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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
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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
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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
Page | 7
I‐D. KSU U.S. Corn Supply‐Demand Scenarios for “New Crop” MY 2014/15
Kansas State University forecasts of U.S. corn supply‐demand balances for “new crop” in the 2014/15
marketing year are provided below. Given the market information available in September 2014, the
conservative price projections that fo …
December 24, 2014
Grain Market Outlook
2015 CME eCorn Futures
April 24 – December 22, 2014
Close = $4.11 ¾ on 12/22/2014
Page | 4
projection of 2014 U.S. grain sorghum harvested acreage of 6.174 ma – down from 6.530 ma in 2013, but up
from 4.995 ma in 2012, and 3.942 ma in 2011. The 2014 proportion of harvested‐to‐planted acreage for all
U.S. grain sorghum is projected to be 85.6%, up from 81.0% in to 2013, 79.8% in 2012, and 72.4% in 2011.
The projected 2014 U.S. average grain sorghum yield of 66.1 bushels per acre (bu/ac) is unchanged from
November, and is up from 59.6 bu/ac in 2013, the drought affected 2012 low yield of 49.6 bu/ac., and 54.0
bu/ac in 2011, but is less than 71.9 bu/ac in 2010 and 69.4 bu/ac in 2009 (Table 1 and Figure 2).
Based on these 2014 acreage and yield forecasts, the USDA projected 2014 U.S. grain sorghum production
to be 408 million bushels (mb) – which is comparable to 389 mb in 2013, 248 mb in 2012, 213 mb in 2011, 345
mb in 2010, 382 mb in 2009, and 476 mb in 2008 (Table 1).
U.S. Grain Sorghum Total Supplies
The USDA estimates that total supplies of U.S. grain sorghum for “current crop” MY 2014/15 are 442 mb –
resulting from beginning stocks of 34 mb, projected 2014 production of 408 mb, and no projected imports
(Table 1). Total supplies of 442 mb in “current crop” MY 2014/15 compare to 529 mb in MY 2008/09, 436 mb
in MY 2009/10, 387 mb in MY 2010/11, 241 mb in MY 2011/12, 280 mb in MY 2012/13, and 404 mb in MY
2013/14.
Beginning stocks of 19 mb in “current crop” MY 2014/15 are up from 15 mb in “current year” MY 2013/14,
and are less than the range of 23‐55 mb occurring during the MY 2008/09 – MY 2012/13 period.
U.S. Grain Sorghum Use by Category & Total Use
U.S. Food, Seed and Industrial Usage (FSI): Projected U.S. grain sorghum use for food, seed, and industrial
usage of 80 mb in “current crop” MY 2014/15 is a record high, and comparable to 70 mb in MY 2013/14, 95 mb
in MY 2012/13, 85 mb in MY 2011/12 and MY 2010/12, and 90‐95 mb in MY 2010/11 and MY 2009/10 (Table 1
and Figure 3). This category includes grain sorghum used for ethanol production under the designation of
“Industrial”.
According Renewable Fuels Association data (http://www.ethanolrfa.org/bio‐refinery‐locations/), as of
December 11, 2014 and based on knowledge of how some of the local Kansas ethanol plants are functioning,
there were 7 operational ethanol plants in the U.S. that used grain sorghum either alone or grain sorghum in
combination with corn as a feedstock. These ethanol plants had an operational capacity totaling 295 million
gallons of ethanol per year. At a conversion rate of 2.75 gallons of ethanol per bushel of grain sorghum, this
would amount to an annual maximum use of grain sorghum of 107 mb, markedly larger than the USDA’s
projection of 80 mb for FSI use. Not all ethanol plants that can use grain sorghum as a feedstock are doing so
at this time at a 100% grain sorghum rate. Also, the total amount of FSI usage doesn’t represent only ethanol
production, as food and seed uses are also represented in this measure.
U.S. Grain Sorghum Exports: Projected U.S. grain exports of 230 mb in “current crop” MY 2014/15 are up
from the estimate of 212 mb in MY 2013/14, and up sharply from 76 mb in MY 2012/13, and from the 40 year
low since MY 1975/76 of 63 mb in MY 2011/12 (Table 1 and Figure 3). As of December 11th, with 15 of 52
weeks (28.9%) of “current crop” MY 2014/15 complete, 81.8 mb of U.S. grain sorghum had been shipped for
export – equal to 35.6% of the USDA’s updated projection for “current crop” MY 2014/15 of 230 mb
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(http://apps.fas.usda.gov/export‐sales/esrd1.html ). An additional 118.3 mb of U.S. grain sorghum had been
sold for future export sales in “current crop” MY 2014/15 – to be shipped prior to August 31, 2015 (the end of
“current crop” MY 2014/15).
Adding together 81.8 mb in past shipments plus 118.3 mb in forward sales amounts to 200.1 mb, or 87.0%
of the USDA’s 230 mb U.S. grain sorghum export target for “current crop” MY 2014/15 in the December 10th
USDA WASDE report with 28.9% (15/52 weeks) of the marketing year completed. United States’ grain
sorghum export shipments need to average 4.01 mb per week to meet the USDA’s projection of 230 mb in
“current crop” MY 2014/15. Actual U.S. grain sorghum export shipments of 4.7 mb and 9.8 mb in the weeks
ending December 4th and December 11th were ahead of pace to meet the USDA’s projection of 230 mb for
“current crop” MY 2014/15.
Feed and Residual Use: The USDA forecast U.S. feed and residual use of 95 mb in “current crop” MY
2014/15 – which is up from 88 mb in MY 2013/14, and compares to 94 mb in drought‐affected MY 2012/13,
and 69 mb in MY 2011/12 (Table 1 and Figure 3).
The amount of grain sorghum used for livestock feeding has declined over time with the general decline
that has occurred in U.S. grain sorghum production, with some “crowding out” influence from ethanol
production usage likely also occurring. To illustrate, average U.S. grain sorghum production of 342 mb during
the 2008/09‐2013/14 period was 75.9% of the 450 mb average during the 1998/99‐2007/08 period. In
comparison, average U.S. grain sorghum feed and residual use of 125 mb during the 2008/09‐2013/14 period
was 64.0% of the 196 mb average during the 1998/99‐2007/08 period.
Total Use of U.S. Grain Sorghum: Total usage of U.S. grain sorghum for “current crop” MY 2014/15 is
projected to be 405 mb – which is up from 370 mb in MY 2013/14, and compares to 265 mb in drought‐
affected MY 2012/13, and the even lower amount of 218 mb in MY 2011/12 (Table 1 and Figure 3). United
States’ total grain sorghum use has varied based on available U.S. grain sorghum supplies in recent years, being
477 mb in MY 2007/08, 474 mb in MY 2008/09, 395 mb in MY 2009/10, 359 mb in MY 2010/11, 218 mb in MY
2011/12, 265 mb in MY 2012/13, 370 mb in MY 2013/14, and the projected amount of 405 mb in “current
crop” MY 2014/15. The record high U.S. grain sorghum usage of 869 mb occurred in MY 1985/86.
U.S. Grain Sorghum Ending Stocks, % Ending Stocks‐to‐Use, & Prices
U.S. grain sorghum ending stocks for “current crop” MY 2014/15 are projected to be 37 mb, up from 34
mb in MY 2013/14, 15 mb in MY 2012/13, 23 mb in MY 2011/12, and 27 mb in MY 2010/11 (Table 1 & Figure
4). Generally, U.S. grain sorghum ending stocks have been higher than most recent levels during the previous
1998/99‐2009/10 period – averaging 51 mb (range = 32‐66 mb).
Projected percent (%) ending stocks‐to‐use of 9.14% in “current crop” MY 2014/15 is down marginally
from 9.19% in MY 2013/14 (Table 1 & Figures 5‐6). United States’ grain sorghum % ending stocks‐to‐use has
trended from 11.06% in MY 2007/08, 11.54% in MY 2008/09, 10.44% in MY 2009/10, 7.64% in MY 2010/11,
10.55% in MY 2011/12, 5.72% in “drought stricken” MY 2012/13, to 9.19% in MY 2013/14, and now to a
projected level of 9.14% in “current crop” MY 2014/15. Ending stocks‐to‐use of 5.72% in MY 2012/13 is the 2nd
lowest on record, with only 3.50% in the “short crop” year of MY 1995/96 being lower since MY 1975/76.
Page | 6
U.S. average grain sorghum prices for “current crop” MY 2014/15 are projected to be $3.20‐$3.80 bu/ac
(midpoint = $3.505) (Table 1 & Figures 5‐6). These U.S. grain sorghum price projections by the USDA are equal
on a per bushel basis to the USDA’s price projections for U.S. corn in “current crop” MY 2014/15. Since the
beginning of the rapid expansion in U.S. ethanol production in 2006, U.S. corn and grain sorghum prices have
moved higher, then lower and higher again, with grain sorghum prices moving from $3.29 /bu in MY 2006/07,
to $4.08 in MY 2007/08, $3.20 in MY 2008/09, $3.22 in MY 2009/10, $5.02 in MY 2010/11, $5.99 in MY
2011/12, up to the record high of $6.33 in “drought stricken” MY 2012/13, but then down to $4.28 in MY
2013/14, and now to the projection of $3.50 in “current crop” MY 2014/15.
I‐D. KSU U.S. Grain Sorghum Market Scenarios: “Current crop” MY 2014/15 & “Next
Crop” MY 2015/16
Kansas State University Extension forecasts of U.S. grain sorghum 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. grain sorghum production uncertainty still remains that may be resolved in the January 12, 2015
USDA NASS Crop Production Annual Summary report. Also, there is the possibility that the USDA is overly
pessimistic in its projections of U.S. grain sorghum usage in the “current crop” 2014/15 marketing year – which
would ultimately lead to lower U.S. grain sorghum 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. Grain Sorghum Supply‐Demand & Prices
These Kansas State University supply‐demand and price projections for “current crop” MY 2014/15 reflect
the possibility of U.S. grain sorghum usage being underestimated by the USDA in the current marketing year.
“Current Crop” 2014/15 KSU Scenario for U.S. Grain Sorghum Supply‐Demand – 40% Probability
‐ Total Supplies …
November 18, 2014
Grain Market Outlook
CME eCorn Futures
Mar. 19 – Nov. 14, 2014
Close = $4.06 ½ on 11/17/2014
DEC 2014 CME eCorn Futures
Mar. 20 – Nov. 17, 2014
Close = $3.77 ½ on 11/17/2014
Page | 3
The “new crop” JULY 2015 corn futures market contract also responded in a moderately positive manner
to the information in the November 10th USDA reports. On the day of the report – Monday, November 10th –
CME JULY 2015 corn futures prices opened at $3.94 per bushel, trading within the range of $3.93 ¾ ‐ $4.07
during the session, before settling at $3.98 ½ – up $0.02 per bushel for the day (Figure 1). Since then, JULY
2015 corn futures prices have traded in a range from a low of $3.94 ½ on Tuesday, November 11th to a high of
$4.17 on Thursday, November 13th, before closing at $4.06 ½ on Monday, November 17th.
Question: Do the prices in early October represent a fall harvest low?
In hindsight now it seems that the upward trend in DEC 2014 and JULY 2015 corn futures prices since the
$3.46 ¾ low trading price on October 1, 2014 may signal that the fall harvest market low in corn futures prices
has occurred. Of course the results of the December 2014 and the January 2015 USDA crop production and
WASDE reports and the grain market’s reaction to them as well as other possible market influencing factors
will be key determinants as to whether these price levels ultimately represent the fall harvest “lows” for this
grain marketing year.
A time of seasonal market weakness typically has occurred during the months of January‐February in large
crop – low price years. Therefore it is still possible that prices may trend lower again sometime before spring,
2015. However, the $3.46 ¾ low on October 1st will be a key point of support for CME MARCH 2015 or CME
MAY 2015 corn futures prices should such a seasonal price decline occur in coming months.
I‐C. U.S. Corn Supply‐Demand – USDA Projections for “New Crop” 2014/15
U.S. Corn Acreage, Yield & Production
The USDA projected that 2014 U.S. corn total planted acreage would be 90.885 million acres (ma) –
unchanged from October (Table 1 and Figure 2). Planted acreage of 90.885 million acres in 2014 is down from
95.365 ma in 2013, 97.291 ma in 2012 (adjusted 116,000 acres higher by the USDA), and 91.936 ma in 2011.
In addition, the USDA projected 2014 U.S. corn harvested acreage to be 83.097 ma – unchanged from October
but down from 87.668 ma in 2013, and 87.365 ma in 2012, while still being up from 81.446 ma in 2011. The
2014 proportion of harvested‐to‐planted acreage for all U.S. corn is projected to be 91.4%, down from 91.9%
in to 2013, but up from 89.8% in 2012, and equal to 91.4% in 2011.
The projected 2014 U.S. average corn yield of 173.4 bushels per acre (bu/ac) would be a record high, but is
down from the earlier USDA projection of 174.2 bu/ac in October (Table 1 and Figure 3). This projection of
173.4 bu/ac in November 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 historic high of 164.7 bu/ac in 2009. Based on these 2014 acreage and yield
forecasts, the USDA projected 2014 U.S. corn production to be 14.407 billion bushels (bb) – which would be
the highest amount on record, larger than the current record high of 13.925 bb in 2013, 10.755 bb in 2012
(adjusted lower by 25 million bushels or “mb”), 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 “new 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 “new crop” MY 2014/15 are
Page | 4
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
“old crop” MY 2013/14 (2nd highest).
Beginning stocks of 1.236 bb in “new crop” MY 2014/15 are unchanged from October, but down from an
early season projection of 1.246 bb by the USDA in the July 2014 WASDE report (Table 1 and Figure 4).
Projected beginning stocks of 1.236 bb in “new crop” MY 2014/15 are up sharply from 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 25 mb in “new crop” MY 2014/15 are projected to be
down from 36 mb in “old crop” 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
“new crop” MY 2014/15 is 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 “new crop” MY 2013/14 is up from 5.134 bb in “old crop” MY 2013/14 (up 4
mb), while being 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 “new crop” MY 2014/15 has
ranged from 4.911‐5.278 bb on a weekly basis since early September 2014 ‐ the beginning of the “new crop”
2014/15 marketing year. Over the period of from September 1, 2014 through November 7, 2014, corn usage
for ethanol production was been on pace to reach 5.085 bb in “new crop” MY 2014/15. This estimate of 5.085
bb is less than the USDA’s adjusted November 2014 WASDE report estimate of 5.150 bb of corn to be used for
ethanol production during “new crop” MY 2014/15, with 10 of 52 weeks for 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
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 “old crop” MY 2013/14, and a projection of 1.164 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
307 mb, with approximately 307 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 down from the
estimate of 1.917 bb in “old crop” MY 2013/14, but are up sharply from 730 mb in MY 2012/13 – the 40 year
Page | 5
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 November 11th, through the tenth week of “new crop”
MY 2014/15 (10 of 52 weeks), 295.6 mb of U.S. corn had been physically shipped for export – equal to 16.9%
of the USDA’s updated projection for “new crop” MY 2014/15 of 1.750 bb. An additional 481.0 mb of U.S. corn
had been pre‐sold for future export shipments during the “new crop” 2014/15 marketing year – prior to
August 31, 2015 (the end of “new crop” MY 2014/15).
Adding together 295.6 mb in past shipments plus 481.0 mb in forward sales amounts to 776.6 mb, or
44.4% of the USDA’s 1.750 bb U.S. corn export target for “new crop” MY 2014/15 in the November 10th USDA
WASDE report with 19.2% (10/52 weeks) of the marketing year completed. United States’ corn exports will
need to average 34.6 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 17.5 mb and 23.7 mb of export shipments for the weeks ending
October 30th and November 6th, 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 1.385 bb (down 30 mb from
October) in “new crop” MY 2014/15 is greater than 1.363 bb (down 11 mb) in “old crop” 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 “new crop” MY 2014/15 is
unchanged from October but up 25 mb from the September WASDE report (Figures 5 and 7). This projection
of 5.375 bb in “new crop” MY 2014/15 is up from 5.132 bb for “old crop” MY 2013/14 (up 8 mb), and up from
4.315 bb in MY 2012/13 (down 25 mb). 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 November 13th Feed Outlook Report (http://www.http://usda.mannlib.cornell.edu/usda/current/FDS/FDS‐11‐13‐
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 125.8 million metric tons (mmt) in MY 2012/13 (87.1% corn), and 137.0 mmt
in “old crop” MY 2013/14 (95.2% corn), and is projected to be 146.3 mmt in “new crop” MY 2014/15 (93.3%
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 91.5 million in “new
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 “old crop” MY 2013/14, and is projected to be 1.599
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 13.660 bb – up 5 mb from October.
This amount is up from 13.546 bb in “old crop” MY 2013/14, and up sharply from 11.083 bb (down 25 mb) in
drought‐affected MY 2012/13 (Table 1 and Figures 5 & 7). United States’ total corn use has varied based
largely 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, 11.083 bb in MY
2012/13, the current record high of 13.546 bb in “old crop” MY 2013/14, and the projected new record high
amount of 13.660 bb in “new crop” MY 2014/15.
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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 2.008 bb – down 73 mb from the
October WASDE report (Table 1 & Figure 4). This forecast amount of U.S. corn ending stocks of 2.008 bb in
“new crop” MY 2014/15 up from 1.236 bb in “old crop” 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 “old crop” MY 2013/14, and are now projected to be 2.008 bb in “new crop” MY
2014/15.
Projected percent (%) ending stocks‐to‐use of 14.8% in “new crop” MY 2014/15 are up 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 “old crop” MY 2013/14, and now to a projected level of 14.8% 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 8‐9) – up from $3.10‐$3.70 (midpoint = $3.40) in the October WASDE
report, and equal to the forecast price range in 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, up to the record high of
$6.89 in “drought stricken” MY 2012/13. However, if the November 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 “old crop” MY 2013/14, and again down to $3.20‐$3.80 (midpoint = $3.50) in “new crop” MY 2014/15.
I‐D. KSU U.S. Corn Market Scenarios: “New Crop” MY 2014/15 & “Next Crop” MY
2015/16
Kansas State University forecasts of U.S. corn supply‐demand balances for “new crop” in the 2014/15 and
“next crop” 2015/16 marketing years are provided below. Given the market information available in mid‐
November 2014, these conservative price projections that follow seem reasonable – especially for the current
marketing year, i.e., “new 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 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 “new 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.
These Kansas State University supply‐demand and price projections for “new crop” MY 2014/15 reflect
the possibility of U.S. corn usage being underestimated by the USDA in the current marketing year. However,
for “next crop” MY 2015/16, these KSU projections reflect the likelihood of a reduction in U.S. corn acreage in
2015, and how a possible return to trendline U.S. corn yields and a moderation of 2015 U.S. corn production in
would be likely affect U.S. corn supply‐demand balances and prices in the next marketing year, i.e., September
1, 2015 through August 31, 2016.
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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 “new crop” MY 2014/15 are based on projections of
U.S. corn % ending stocks‐to‐use shown in Table 1 and Figures 8‐9.
A. “New Crop” 2014/15 KSU Scenario for U.S. Corn Supply‐Demand – 40% Probability
‐ Total Supplies …
January 1, 2002
Farm Business and Transition Planning
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August 1, 2010
Research Papers and Presentations
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Research Papers and Presentations
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Production Publications
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Production Publications
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