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May 4, 2015
Grain Market Outlook
rgentina and Paraguay exports as a proportion of
World soybean trade in “current year” MY 2014/15 has been caused 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 (34.2% of the World
total). United States’ soybean production of 108.0 mmt (3.969 billion bushels or ‘bb’) 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 35.85 mmt in MY 2012/13 (35.7% of World total), to 44.8
mmt in MY 2013/14 (39.7% of World total), and a projected amount of 48.7 mmt (1.790 bb) in “current crop”
MY 2014/15 (41.45% of the World total). Projected United States’ soybean exports of 48.7 mmt 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 market 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 unquestionably 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 at
Farmers Grain Coop in Hutchinson, Kansas (Hutchinson being a major grain market hub in the south central
part of the state) had fallen to as low as $8.44 per bushel on October 26, 2015, before moving above $9.00 on
October 24, 2015. Cash soybean prices at this location have traded in the range of $9.00 (on March 17, 2015)
to $9.95 (on January 6, 2015) since then, with a cash spot price of $9.30 ($0.36 under basis) offered on
midmorning on Friday, May 1st. “Current crop” MAY 2015 soybean futures were trading at $9.66 per bushel
that day at the time of the $9.30 per bushel bid.
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Soybean forward contract prices for fall harvest in October 2015 in the Hutchinson, Kansas area were in
the range of $8.63 / bu. ($0.78 under basis) to $8.91 ($0.50 under basis). “Current crop” MAY 2015 soybean
futures were trading at $9.41 per bushel that day at the time of these new crop forward contract bids.
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 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
“Current crop” MAY 2015 soybean futures contract prices responded in a negative manner to the
information in the April 9th USDA reports (Figure 1). On the day of the reports CME MARCH 2015 futures
prices opened at $9.71 ¼ /bu, and traded as high as $9.72 and as low as $9.50 ¼ during the session, before
settling at $9.53 ½ – down $0.18 for the day. Since then MAY 2015 soybean futures prices have traded within
the range from a low of $9.44 ½ on April 10th, to a low of $9.97 ¼ on April 30th, before closing at $9.68 ½ on
Friday, May 1st.
Figure 1. MAY 2015 and NOV 2015 CME Soybean Futures Price Charts (electronic trade) …
March 17, 2015
Grain Market Outlook
I‐C. U.S. Corn Supply‐Demand – USDA “Current Crop” 2014/15 Projections
U.S. Corn Acreage, Yield & Production
In its March 2015 USDA WASDE report the USDA made no change from the January‐February WASDE
reports 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‐February projections 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‐February 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 is up from
158.1 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.
Based on these 2014 acreage and yield projections, the USDA maintained is earlier January‐February
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 13.829 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 and Figure 4).
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
DEC 2015 CME eCorn Futures
Sept. 11, 2014 – March 13, 2015
Close = $4.04 ¾ on 3/13/2015
MAY 2015 CME eCorn Futures
Sept. 11, 2014 – March 13, 2015
Close = $3.80 ½ on 3/13/2015
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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 (down 4 mb) from the
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 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
“current crop” MY 2014/15 is down 50 mb from February, but still up from 5.175 bb in January and from 5.150
bb in the December WASDE report. These adjustments in the USDA projections are due to a) low corn input
prices, b) at least moderate strength in distillers grains co‐product prices, and c) increased projections of 2015
U.S. gasoline consumption released in the past month (Table 1 and Figures 5‐6). This projection of 5.200 bb in
“current crop” MY 2014/15 is up from 5.134 bb in MY 2013/14, 4.641 bb in MY 2012/13, and 5.000 bb in MY
2011/12.
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 2.83 gallons of ethanol produced per bushel of corn (equaling the calculated conversion
of U.S. corn into ethanol in January 2015), these calculations indicate that the equivalent projected annual rate
of U.S. corn used for ethanol production for “current crop” MY 2014/15 has ranged from 4.772‐5.374 bb on a
weekly basis since early September 2014 ‐ the beginning of the “current crop” 2014/15 marketing year. Over
the period of from September 1, 2014 through March 6, 2015, corn usage for ethanol production was been on
pace to reach 5.127 bb in “current crop” MY 2014/15. This estimate of 5.127 bb is 73 mb less than the USDA’s
March 2015 WASDE report estimate of 5.200 bb of corn to be used for ethanol production during “current
crop” MY 2014/15, with 27 of 52 weeks (51.9%) 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 0.993‐1.130 bb of U.S. corn equivalent bushel‐weights of DDGS are projected
either to have already been or are to be fed to U.S. livestock during each marketing year – i.e., 1.108 bb in
DDGS corn‐weight equivalents in MY 2010/11, 1.130 bb in MY 2011/12, 1.004 bb in MY 2012/13, 993 mb
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projected for MY 2013/14, and a projection of 1.006 bb in “current crop” MY 2014/15. Over the same five
most recent marketing years, DDGS exports in corn equivalent weights are estimated to range from 299 to 479
mb, – i.e., 326 mb in DDGS corn‐weight equivalents in MY 2010/11, 299 mb in MY 2011/12, 322 mb in MY
2012/13, 473 mb estimated for MY 2013/14, and a projection of a record high 479 mb in “current crop” MY
2014/15.
U.S. Corn Exports: Projected U.S. corn exports of 1.800 in “current crop” MY 2014/15 were raised 50 mb in
the March WASDE report from the previous month. This projection of 1.800 bb for MY 2014/15 is down from
the estimate of 1.917 bb in MY 2013/14, but are up sharply from 730 mb in MY 2012/13 – the 40 year low
since MY 1975/76 (Table 1, Figures 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 March 5th, through the 27rd week of “current crop” MY
2014/15 (27 of 52 weeks), 789.2 mb of U.S. corn had been physically shipped for export – equal to 43.8% of
the USDA’s updated projection for “current crop” MY 2014/15 of 1.800 bb. An additional 629.8 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 789.2 mb in past shipments plus 629.8 mb in forward sales amounts to 1,419.0 mb, or
78.8% of the USDA’s 1.800 bb U.S. corn export target for “current crop” MY 2014/15 in the March 10th USDA
WASDE report with 51.9% (27/52 weeks) of the marketing year completed. United States’ corn exports will
need to average 40.4 mb per week for the remainder of the “current crop” 2014/15 marketing year to achieve
the USDA’s 1.800 bb projection. This compares to 54.3 mb and 45.9 mb of export shipments for the weeks
ending February 26th and March 5th, respectively – i.e., ahead of 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‐February, 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 March 10th Feed Outlook Report (http://usda.mannlib.cornell.edu/usda/current/FDS/FDS‐03‐12‐2015.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 (87.05% corn), and 134.5 mmt in
MY 2013/14 (95.1% corn), and is projected to be 144.1 mmt in “current crop” MY 2014/15 (93.4% corn). Over
this same 3 year period, total U.S. Grain Consuming Animal Units (GCAUs) were estimated to be 92.3 million
in MY 2012/13, 90.9 million in “current” MY 2013/14, and 92.9 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 1.551 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 even bigger record large “current crop” MY 2014/15 for corn and other
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aggregated feedgrains, the amount of energy feeds fed per animal unit and total feed use of U.S. corn has
increased – helping to bring downward pressure on the prices of U.S. corn and other feedgrains.
Total Use of U.S. Corn for “current crop” MY 2014/15 is projected to be a record high 13.695 bb – up 50
mb from February and up 100 mb from January, and up 25 mb from the December USDA WASDE report. This
compares to the previous record high of 13.454 bb in MY 2013/14, and is up sharply from 11.083 bb in
drought‐affected MY 2012/13 (Table 1 and Figures 5 & 7). United States’ total corn use has varied widely in
recent marketing years – due mainly to changes in available U.S. corn supplies. Corn supplies in the U.S. over
time have changed from 12.737 bb in MY 2007/08, to 12.056 bb in MY 2008/09, 13.066 bb in MY 2009/10,
13.055 bb in MY 2010/11, 12.528 bb in MY 2011/12, 11.083 bb in MY 2012/13, the previous record high of
13.454 bb in MY 2013/14, and now to the new projected record high amount of 13.695 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 1.777 bb – down 50 mb from
February, down 100 mb from January, and down 221 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 1.777 bb in “current crop” MY
2014/15.
Projected percent (%) ending stocks‐to‐use of 12.98% in “current crop” MY 2014/15 has been trending
lower since fall, being down from 13.39% in February, 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 again up to a
projected level of 12.98% 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 $3.50‐$3.90
bu/ac (midpoint = $3.70) (Table 1 & Figures 8‐9). This price range is higher by $0.10 /bu on the lower end of
the price range from February, with the midpoint of $3.70 being up $0.05 per bushel from the February
WASDE report.
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 March 10th WASDE projection
holds true, prices will have declined for two consecutive years since the $6.89 record high in MY 2012/13,
down to $4.46 in MY 2013/14, and again down to $3.50‐$3.90 (midpoint = $3.70) in “current crop” MY
2014/15.
…
September 29, 2014
Grain Market Outlook
ver the three most recent marketing years.
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 82.6 mmt of U.S. soybean production in MY 2012/13 (30.8% of World total), 89.5 mmt
in “old crop” MY 2013/14 (31.6% of World total), and a projected amount of 106.5 mmt in “new crop” MY
2014/15 (34.2% of the World total).
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United States’ soybean exports have grown from 35.9 mmt in MY 2012/13 (35.7% of World total), to 44.8
mmt in “old crop” MY 2013/14 (39.6% of World total), and a projected amount of 46.3 mmt in “new crop” MY
2014/15 (40.1% of the World total).
United States’ soybean production and exports are projected to be up 29.0% and 29.1%, respectively, over
the three most recent marketing years.
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 sustainability
of Chinese soybean imports at current and projected levels by the USDA is necessary for continuance of the
historicly high World soybean prices that have occurred since the 2012/13 marketing year. Rumors have
surfaced at times in the last year of the possibility of slowing Chinese soybean import demand due to swine
industry production problems or other broad, systematic economic and/or financial factors. However, given
the information available to the USDA at this time, the agency has projected a continuance of the strong
growth trend in Chinese imports in “new crop” MY 2014/15 in recent WASDE reports – even raising the
Chinese import forecast by 1 mmt in the September 11th WASDE report. If this recent upward trend in Chinese
soybean imports were to falter for whatever reason, it could have a substantial negative impact on U.S. and
World soybean market prices.
Now with an anticipated record large fall harvest of soybeans approaching in the United States, cash
soybean prices have fallen below $9.00 per bushel – with Central Kansas Terminal cash bids in the range of
$8.47 ¾ ‐ $8.78 ¾ on Thursday, September 25th. “New crop” November 2014 soybean futures closed at $9.14
per bushel on Friday, September 26th, with “next year’s crop” November 2015 soybean futures closing at $9.36
½ on the same day.
Given that the USDA projections for “new crop” MY 2014/15 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 be
record high, there is no indication yet that any change is expected in these projected trends in the broader
World soybean market. The possibility of weather‐related 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, but until such
issues surface the soybean market will likely assume that these “predominant trends” will continue into the
foreseeable future.
I‐B. September 2014 USDA Reports
On September 11, 2014 the USDA National Agricultural Statistical Service (NASS) released its September
2014 Crop Production report containing state and national level U.S. soybean production estimates for 2014.
The September Crop Production report was based on farmer surveys and objective field plot measurement
information gathered during the August 25th through September 5th period. Approximately 12,000 producers
were interview during the survey period with inquiries made about probable soybean yield. The objective
yield surveys were conducted in major producing states accounting for 75 percent of U.S. soybean production
in recent years. From its objective yield field surveys, the USDA reported soybean pods with beans per 18
square feed in the report, and also calculated implied pod weight (i.e., grams per pod) in its effort to figure
soybean production at the state and national level.
On the same day the World Agricultural Outlook Board (WAOB) released its September 2014 World
Agricultural Supply and Demand Estimates (WASDE) report – containing U.S. and World soybean supply‐
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demand and price projections for both the “old crop” 2013/14 marketing year as well as for “new crop” MY
2014/15. The “old crop” 2013/14 marketing year ended on August 31, 2014, while the “new crop” 2014/15
U.S. wheat marketing year will last from September 1, 2014 through August 31, 2015. Information in the
upcoming September 30th USDA NASS Quarterly Stocks report will be used in calculating adjustments to “old
crop” MY 2013/14 U.S. soybean usage and ending stocks in the October 10th USDA WASDE report.
I‐C. Soybean Futures Trends Since the July 11th USDA Reports
“New crop” NOVEMBER 2014 soybean futures contract prices responded in a negative manner to the
information in the September 11th USDA reports (Figure 1). On the day of the report – Thursday, September
11th – Chicago Board of Trade (CBOT) NOVEMBER 2014 soybean futures prices opened at $9.92 /bu, and
traded as high as $9.95 and as low as $9.69 ½ during the session, before settling at $9.81 ½ – down $0.12 ¼ for
the day (Figure 1). Since then NOVEMBER 2014 soybean futures prices have traded within the range from a
high of $9.99 ¾ on September 16th, to a low of $9.09 ¾ on September 26th before closing at $9.10 ¾ that same
day. Prior to early‐mid May 2014, NOVEMBER 2014 soybean futures had trend sharply higher from a low of
$10.88 ¼ on January 31st to a high of $12.49 ¼ on April 28th, and then to a “higher high” of $12.79 on May 22nd.
Since then, prices have fallen $3.68 ¾ lower – closing at $9.10 ¼ on September 26th .
Figure 1. NOVEMBER 2014 CME Soybean Futures Price Charts (electronic trade) …
July 15, 2014
Grain Market Outlook
SEPT 2014 CME eCorn Futures
Nov. 13, 2013 – July 14, 2014
Close = $3.81 ½ on 7/14/2014
DEC 2014 CME eCorn Futures
Oct. 17, 2013 – June 17, 2014
Close = $3.88 ¼ on 7/14/2014
Page | 3
“New crop” DEC 2014 corn futures contract prices also responded in a negative manner to the
information in the July 11th USDA reports. On the day of the report, CBOT DEC 2014 corn futures prices
opened at $3.92 ½ per bushel, and traded as high as $3.94 ¾ and as low as $3.82 ½ during the session, before
settling at $3.84 ¾ – also down $0.08 for the day (Figure 1). On Monday, July 14th DEC 2014 corn futures
prices first opened trade lower at $3.83 ½, trading in a range from a low of $3.80 ¼ to a high of $3.89 ¼, before
closing at $3.88 ¼ ‐ up $0.03 ½ for the day. The low price of $3.80 ¼ was also a record historic low for the
DECEMBER 2014 corn futures contract.
I‐C. U.S. Corn Supply‐Demand
U.S. Corn Acreage, Yield & Production
Following the results of June 30th USDA NASS Acreage report, the USDA projected that 2014 U.S. corn
total planted acreage would be 91.641 million acres (ma), down 50,000 acres from the March 31st USDA NASS
Prospective Plantings Report, and down from 95.365 ma in 2013, 97.155 ma in 2012, and 91.936 ma in 2011
(Table 1 and Figure 2). In addition, the USDA projected 2014 U.S. corn harvested acreage to be 83.839 ma,
down from its June 11 WASDE report projection of 84.3 ma, and down from 87.668 ma in 2013, and 87.365
ma in 2012, but up from 81.446 ma in 2011. The 2014 proportion of harvested‐to‐planted acreage for all U.S.
corn is projected to be 91.49%, down from 91.9% in to 2013, but up from 89.9% in 2012 and 91.4% in 2011.
The projected 2014 U.S. average corn yield of 165.3 bushels per acre (bu/ac) is unchanged from the May‐
June WASDE reports, and would be a record high, up from 158.8 bu/ac in 2013, the drought affected 2012 low
yield of 123.4 bu/ac., and the historic high of 164.7 bu/ac in 2009 (Table 1 and Figure 3). Based on these 2014
acreage and yield forecasts, the USDA projected 2014 U.S. corn production to be 13.860 billion bushels (bb) –
which would be the second highest amount on record, following the record high of 13.925 bb in 2013, 10.780
bb in 2012, 12.360 bb in 2011, 12.447 in 2010, and 13.092 bb in 2009 (Table 1).
U.S. Corn Total Supplies
The USDA estimates that total supplies of U.S. corn for “new crop” MY 2014/15 are 15.136 bb – resulting
from beginning stocks of 1.246 bb, projected 2014 production of 13.860 bb, and projected imports of 30
million bushel (mb) (Table 1). Total supplies of 15.136 bb in “new crop” MY 2014/15 would be a record high,
comparable to 14.362 bb in MY 2007/08, 13.729 bb in MY 2008/09, 14.774 bb in MY 2009/10 (3rd largest),
14.182 bb in MY 2010/11 (4th largest), 13.517 bb in MY 2011/12, 11.932 bb in MY 2012/13, and 14.781 bb in
“current year” MY 2013/14 (2nd highest).
Beginning stocks of 1.246 bb in “new crop” MY 2014/15 are up 100 mb from the June WASDE report, and
up sharply from both 821 mb in “current year” MY 2013/14, and from 989 mb in MY 2012/13. This amount of
beginning stocks is up considerably from the low of 426 mb occurring in MY 1996/97. Imports of 30 mb in
“new crop” MY 2014/15 are the third highest on record, and are projected to be down from 35 mb in “current
year” MY 2013/14 (the 2nd highest), and also down sharply from the record high of 162 mb in MY 2012/13.
These amounts of U.S. corn imports are comparable to 29 mb in MY 2011/12, and 28 mb in MY 2010/11.
U.S. Corn Use by Category & Total Use
U.S. Ethanol Production and Corn Usage: Projected U.S. corn use for ethanol production of 5.050 bb in
“new crop” MY 2014/15 is down from to 5.075 bb in “current year” MY 2013/14 (up 25 mb from the June
Page | 4
WASDE report), while being up from 4.648 bb in MY 2012/13, and 5.000 bb in MY 2011/12 (Figure 4). Figure 5
shows weekly U.S. oxygenated plant production of fuel ethanol as reported by the U.S. Energy Information
Administration (www.eia.gov) with a calculated estimate of corn use developed by Kansas State University.
Assuming 2.75 gallons of ethanol produced per bushel of corn, these calculations indicate that the equivalent
projected annual rate of U.S. corn used for ethanol production for “current” MY 2013/14 has ranged from
4.638‐5.418 bb on a weekly basis since early September 2013 ‐ the beginning of the “current” 2013/14
marketing year.
Over the period of from September 1, 2013 through July 4, 2014, corn usage for ethanol production has
been on pace to reach 5.050 bb in “current” MY 2013/14, with the period of July 6th through August 31st
through the end of the current marketing year yet to occur. This estimate of 5.050 bb is less than the USDA’s
July 2014 WASDE report estimate of 5.075 bb of corn to be used for ethanol production during “current” MY
2013/14 (which had been raised 25 mb in the July WASDE report).
U.S. Corn Use as Distillers Grains: An estimate of the U.S. corn equivalent amounts of distillers grains
(DDGS) use for direct livestock feeding and exports is provided in Figure 6 – which shows estimated a) DDGS
corn equivalent U.S. domestic livestock feeding, and b) DDGS exports as well as other categories of U.S. corn
usage since MY 1989/90.
This analysis assumes 16.00 pounds of distillers dried grains and solubles (DDGS) per 56 pound bushel of
corn used in ethanol production – following from recent ethanol industry surveys. By these estimates since
MY 2010/11, approximately 1.051‐1.147 bb of U.S. corn equivalent bushel‐weights of DDGS are projected
either to have already been or are to be fed to U.S. livestock during each marketing year– i.e., 1.108 bb in
DDGS corn‐weight equivalents in MY 2010/11, 1.130 bb in MY 2011/12, 1.051 bb in MY 2012/13, 1.147 bb
projected for “current” MY 2013/14, and 1.142 bb in “new crop” MY 2014/15. Over the same five most recent
marketing years, DDGS exports in corn equivalent weights are estimated to range from 277 to 306 mb, with
approximately 301 bb of DDGS‐corn equivalents projected for the “new crop” MY 2014/15 U.S. corn marketing
year.
U.S. Corn Exports: Projected U.S. corn exports of 1.700 in “new crop” MY 2014/15 are down from the
estimate of 1.900 bb in “current year” MY 2013/14, but up sharply from 731 mb in MY 2012/13 – the 40 year
low since MY 1975/76 (Figure 4). According the USDA Foreign Agricultural Service (FAS) weekly export data,
ss of July 3rd, with 44 of 52 weeks (84.6%) of “current” MY 2013/14 complete, 1.542 bb of U.S. corn had been
shipped for export – equal to 81.2% of the USDA’s updated projection for “current” MY 2013/14 of 1.900 bb.
An additional 330 mb of U.S. corn had been sold for future export sales in the “current” 2013/14 marketing
year – prior to August 31, 2014 (the end of “current” MY 2013/14).
Adding together 1.542 bb in past shipments plus 330 mb in forward sales amounts to 1.872 bb, or 98.6% of
the USDA’s 1.900 bb U.S. corn export target for “current” MY 2013/14 in the July 11th USDA WASDE report
with 84.6% (44/52 weeks) of the marketing year completed. The strong pace of combined shipments and
sales motivated the USDA to increase its U.S. corn export projection by 150 mb from 1.750 bb to 1.900 bb back
in the May 9th WASDE report.
In addition, 168 mb of U.S. corn export sales have been reported for the “new crop” 2014/15 marketing
year – beginning September 1, 2014. This amount would equal 9.9% of the USDA’s projection of 1.700 bb for
“new crop” MY 2014/15 before the marketing year has began.
Page | 5
Non‐Ethanol FSI: Forecast non‐ethanol food, seed and industrial (FSI) use of 1.385 bb in “new crop” MY
2014/15 is equal to 1.385 bb in “current year” MY 2013/14, and compares to 1.405 bb in “last year’s” MY
2012/13, and 1.428 bb in MY 2011/12 (Figure 4).
Feed and Residual Use: Forecast U.S. feed and residual use of 5.200 bb in “new crop” MY 2014/15 is down
50 mb from the June WASDE report, while being up from 5.175 bb for “current” MY 2013/14 and up from
4.326 bb in MY 2012/13. The estimate for “current” MY 2013/14 was lowered 125 mb from the June WASDE
number. These levels of corn use for livestock feeding are somewhat correlated with the amounts of energy
feeds per grain consuming animal units reported by the USDA over the same time period (Figure 4).
Last month’s June Feed Outlook Report (http://www.ers.usda.gov/publications/fds‐feed‐outlook/fds‐
14e.aspx) the USDA Economic Research Service (ERS) in …
December 22, 2015
Grain Market Outlook
8.
There are ongoing concerns in the World wheat market about a) potential wheat production problems and
supply prospects in the Black Sea region and elsewhere), b) foreign geopolitical changes and conflicts, and c)
spillover impacts from volatile World economic, financial and currency markets. Even so, the “large crop‐over
supply” situation currently existing in World & U.S. wheat markets continues to have a strong negative
influence on World wheat prices. For wheat prices are to recover significantly before summer‐2016 it is likely
that significant World wheat production problems and/or trade disruptions would need to occur. Ongoing
strength in the U.S. dollar exchange rate is a serious negative factor that is limiting U.S. wheat exports, raising
U.S. wheat ending stocks, and causing sharply lower U.S. wheat prices.
USDA U.S. Wheat Forecast for “New Crop” MY 2015/16: The USDA made no adjustments in its supply‐
demand forecasts for U.S. wheat in the “new crop” 2015/16 marketing year – with 2.052 billion bushels (bb)
production, 2.930 bb total supplies, 800 million bushels (mb) of exports, 2.019 bb of total use, 911 mb ending
stocks, and 45.1% ending‐stocks‐to‐use (up to the highest level since 48.6% in MY 2009/10). A price range of
$4.80‐$5.20 /bu was forecast with a midpoint of $5.00 /bu –the lowest level since $4.87 /bu in MY 2009/10.
KSU U.S. Wheat Forecast for “new crop” MY 2015/16: Two possible domestic wheat market scenarios are
forecast by Kansas State University for “new crop” MY 2015/16: 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 to 750 mb exports, with 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 again equal to the USDA’s, but with higher U.S.
wheat exports, i.e., 900 mb exports, with 811 mb ending stocks, 38.3% S/U, and $5.85 /bu U.S. average price.
USDA U.S. Wheat Forecast for “Next Crop” MY 2016/17: In their Agricultural Projections to 2025 the USDA
provided a forecast of U.S. wheat market outlook for the “next crop” 2016/17 marketing year beginning June
1, 2016. The USDA projected 2016 U.S. wheat plantings of 53.0 million acres (ma) – down 1.644 ma from
2015. Forecast 2016 harvested acres of 44.9 ma would be down 2.194 ma vs 2015. With projected yields of
45.9 bu/ac (up from 43.6 bu/ac in 2015), 2016 U.S. wheat production is projected to be 2.060 bb (up
marginally vs 2015), with 2016/17 total supplies equaling 3.096 bb (up from 2.930 bb in “new crop” MY
2015/16). With forecast “next crop” MY 2016/17 total use of 2.198 bb, and ending stocks of 928 mb (42.8%
S/U), U.S. wheat prices are projected to be $4.40 /bu – down from $5.00 /bu in “new crop” MY 2015/16.
Page | 2
I. U.S. Wheat Market Situation & Outlook
I‐A. December 2015 USDA WASDE Report
On December 9th the USDA World Agricultural Outlook Board (WAOB) released its December 2015 World
Agricultural Supply and Demand Estimates (WASDE) report – containing U.S. and World wheat supply‐
demand and price projections for the 2013/14, “old crop” 2014/15, as well as the “new crop” 2015/16
marketing years. The “new crop” 2015/16 marketing year for U.S. wheat began on 6/1/2015 and will last
through 5/31/2016.
I‐B. CME Kansas Hard Red Winter Wheat MARCH & JULY 2016 Futures
Since a market high of $6.40 ¼ per bushel for the Chicago Mercantile Exchange (CME) MARCH 2016
Kansas hard red winter wheat futures contract on June 30, 2015, MARCH 2016 futures have trended sharply
lower (Figure 1). The slow pace of U.S. wheat exports (caused by record large World wheat supply 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 “current crop” CME MARCH 2016 Kansas HRW wheat futures prices.
Figure 1. MARCH & JULY 2016 CME Kansas Wheat Futures Price Charts …
October 29, 2015
Grain Market Outlook
ential wheat production
problems and supply prospects in India, Russia, Ukraine, and elsewhere, b) ongoing geopolitical problems in
the Black Sea region and Middle East, and c) uncertainty in World economic, financial and currency markets.
Even so, the “large crop‐over supply” situation existing in World & U.S. wheat markets continues to negatively
influence price prospects. For wheat prices to recover in late 2015‐2016 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 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 (down 1.435
ma), 47.094 ma harvested (down 1.360 ma), 43.6 bu/ac yields (down 0.5 bu), and 2.052 billion bushels (bb)
production / 2.930 bb total supplies (both down 84 million bushels or ‘mb’). The USDA also forecast 180 mb
feed & residual use (down 20 mb), 850 mb of exports (down 50 mb), 2.069 mb of total use (down 70 mb), 861
mb ending stocks (up 14 mb), and 41.6% ending‐stocks‐to‐use (up from 40.9% in September, 39.3% in August
and 38.5% in July, up to the highest level since 48.6% in MY 2009/08). The USDA adjusted its U.S. average
wheat price forecast for “new crop” MY 2015/16 to the range of $4.75‐$5.25 /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: 70%
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., 825 mb exports, 886 mb ending stocks, 43.35% S/U, and $4.85 /bu U.S. average price, and
B) “Higher Exports” Scenario: 30% prob. of supply prospects equal to the USDA’s but with higher U.S. wheat
exports, i.e., 1.000 bb exports, 711 mb ending stocks, 32.0% 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 – driving wheat prices lower. Record World total wheat supplies of
944.9 mmt in “new crop” MY 2015/16 are up from the previous record of 919.3 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 high World wheat ending stocks in “new crop” MY 2015/16 of 228.5 mmt (31.9%
S/U – 14 year high) are up from 212.1 mmt (30.0% S/U) in “old crop” MY 2014/15, and up from 193.8 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. October 9th USDA Reports & “New Crop” MY 2015/16 Projections
On October 9th the USDA World Agricultural Outlook Board (WAOB) released its October 2015 World
Agricultural Supply and Demand Estimates (WASDE) report – containing U.S. and World wheat supply‐
demand and price projections for the 2013/14, “old crop” 2014/15, as well as the “new crop” 2015/16
marketing years. The “new crop” 2015/16 marketing year for U.S. wheat began on June 1, 2015 and will last
through May 31, 2016.
The October 9th USDA reports follow the release on September 30th of the USDA National Agricultural
Statistical Service (NASS) 2015 Small Grains Summary and Grain Stocks reports, both of which were relevant
to U.S. wheat supply‐demand estimates and market expectations for U.S. wheat prices. Of particular
importance in the Small Grains Summary report was the final estimate of 2015 U.S. wheat acreage, yield, and
production – both for U.S. wheat production overall and for analysis of supply‐demand conditions on a class‐
by‐class basis.
I‐B. CME Kansas Hard Red Winter Wheat DEC 2015 & JULY 2016 Futures
Since market highs of $6.28 ¾ per bushel for the CME DECEMBER 2015 Kansas hard red winter wheat
futures contract that occurred on June 30, 2015, December futures have trended sharply lower – down to a
low of $4.65 ¾ on September 4, 2015 (Figure 1). Following a recovery up to $5.21 on October 7th, DEC 2015
Kansas wheat futures declined again to $4.70 ½ on October 20th and $4.69 ½ on October 23rd before again
trending moderately higher. 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 DECEMBER 2015 Kansas HRW wheat futures prices.
Figure 1. DECEMBER 2015 & JULY 2016 CME Kansas Wheat Futures Price Charts …
September 1, 2015
Grain Market Outlook
ralia, India, Russia, and elsewhere in “new crop” MY 2015/16, b) the
ongoing geopolitical problems in the Black Sea region and the potential for conflict in the Middle East, and c)
uncertainty in World economic, financial and currency markets. However, the overriding “large crop‐over‐
supply” situation that now exists in World & U.S. wheat markets continues to negatively influence wheat
futures and cash prices. Recovery in wheat market prices may dependent on whether significant problems in
wheat production and/or trade occur in major World wheat producing and exporting areas in year 2015 and
beyond, and for the U.S. how long the strong value of the U.S. dollar relative to other currencies continues.
USDA U.S. Wheat Supply‐Demand & Price Forecast: For U.S. wheat in the “new crop” 2015/16 marketing
year, the USDA projected that there would be 55.079 million acres (ma) planted, 48.454 ma harvested, 44.1
bu/ac yields (down 0.2 bu), 2.136 billion bushels (bb) production (down 12 mb), 3.014 bb total supplies (down
17 mb), 925 million bushel (mb) exports (down 25 mb), 200 mb feed & residual use, 2.164 bb total use (down
25 mb), 850 mb end stocks (up 8 mb), with 39.3% ending‐stocks‐to‐use (up from 38.5% in July, and up to the
highest level since 48.6% in MY 2009/08). The USDA projected U.S. average wheat prices for “new crop” MY
2015/16 in the range of $4.65‐$5.55 /bu. (midpoint =$5.10) – the lowest since $4.87 /bu in MY 2009/10.
KSU U.S. Wheat Supply‐Demand & Price Forecast: Key market factors to consider are the level of 2015 U.S.
hard red spring wheat production, and prospects for improved U.S. wheat exports. Kansas State University
projections of “new crop” MY 2015/16 supply‐demand balances and prices are represented in two scenarios:
A) “Lower Exports” Scenario: 65% prob. of the same U.S. wheat production estimates as the USDA, but with
U.S. exports dropping to “old crop” 2014/15 levels, i.e., 3.014 bb total supplies, 850 mb exports, 2.089 bb total
use, 925 mb ending stocks, 44.3% S/U, and $4.75 /bu U.S. avg. price. B) “Higher Exports” Scenario: 35% prob.
of production prospects equal to the USDA’s but with higher U.S. wheat exports, i.e., 3.014 bb total supplies,
1.000 bb exports, 2.224 bb total use, 790 mb ending stocks, 35.2% S/U, and $5.75 /bu U.S. average price.
USDA World Wheat: The expectation fo large World wheat supplies and stocks are a “burden” on World
wheat markets – driving them toward lower World wheat market prices. Record World total wheat supplies of
936.2 mmt in “new crop” MY 2015/16 are up from 918.6 mmt in “old crop” MY 2014/15, and from 892.1 mmt
in MY 2013/14. Projected World wheat ending stocks in “new crop” MY 2015/16 of 221.5 mmt (31.0% S/U)
are also record high, and up from 209.7 mmt (29.6% S/U) in “old crop” MY 2014/15, and from 193.4 mmt
(27.7% S/U) in MY 2013/14. For perspective, these recent supply‐demand figures can be compared to the
historic World wheat ending stocks and stocks‐to‐use minimums of 128.8 mmt and 21.0% S/U in MY 2007/08.
Page | 2
I. U.S. Wheat Market Situation & Outlook
I‐A. August 12th USDA Reports & “New Crop” MY 2015/16 Projections
On August 12th the USDA National Agricultural Statistics Service (NASS) in its Crop Production report with
its’ projections of 2015 U.S. wheat production as of August 1, 2015. Wheat production forecasts in the August
12th Crop Production report were based on actual farm operator surveys and objective yield field trials
conducted between July 25th and August 6th by USDA NASS – representing crop conditions and expected yield
and production prospects as of August 1, 2015.
On the same day the USDA World Agricultural Outlook Board (WAOB) released its August 2015 World
Agricultural Supply and Demand Estimates (WASDE) report – containing U.S. and World wheat supply‐
demand and price projections for the 2013/14, “old crop” 2014/15, as well as the “new crop” 2015/16
marketing years. The “new crop” 2015/16 marketing year for U.S. corn began on June 1, 2015 and will last
through May 31, 2016.
I‐B. CME KC Hard Red Winter Wheat Futures & U.S. Dollar Index Trends
Since market highs of $6.28 ¾ per bushel for the CME DECEMBER 2015 Kansas hard red winter wheat
futures contract occurred on June 30, 2015, December futures have trended sharply lower – down to a low of
$4.78 ¼ on August 31, 2015 (Figure 1). The slow pace of U.S. wheat exports caused by record large World
wheat production prospects in “new crop” MY 2015/16 and the historically high value of the U.S. dollar have
been key factors causing the recent sharp decline in CME DECEMBER 2015 Kansas HRW wheat prices.
Figure 1. DECEMBER 2015 & JULY 2016 CME Kansas Wheat Futures Price Charts …
September 1, 2015
Grain Market Outlook
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Page | 4
I‐C. U.S. Corn Supply‐Demand
U.S. Corn Acreage, Yield & Production
The USDA’s projections of 2015 U.S. corn planted acres from the March 31st Prospective Plantings report
were adjusted downward in the USDA June 30th Acreage report, and have since been used without adjustment
in the July 10th and August 12th USDA Crop Production and WASDE reports. In the June 30, 2015 USDA
Acreage report and subsequent July and August Crop Production reports the USDA projected that 2015 U.S.
corn total planted acreage would be 88.897 million acres (ma), down 302,000 acres from 89.199 ma projected
earlier in the March 31st USDA Prospective Plantings report. This projection of 88.897 ma of 2015 U.S. corn
planted is down 1.700 ma (‐1.9%) from 90.597 ma in 2014, down 6.468 ma (‐6.8%) from 95.365 ma in 2013,
down 8.394 ma (‐8.6%) from the record high of 97.291 ma in 2012, and also down from 91.921 ma in 2011
(Table 1 and Figure 3).
The USDA projected that 2015 U.S. corn harvested acreage would be 81.101 million acres (ma), down
2.035 ma (‐2.4%) from 83.136 ma in 2014, down 6.350 ma (‐7.3%) from the record high of 87.451 ma in 2013,
down 6.534 ma (‐7.2%) from 87.365 ma in 2012, and down from 83.981 ma in 2011 (Table 1 and Figure 3).
The USDA implicitly projected that the proportion of harvested‐to‐planted acreage in 2015 is 91.2%, down
from 91.8% in 2014, and from 91.7% in 2013, but up from 89.9% in drought‐stricken 2012.
The USDA forecast 2015 U.S. average corn yields to be 168.8 bushels per acre (bu/ac) – up 2.0 bu/ac from
the USDA’s July projection, but still less than the record high of 171.0 bu/ac in 2014 (Table 1 and Figure 4).
Although this August 2015 USDA projection of 2015 U.S. corn yields of 168.8 bu/ac is down from the record
171.0 bu/ac in 2014, it would still be the second highest U.S. corn yield to date, being up from 158.1 bu/ac in
2013, the drought affected 2012 low yield of 123.1 bu/ac., 147.2 bu/ac in 2011, 152.8 bu/ac in 2010, and still
up from the previous historic record high of 164.7 bu/ac in 2009.
Based on this combination of USDA projections for 2015 planted acreage (88.897 ma), harvested acreage
(81.101 ma), and yield (168.8 ma – USDA), projected 2015 U.S. corn production would be 13.686 billion
bushels (bb) – up 156 million bushels (mb) from the USDA’s July projections, but down from the record high of
14.216 bb in 2014, and the previous record high of 13.829 bb in 2013. However, this projection of 13.686 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 15.488 bb – up 154
million bushels (mb) from the July 10th WASDE report. This projection of 15.488 bb for “new crop” MY
2015/16 results from beginning stocks of 1.772 bb, projected 2015 production of 13.686 bb, and projected
imports of 30 million bushel (mb) (Table 1 and Figure 5). Since the beginning of the expansion in U.S. ethanol
production in 2006‐2007, total supplies of U.S. corn have been 14.362 bb in MY 2007/08, 13.729 bb in MY
2008/09, 14.749 bb in MY 2009/10, 14.161 bb in MY 2010/11, 13.471 bb in MY 2011/12, 11.904 bb in “short
crop” MY 2012/13, 14.686 bb in MY 2013/14, the estimated 2nd highest amount on record of 15.477 bb in “old
crop” MY 2014/15, and the forecast record high of 15.488 bb in “new crop” MY 2015/16.
The USDA forecast of beginning stocks of 1.772 bb in “new crop” MY 2015/16 is down 7 mb from the July
10th 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 moderately from
Page | 5
1.708 bb in MY 2010/11, 1.673 bb in MY 2009/10, and 1.624 bb in MY 2008/09. This amount of beginning
stocks in “new crop” MY 2015/16 of 1.772 bb is up considerably from the low of 426 mb that occurred in MY
1996/97, and is the highest amount since 1.967 bb in MY 2006/07 and 2.114 bb in MY 2005/06 (Table 1 and
Figure 5).
Projected imports of 30 mb in “new crop” MY 2015/16 are up 5 mb from July, equal to 30 mb in “old crop”
MY 2014/15, down from 36 mb in MY 2013/14 (the 2nd highest on record), and are down sharply from the
record high of 160 mb in the drought‐stressed 2012/13 marketing year. These amounts of U.S. corn imports
are comparable to 29 mb in MY 2011/12, and 28 mb in MY 2010/11, but up from 8 mb in MY 2009/10.
U.S. Corn Use by Category & Total Use
U.S. Ethanol Production and Corn Usage: Projected U.S. corn use for ethanol production of 5.250 bb in
“new crop” MY 2015/16 (up 25 mb from June and up 50 mb from July) is up from 5.200 bb in “old crop” MY
2014/15, 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 “old crop” MY 2014/15 has ranged from 4.830‐5.449 bb on a
weekly basis since early September 2014 ‐ the beginning of the “old crop” 2014/15 marketing year. Over the
period of September 1, 2014 through August 21, 2015, corn usage for ethanol production was been on pace to
reach 5.214 bb in “old crop” MY 2014/15. This estimate of 5.214 bb is marginally larger than the USDA’s
August 12, 2015 WASDE report estimate of 5.200 bb of corn to be used for ethanol production during “old
crop” MY 2014/15, with 50.5 of 52 weeks (97.1%) 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 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 0.995‐1.130 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, 0.995 bbeqwt in MY 2013/14, 1.008 bbeqwt in both “old crop” MY 2014/15, and 1.017 bbeqwt in “new
crop” MY 2015/16.
Over the five most recent marketing years, DDGS exports in million bushels of corn equivalent weights
(mbeqwt) are estimated to range from 299 to 483 mb, – i.e., 326 mbeqwt in DDGS corn‐weight equivalents in MY
2010/11, 299 mbeqwt in MY 2011/12, 322 mbeqwt in MY 2012/13, 472 mbeqwt in MY 2013/14, a near record 478
mbeqwt in “old crop” MY 2014/15, and a projected record high 483 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 (down 25 mb from
July) is unchanged from 1.850 bb in “old crop” MY 2014/15, less than 1.920 bb in MY 2013/14, and up sharply
from 730 mb in MY 2013/14 – the 41 year low (i.e., since MY 1975/76) (Table 1, Figures 6 and 8).
Page | 6
According to USDA Foreign Agricultural Service (FAS) weekly export data (http://apps.fas.usda.gov/export‐
sales/esrd1.html), as of August 20th, through the 50th week of “old crop” MY 2014/15 (50 of 52 weeks), 1,737.2 bb
of U.S. corn had been physically shipped for export – equal to 93.6% of the USDA’s projection of 1.850 bb for
“Old Crop crop” MY 2014/15. An additional 125 mb of U.S. corn had been pre‐sold for future export shipments
during the remainder of “old crop” 2014/15 marketing year – prior to August 31, 2015 (the end of “Old Crop
crop” MY 2014/15).
Adding together 1,737.2 mb in past shipments plus 125 mb in forward sales amounts to 1.862 bb, or
100.7% of the USDA’s 1.850 bb U.S. corn export target for “old crop” MY 2014/15 in the August 12th USDA
WASDE report with 97.1% (50.5/52 weeks) of the marketing year completed. United States’ corn export
shipments will need to average 75.2 mb per week for the remaining 1.5 weeks of the “old crop” 2014/15
marketing year to achieve the USDA’s 1.850 bb projection. This compares to 32.3 mb of export shipments for
the week ending August 20th – i.e., being behind of the pace needed to meet the USDA’s most recent export
projection.
It is likely that a number of these remaining “old crop” MY 2014/15 U.S. corn export sales will be cancelled
and “rolled over” into the “new crop” 2015/16 marketing year beginning on September 1, 2015. It is also likely
that the USDA will reduce its estimate of “old crop” 2014/15 corn exports in the upcoming September 11th
USDA WASDE report – an adjustment by itself that would also bring about an increase in U.S. corn ending
stocks in “old crop” MY 2015/16.
Non‐Ethanol FSI: Forecast non‐ethanol food, seed and industrial (FSI) use of 1.375 bb in “new crop” MY
2015/16 is up 15 mb from July, and greater than 1.355 bb in “old crop” MY 2014/15 (up 1 mb from July), 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 (up 25
mb from July) is unchanged from 5.300 bb for “old crop” MY 2014/15, but up from 5.030 bb in MY 2013/14,
4.315 bb in MY 2012/13, and 4.519 bb in MY 2011/12 (Table 1, Figures 6 and 8). These levels of corn use for
livestock feeding are somewhat correlated with the amounts of energy feeds per grain consuming animal units
(GCAUs) reported by the USDA over the same time period as illustrated in the following information.
In the USDA August 14th Feed Outlook Report (http://usda.mannlib.cornell.edu/usda/Old Crop/FDS/FDS‐08‐14‐2015.pdf) and
other online resources the USDA Economic Research Service (ERS) indicates that over the MY 2012/13
through “new crop” MY 2015/16 time period, the total amount of Energy Feeds in the U.S. – including corn,
sorghum, barley, oats and wheat – is estimated to be or have been 125.7 million metric tons (mmt) in MY
2012/13 (87.2% corn), 134.3 mmt in MY 2013/14 (95.2% corn), and 144.5 mmt in “old crop” MY 2014/15
(93.1% corn), and 144.5 mmt in “new crop” MY 2015/16 (93.1% corn). Over this same 3 year period, total U.S.
Grain Consuming Animal Units (GCAUs) are estimated to be or have been 92.3 million in MY 2012/13, 91.0
million in MY 2013/14, 93.2 million in “old crop” MY 2014/15, and 95.2 million in “new crop” MY 2015/16.
As a result, U.S. Energy Feeds per Grain Consuming Animal Unit is estimated to be or have been 1.362
metric tons per animal unit (mt/au) in MY 2012/13, 1.477 mt/au in MY 2013/14, and 1.551 mt/au in “old crop”
MY 2014/15, and is projected to be 1.517 mt/au in “new crop” MY 2015/16. As the availability of feed grain
and other energy feeds has increased or is expected to increase from the drought stricken “short crop” year of
MY 2012/13 to the successive record “large crop” years of MY 2013/14, “old crop” MY 2014/15, and now into
the expected third consecutive large crop year in “new crop” MY 2015/16 for corn and other aggregated
feedgrains, the amount of energy feeds 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.
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Total Use of U.S. Corn for “new crop” MY 2015/16 is projected to be a record high 13.775 bb (up 40 mb
from July) – up from the previous record high of 13.706 bb in “old crop” MY 2014/15 (up 9 mb from July)
(Table 1 and Figures 6 and 8). United States’ total corn use has varied widely in recent marketing years – due
largely to changes in available U.S. corn supplies. Corn use in the U.S. over time has changed from 12.737 bb in
MY 2007/08, to 12.008 bb in MY 2008/09, 13.041 bb in MY 2009/10, 13.033 bb in MY 2010/11, 12.482 bb in
MY 2011/12, 11.083 bb in MY 2012/13, the one time record high of 13.454 bb in MY 2013/14, the previous
record high amount of 13.705 bb in “old crop” MY 2014/15, and now the new projected record high of 13.775
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 1.713 bb (up 114 mb from July),
which is down 59 mb from 1.772 bb in “old crop” MY 2014/15 (also down 9 mb from July) (Table 1 & Figure 9).
Since MY 2006/07 (1.304 bb), U.S. corn ending stocks have been 1.624 bb in MY 2007/08, 1.673 bb in MY
2008/09, 1.708 bb in MY 2009/10, 1.128 bb in MY 2010/11, 989 mb in MY 2011/12, 821 mb in “drought
stricken” MY 2012/13, 1.232 bb in MY 2013/14, and 1.772 bb in “old crop” MY 2014/15, and now are forecast
to be 1.713 bb in “new crop” MY 2015/16.
Projected percent (%) ending stocks‐to‐use of 12.44% in “new crop” MY 2015/16 is up from 11.64% in the
July WASDE report, and down from 12.93% in “old crop” MY 2014/15 (Table 1 and Figures 9 and 10). On a
year‐by‐year basis, U.S. corn % ending stocks‐to‐use trended downward from 12.75% in MY 2007/08 and
13.94% in MY 2008/09, to 13.10% in MY 2009/10, 8.65% in MY 2010/11, 7.92% in MY 2011/12, and then down
to 7.41% in “drought stricken” MY 2012/13. Then U.S. corn ending stocks‐to‐use increased for the first time in
six (6) years to 9.16% in MY 2013/14, and then increased again to 12.93% in “old crop” MY 2014/15 – with a
projected decline to 12.44% 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 $3.35‐$3.95 bu/ac
(midpoint = $3.65) – down marginally from a projection of $3.45‐$4.05 ($3.70 midpoint) by the USDA in last
month’s July 10th WASDE report (Table 1 and Figures 9 and 10). Since the beginning of the rapid expansion in
U.S. ethanol production in 2006, U.S. corn prices have moved from $3.04 /bu in MY 2006/07, to $4.20 in MY
2007/08, $4.06 in MY 2008/09, $3.55 in MY 2009/10, $5.18 in MY 2010/11, $6.22 in MY 2011/12, and then up
to the record high of $6.89 in “drought stricken” MY 2012/13. However, if the August 12th WASDE projection
holds true, prices will now have declined year‐by‐year since the $6.89 record high in MY 2012/13, down to
$4.46 in MY 2013/14, $3.65‐$3.75 (midpoint = $3.70) in “old crop” MY 2014/15, and now to a projected range
of $3.35‐$3.95 (midpoint = $3.65) 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” MY 2015/16 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 2015 U.S. corn planted acreage with a 101 ma reduction from
the USDA’s forecast of 2015 U.S. harvested acres, and with a 2015 U.S. corn yield of 167.5 bu/ac and 13.568 bb
of 2015 U.S. corn production – and is given a 40% probability of occurring in 2015. The second scenario is
based on the same U.S. corn acreage estimates as in the first scenario, but with a lower U.S. corn yield of 165.0
bu/ac and 13.356 bb of 2015 U.S. corn production – and is given a 50% probability of occurring in 2015. The
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third scenario is based on the same USDA planted acreage projections as the first two scenarios, but with a
more pronounced short crop “low yield” of 155.0 bu/ac and 12.555 bb of 2015 U.S. corn production – and is
given a 10% probability of occurring in 2015.
KSU Scenario #1 – A “Normal Crop” of 13.568 bb with 40% Likelihood of Occurring
For “new crop” MY 2015/16, this “normal crop” yield KSU projection reflects the likelihood of a reduction
in U.S. corn harvested acreage in 2015 (down approximately 100 ma from current USDA projections), and how
U.S. corn yields that are marginaly lower than USDA’s most recent August 12th NASS Crop Production report
projection would impact 2015 U.S. corn production, supply‐demand balances and prices in the coming “new
crop” 2015/16 marketing year, i.e., September 1, 2015 through August 31, 2016. This scenario is thought to
have approximately a 40% probability of occurring (i.e., 4 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 and
the August 12th Crop Production report forecast), with 2015 U.S. corn harvested acreage down 2.136 ma to
81.000 ma (down 101 ma from the USDA’s August 12th Crop Production report projection) (Table 1 and Figure
3). Forecast 2015 U.S. corn yields of 167.5 bu/ac in this scenario are down from the USDA’s August 12th
forecast of 168.8 bu/ac, but still would be the second highest on record, and 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 13.568 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 13.775 – equal to the USDA’s August 12th projection 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 1.595 bb, and for %
ending stocks‐to‐use of 11.58% 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” U.S. corn supply‐demand and price scenario for “new crop” MY
2015/16 – given a 40% probability of occurring (4 out of 10 odds).
1st KSU Scenario for “New Crop” MY 2015/16 U.S. Corn Supply/Demand & Prices
Estimated Probability of Occurring = 40% …