reports. The USDA projected that 2015 U.S. corn
planted acreage equaled 88,381,000 acres, down 516,000 acres from a month earlier. This projection of
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88.381 million acres (ma) of 2015 U.S. corn planted is down 2.216 ma (‐2.45%) from 90.597 ma in 2014, down
6.984 ma (‐7.3%) from 95.365 ma in 2013, down 8.910 ma (‐9.16%) from the record high of 97.291 ma in 2012,
and also down from 91.921 ma in 2011 (Table 1 and Figure 4).
The USDA projected that 2015 U.S. corn harvested acreage would be 80,664,000 acres – down 437,000
acres from a month earlier. This projection of 80.664 ma is down 2.472 ma (‐3.0%) from 83.136 ma in 2014,
down 6.787 ma (‐7.8%) from the record high of 87.451 ma in 2013, down 6.701 ma (‐7.7%) from 87.365 ma in
2012, and down from 83.981 ma in 2011 (Table 1 and Figure 4). The USDA implicitly projected that the
proportion of harvested‐to‐planted acreage in 2015 is 91.3%, 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 168.0 bushels per acre (bu/ac) – up 0.5 bu/ac from
the USDA’s September projection, but still less than the record high of 171.0 bu/ac in 2014 (Table 1 and Figure
5). Although this October 2015 USDA projection of 2015 U.S. corn yields of 168.0 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 (88.381 ma), harvested acreage
(80.664 ma), and yield (168.0 ma – USDA), projected 2015 U.S. corn production would be 13.555 billion
bushels (bb) – down 30 million bushels (mb) from the USDA’s September projections, and down 131 mb from
August. This projection of 13.555 bb U.S. corn production in 2015 is the 3rd highest on record, being down
from the record high of 14.216 bb in 2014, and the 2nd highest amount of 13.829 bb in 2013. However, this
projection of 13.555 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 15.316 bb – down 31
mb from September, and down 141 million bushels (mb) from the August WASDE report. This projection of
15.316 bb for “new crop” MY 2015/16 results from beginning stocks of 1.731 bb, projected 2015 production of
13.5585 bb, and projected imports of 30 mb (Table 1 and Figure 6). 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, 14.686 bb in MY 2013/14, the estimated highest amount on record of 15.479 bb in
“old crop” MY 2014/15, and the forecast 2nd highest amount on record of 15.316 bb in “new crop” MY
2015/16.
The USDA forecast of beginning stocks of 1.731 bb in “new crop” MY 2015/16 is down 1 mb from
September and down 41 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 1.731 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 6).
Projected imports of 30 mb in “new crop” MY 2015/16 are down 2 mb from 32 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
Page | 6
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‐September, but up 50 mb from July, and is up from 5.207
bb in “old crop” MY 2014/15 (up 2 mb), and up from 5.124 bb in MY 2013/14, 4.641 bb in MY 2012/13, and
5.000 bb in MY 2011/12 (Table 1 and Figures 7‐8).
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 “new crop” MY 2015/16 has ranged from 5.142‐5.268 bb on a
weekly basis since early September 2015 ‐ the beginning of the “new crop” 2015/16 marketing year. To datd
in the “new crop” 2015/16 marketing year, corn usage for ethanol production has been on pace to reach 5.202
bb in “new crop” MY 2015/16 – less than the USDA’s October 9, 2015 WASDE report estimate of 5.250 bb of
corn to be used for ethanol production. However, the USDA is likely accounting for larger available U.S. corn
supplies being available to ethanol plants / producers through the 2015 fall harvest and 2016 early spring
periods.
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 9 – 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 484 mb, – i.e., 326 mbeqwt in DDGS corn‐weight equivalents in MY
2010/11, 299 mbeqwt in MY 2011/12, 322 mbeqwt in MY 2012/13, 472 mbeqwt in MY 2013/14, 479 mbeqwt in “old
crop” MY 2014/15, and a 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 are down from 1.864
bb in “old crop” MY 2014/15 (down 11 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 7 and 9).
According to USDA Foreign Agricultural Service (FAS) weekly export data (http://apps.fas.usda.gov/export‐
sales/esrd1.html), as of October 15th, through the first 6 weeks of “new crop” MY 2015/16 (6 of 52 weeks), 164.9
mb of U.S. corn had been physically shipped for export – equal to 8.9% of the USDA’s projection of 1.850 bb for
“new crop” MY 2015/16. An additional 302.7 mb of U.S. corn had been pre‐sold for future export shipments
Page | 7
during the remainder of “new crop” 2015/16 marketing year – ending August 31, 2016 (the end of “new crop”
MY 2015/16).
Adding together 164.9 mb in past shipments plus 302.7 mb in forward sales amounts to 467.7 mb, or
25.3% of the USDA’s 1.850 bb U.S. corn export target for “new crop” MY 2015/16 in the October 9th USDA
WASDE report with 11.5% (6/52 weeks) of the marketing year completed. United States’ corn export
shipments will need to average 36.6 mb per week for the remaining 46 weeks of the “new crop” 2015/16
marketing year to achieve the USDA’s 1.850 bb projection. For the weeks ending October 8th and 15th, U.S.
corn export shipments of 23.9 mb and 16.1 mb, respectively, occurred, initially behind the pace needed to
fulfill the USDA’s export projection.
Non‐Ethanol FSI: Forecast non‐ethanol food, seed and industrial (FSI) use of 1.380 bb in “new crop” MY
2015/16 – unchanged from September but up 5 mb from August and up 20 mb from July. Non‐ethanol FSI
usage of 1.380 bb in “new crop” MY 2015/16 would is projected to be greater than 1.359 bb in “old crop” MY
2014/15 (down 6 mb from September), and compares to 1.369 bb in MY 2013/14, and 1.397 bb in MY 2012/13
(Table 1, Figures 7 and 9).
Feed and Residual Use: Forecast U.S. feed and residual use of 5.275 bb in “new crop” MY 2015/16 is down
42 mb from 5.317 bb for “old crop” MY 2014/15 (up 17 mb from last month), but up from 5.040 bb in MY
2013/14 (down 1 mb), 4.315 bb in MY 2012/13, and 4.519 bb in MY 2011/12 (Table 1, Figures 7 and 9). 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 October 14th Feed Outlook Report (http://usda.mannlib.cornell.edu/usda/Old Crop/FDS/FDS‐10‐14‐2015.pdf) and
other online resources the USDA Economic Research Service (ERS) in …
July 21, 2015
Grain Market Outlook
CME Corn Futures
Nov. 20, 2014 – July 20, 2015
Close = $4.16 on 7/20/2015
SEPT 2015 CME Corn Futures
Nov. 20, 2014 – July 20, 2015
Close = $4.05 on 7/20/2015
Page | 4
I‐C. U.S. Corn Supply‐Demand – Focus on “New Crop” 2015/16 Projections
U.S. Corn Acreage, Yield & Production
The USDA’s projections of 2015 U.S. corn planted and harvested acres from the June 30th Acreage report
were used without adjustment in the July 10th USDA Crop Production and WASDE reports. In the June 30,
2015 USDA Acreage report 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 U.S. corn planted in 2015 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 down from 91.921 ma in 2011 (Table 1 and Figure 3).
The USDA projected that 2015 U.S. corn total harvested acreage would be 81.101 million acres (ma),
nearly equal to the USDA WAOB projection in the June 10th WASDE report. This projection of 81.101 ma of
U.S. corn harvested in 2015 is 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 91.7% in 2013, but up from 89.9% in drought‐stricken
2012.
The 2014 U.S. average corn yield of 171.0 bushels per acre (bu/ac) is a record high and unchanged from
the January‐June 2015 USDA reports, and is higher than the 166.8 bu/ac estimate for 2015 in the July 10th
WASDE report (Table 1 and Figure 4). Although this early 2015 USDA projection of 166.8 bu/ac is down from
171.0 bu/ac in 2014, it would still be the second highest U.S. corn yield on record, being up from 158.1 bu/ac in
2013, the drought affected 2012 low yield of 123.1 bu/ac., 147.2 bu/ac in 2011, 152.8 bu/ac in 2010, and up
from the previous historic record high of 164.7 bu/ac in 2009.
Based on this combination of USDA projections for 2015 planted acreage (88.897 ma), harvested acreage
(81.101 ma), and yield (166.8 ma – USDA), projected 2015 U.S. corn production would be 13.530 billion
bushels (bb) – down from the record high of 14.216 bb in 2014, and the previous record high of 13.829 bb in
2013 – but up from 10.755 bb in 2012, 12.314 bb in 2011, 12.425 bb in 2010, and 13.067 bb in 2009 (Table 1).
U.S. Corn Total Supplies
The USDA projects that total supplies of U.S. corn for “new crop” MY 2015/16 are 15.334 bb – down 197
million bushels (mb) from the June 10th WASDE report. This projection of 15.334 bb for “new crop” MY
2015/16 results from beginning stocks of 1.779 bb, projected 2015 production of 13.530 bb, and projected
imports of 25 million bushel (mb) (Table 1 and Figure 5). Total supplies of near 15.334 bb in “new crop” MY
2015/16 would be the second highest on record, being comparable to 14.362 bb in MY 2007/08, 13.729 bb in
MY 2008/09, 14.749 bb in MY 2009/10, 14.161 bb in MY 2010/11, 13.471 bb in MY 2011/12, 11.904 bb in
“short crop” MY 2012/13, 14.686 bb in MY 2013/14, and the record high of 15.474 bb in “current” MY
2014/15.
The USDA forecast of beginning stocks of 1.779 bb in “new crop” MY 2015/16 is down 97 mb from the
June 10th WASDE report, but 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 – while being up at least
moderately 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 1.779 bb is up considerably from the low of 426 mb that
Page | 5
occurred in MY 1996/97, and is the highest since 1.967 bb in MY 2006/07 and 2.114 bb in MY 2005/06 (Table 1
and Figure 5).
Projected imports of 25 mb in “current crop” MY 2015/16 are equal to “current” MY 2014/15, but down
from 36 mb in MY 2013/14 (the 2nd highest on record), and are also down sharply from the record high of 160
mb in the drought‐stressed 2012/13 marketing year. These amounts of U.S. corn imports are comparable to
29 mb in MY 2011/12, and 28 mb in MY 2010/11.
U.S. Corn Use by Category & Total Use
U.S. Ethanol Production and Corn Usage: Projected U.S. corn use for ethanol production of 5.225 bb in
“new crop” MY 2015/16 (up 25 mb from June) is up from 5.200 bb in “current” MY 2014/15 (up 25 mb from
May), and up from 5.134 bb in MY 2013/14, 4.641 bb in MY 2012/13, and 5.000 bb in MY 2011/12 (Table 1 and
Figures 6‐7).
Figure 7 shows weekly U.S. oxygenated plant production of fuel ethanol as reported by the U.S. Energy
Information Administration (www.eia.gov) with a calculated estimate of corn use developed by Kansas State
University. Assuming 2.83 gallons of ethanol produced per bushel of corn (equaling the calculated conversion
of U.S. corn into ethanol in January 2015), these calculations indicate that the equivalent projected annual rate
of U.S. corn used for ethanol production for “current crop” MY 2014/15 has ranged from 4.830‐5.449 bb on a
weekly basis since early September 2014 ‐ the beginning of the “current crop” 2014/15 marketing year. Over
the period of September 1, 2014 through July 10, 2015, corn usage for ethanol production was been on pace
to reach 5.200 bb in “current crop” MY 2014/15. This estimate of 5.200 bb is equal to the USDA’s July 10, 2015
WASDE report estimate of 5.200 bb of corn to be used for ethanol production during “current crop” MY
2014/15, with 45 of 52 weeks (86.5%) 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. According to these KSU
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 in MY 2013/14, 1.006 bb in both “current crop” MY 2014/15, and 1.011 bb in “new crop” MY 2015/16.
Over the five most recent marketing years, DDGS exports in corn equivalent weights are estimated to range
from 299 to 482 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 in MY 2013/14, a near record 479 mb in “current crop” MY 2014/15, and a
record high 482 mb in “new crop” MY 2015/16.
U.S. Corn Exports: Projected U.S. corn exports of 1.875 bb in “new crop” MY 2015/16 (down 25 mb from
June) is up from 1.850 bb (up 25 mb from June) in “current” MY 2014/15, less than 1.917 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 July 9th, through the 45th week of “current crop” MY 2014/15 (45of 52 weeks), 1,508.3 mb
Page | 6
of U.S. corn had been physically shipped for export – equal to 81.5% of the USDA’s projection of 1.850 bb for
“current crop” MY 2014/15. An additional 313.7 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 1,508.3 mb in past shipments plus 313.7 mb in forward sales amounts to 1,832.0 mb, or
99.0% of the USDA’s 1.850 bb U.S. corn export target for “current crop” MY 2014/15 in the July 10th USDA
WASDE report with 86.5% (45/52 weeks) of the marketing year completed. United States’ corn export
shipments will need to average 48.8 mb per week for the remaining 7 weeks of the “current crop” 2014/15
marketing year to achieve the USDA’s 1.850 bb projection. This compares to 38.0 mb and 44.6 mb of export
shipments for the weeks ending July 2nd and July 9th, respectively – i.e., each being behind of the pace needed
to meet the USDA’s most recent export projection.
Non‐Ethanol FSI: Forecast non‐ethanol food, seed and industrial (FSI) use of 1.360 bb in “new crop” MY
2015/16 is greater than 1.346 bb in “current” MY 2014/15 (down 1 mb from May‐June, but reduced 48 mb
from the April WASDE), 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 June) is down 25 from 5.300 bb for “current” MY 2014/15 (up 50 mb from June), 5.034 bb in MY
2013/14, 4.315 bb in MY 2012/13, and 4.520 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 July 14th Feed Outlook Report (http://usda.mannlib.cornell.edu/usda/current/FDS/FDS‐07‐14‐2015.pdf) the USDA
Economic Research Service (ERS) indicates that over the MY 2013/14 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 be 134.3 million metric tons (mmt) in MY 2013/14 (95.2% corn), and 144.6 mmt in “current” MY
2014/15 (93.1% corn), and 143.5 mmt in “new crop” MY 2015/16 (93.4% corn). Over this same 3 year period,
total U.S. Grain Consuming Animal Units (GCAUs) are estimated to be 91.0 million in MY 2013/14, 93.2 million
in “current” MY 2014/15, and 95.1 million in “new crop” MY 2015/16.
As a result, U.S. Energy Feeds per Grain Consuming Animal Unit is estimated to be 1.476 metric tons per
animal unit (mt/au) in MY 2013/14, and 1.552 mt/au in “current” MY 2014/15, and is projected to be 1.509
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 record “large crop”
years of MY 2013/14 and “current” 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 fed per
animal unit and total feed use of U.S. corn has increased – 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 13.735 bb (down 25 mb
from June) – up from the current record highs of 13.696 bb in “current” MY 2014/15 (up 99 mb from June)
(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
Page | 7
record high amount of 13.696 bb in “current crop” MY 2014/15, and now the new projected record high of
13.735 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 1.599 bb (down 172 mb from
June), which is down 180 mb from 1.779 bb in “current” MY 2014/15 (also down 97 mb from June) (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, 1.779 bb in “current crop” MY 2014/15, and now are forecast
to be 1.599 bb in “new crop” MY 2015/16.
Projected percent (%) ending stocks‐to‐use of 11.64% in “new crop” MY 2015/16 is down from 12.87% in
the June WASDE report, and down from 13.00% in “current” 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, before increasing for the first time in six (6) years to 9.16% in MY
2013/14, and then to 12.99% in “current” MY 2014/15 – with a projected decline to 11.64% 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 from a projection of $3.20‐$3.80 ($3.50 midpoint) (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 July 10th WASDE projection holds true, prices will now have declined since the $6.89 record
high in MY 2012/13, down to $4.46 in MY 2013/14, $3.60‐$3.80 (midpoint = $3.70) in “current crop” MY
2014/15, and to $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.
The first scenario is based on USDA reported U.S. corn acreage with a yield of 165.0 bu/ac – given a 30%
probability of occurring in 2015. The second scenario is based on the USDA’s most recent projections of
planted and harvested 2015 U.S. corn planted acreage, along with a normal crop “trend yield” of 162.25 bu/ac
– given a 55% probability of occurring in 2015. The third scenario is based on USDA planted acreage
projections and a short crop “low yield” of 155.0 bu/ac – given a 15% probability of occurring in 2015.
KSU Scenario #1 – A “Normal Crop” of 13.382 bb with 30% 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 planted acreage in 2015 (equal to June 30th USDA Acreage report projections), and how U.S. corn
yields that are at least moderately lower than USDA’s most recent July 10th WASDE projection would impact
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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. This scenario is thought to have approximately a 30%
probability of occurring (i.e., 3 out of 10) at this point in time.
Specifically, this KSU U.S. corn supply‐demand scenario assumes that 2015 U.S. corn planted acreage will
be down 1.700 million acres (ma) to 88.897 ma (equal to the USDA’s June 30th Acreage Report projection),
with 2015 U.S. corn harvested acreage down 2.035 ma to 81.101 ma (also equal to the USDA’s June 30th
Acreage Report projection) (Table 1 and Figure 3). Forecast 2015 U.S. corn yields of 165.0 bu/ac in this
scenario are down from the USDA’s July 10th forecast of 166.8 bu/ac, but still up from the long term (1973‐
2014) trend line U.S. corn yields of 162.3 bu/ac. Taking these forecasts of 2015 U.S. corn acreage and yields
together, 2015 U.S. corn production is forecast to be 13.382 bb.
Following these projections of corn production for “new crop” MY 2015/16, U.S. total corn usage is then
estimated to be a record high 13.710 – down marginally from the USDA’s July 10th projection of 13.735 bb for
“new crop” MY 2015/16 (Table 1 and Figure 6).
In this scenario, KSU estimates are for U.S. corn ending stocks to be 1.476 bb, and for % ending stocks‐to‐
use of 10.77% for “new crop” MY 2015/16. Marketing year average U.S. corn prices would be projected to
average near $4.25 /bu for “new crop” MY 2015/16 (Table 1 and Figures 9 and 10).
Following is the KSU “normal crop / trend yield” U.S. corn supply‐demand and price scenario for “new
crop” MY 2015/16 – given a 30% probability of occurring.
1st KSU Scenario for “New Crop” MY 2015/16 U.S. Corn Supply/Demand & Prices
Estimated Probability of Occurring = 30% …