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October 25, 2017
Grain Market Outlook
corn market to 2017 summer‐early fall production risks that occurred. The
corn market has been less responsive to any 2017 U.S. corn production threats since beginning stocks for “new
crop” MY 2017/18 have been projected to be near 2.340 bb rather than down to 1.000 bb. If this “large stocks
situation” persists through summer 2018, this mitigating and limiting affect will likely hamper future 2018 corn
crop forward pricing prospects as well.
Second, the grain market continues to anticipate that low prices for U.S. corn will help maintain strong
usage for domestic U.S. ethanol and wet milling production, as well as livestock feeding through at least spring
2018 if not into the summer months.
Third, at least “moderate” continued strength is expected in U.S. corn exports due to low U.S. corn prices
and also to a moderate weakening of the U.S. dollar against other World currencies. Export …
March 15, 2018
Grain Market Outlook
prices to date, b) expectations of significantly
tighter foreign stocks and percent (%) stocks‐to‐use for corn, and c) the eventual “using up” of competing
South American corn exports in spring 2018.
Current forecasts are for 2018 Brazilian corn production to be 94.5 million metric tons (mmt) in this
marketing year – versus 98.5 mmt last year ‐ with harvests lasting from February through May. However,
forecasts are for 2018 Argentina corn production to be 36.0 mmt in this marketing year – versus 41.0 mmt a
year ago ‐ with harvests lasting from March through May. The Argentina production figure is at risk to falling
further. To the degree that 2018 corn production in Argentina and southern Brazil is limited by crop weather
issues, there will likely be subsequent support U.S. corn export prospects.
Fourth, a continuing threat exists of U.S. and Foreign economic and/or financial system disruptions that
could impact grain, energy, and other commodity markets in 2018. World geo‐political events could provide
“shocks” to U.S. and World energy and grain markets which could in turn impact grain prices in either direction
depending on the circumstances, the countries involved, and their role in global corn export trade.
4. USDA Supply‐Demand & Price Forecasts
In the March 8th WASDE report, the USDA left unchanged its projections of a) 2017 U.S. corn production of
14.604 bb – down from the record high of 15.148 bb in 2016, and b) “old crop” MY 2017/18 total supplies of
16.947 bb – up marginally from a year earlier. Total use is forecast at 14.820 bb – raised 225 mb from the
February WASDE on prospects for a) higher ethanol use of 5.575 bb (raised 50 mb), and b) higher exports of
2.225 bb (raised 175 mb). Ending stocks are projected to be a 2.127 bb (14.35% Stocks/Use) – down 225 mb
from February, and down from 2.293 bb (15.65% S/U) in MY 2016/17. United States’ corn prices are projected
to average $3.35 /bu (range of $3.15‐$3.55). This is down $0.01 /bu from $3.36 /bu from MY 2016/17.
At the Agricultural Outlook Forum in Arlington, Virginia on February 23, 2018, the USDA forecast that a)
2018 U.S. corn production would be 14.390 bb – based on 90.0 million acres (ma) planted, 82.7 ma harvested,
and a yield of 174.0 bu. Total use is forecast at 14.520 bb – with projections of ethanol use at 5.650 bb (a
record high), non‐ethanol food seed and industrial use at 1.495 bb (also a record high), exports of 1.900 bb
(down 325 mb from the current marketing year), and feed and residual use of 5.475 mb (down 75 mb from this
year). After a KSU‐adjustment for lower beginning stocks based on the March 8th WASDE report, ending stocks
are projected to be a 2.047 bb (14.10% Stocks/Use) – with both being down moderately from “old crop” MY
2017/18 levels. United States’ corn prices are projected to average a KSU‐adjusted $3.45 /bu (up $0.05‐$0.10
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from this year). It is probable that the export projection for “new crop” MY 2018/19 may be raised in coming
months due to South American production problems – causing these ending stocks and % stocks‐to‐use
estimates to tighten further. This scenario is given a 50% likelihood of occurring by KSU Extension
Agricultural Economist D. O’Brien.
5. Alternative KSU Supply‐Demand & Price Forecast for “New Crop” MY 2018/19
Two alternative KSU‐Scenarios for U.S. corn supply‐demand and prices are presented for “new crop” MY
2018/19. These projections are to show how varying 2018 U.S. corn production outcomes could affect U.S.
corn supply‐demand and price outcomes in “new crop” MY 2018/19.
A ‐ KSU “Higher 2018 U.S. Corn Production” Scenario for “new crop” MY 2018/19: (25% probability):
Assumptions are as follows: 90.000 ma planted, 82.700 ma harvested, 176.6 bu/ac record yield (equal to
2017 record high), 14.605 bb production, 16.782 bb total supplies, 14.600 bb total use, 2.182 bb ending
stocks, 14.95% S/U, & $3.30 /bu U.S. corn average price;
B ‐ KSU “Lower 2018 U.S. Corn Production” Scenario for “new crop” MY 2018/19: (25% probability):
Assumptions are as follows: 90.000 ma planted, 82.700 ma harvested, 164.4 bu/ac yield (equal to 2009
yield), 13.596 bb production, 15.773 bb total supplies, 14.315 bb total use, 1.458 bb ending stocks, 10.19%
S/U, & $4.20 /bu U.S. corn average price;
6. World Corn Supply‐Demand – With & Without China
World corn production of 1,041.7 million metric tons (mmt) is projected for “old crop” MY 2017/18, down
3.1% from the record of 1,075.2 mmt in MY 2016/17, but still up 7.0% from 973.45 mmt in MY 2015/16. World
corn total supplies of 1,273.6 mmt in “old crop” MY 2017/18 are forecast to be down moderately from the
record high 1,290.2 mmt in MY 2016/17, but up from 1,183.2 mmt in MY 2015/16.
World corn exports of a 155.9 mmt are projected for “old crop” MY 2017/18, down 2.4% from the record
high of 159.8 mmt in MY 2016/17, and up 30.2% from 119.7 mmt in MY 2015/16. Projected World corn ending
stocks of 199.2 mmt (18.5% S/U) in “old crop” MY 2017/18 are down from the record high 231.9 mmt (21.9%
S/U) in MY 2016/17, and from 215.0 mmt (22.2% S/U) in MY 2015/16. Projected Foreign (Non‐U.S.) corn
ending stocks of 145.1 mmt (17.0% S/U) in “old crop” MY 2017/18 are down from 173.6 mmt (21.9% S/U) in
MY 2016/17, and from 170.9 mmt (23.1% S/U) in MY 2015/16.
An alternative view of the World corn supply‐demand is presented if Chinese corn usage and ending stocks
are isolated from the World market. “World‐Less‐China” corn ending stocks are projected to be 119.6 mmt
(14.35% S/U) in “old crop” MY 2017/18, down from 131.1 mmt (15.9% S/U) in MY 2016/17, but up from 104.2
mmt (13.9% S/U) in MY 2015/16. These figures show that World stocks‐to‐use of corn less China’s direct
influence are projected to be approximately 22% lower (i.e., 14.35% S/U for the “World‐Less‐China” versus
18.5% S/U for the “World” overall in “old crop” MY 2017/18).
At the same time, these figures also show that Chinese ending stocks of corn as proportion of the World
total are declining – down from 51.5% in MY 2015/16, to 43.4% in MY 2016/17, and down to 39.9% in “old
crop” MY 2017/18. The deliberate actions in recent years ‐ taken by the Chinese government to reduce
feedgrain stockpiles – is impacting the relative amount of World total corn stocks they hold. These actions
may eventual increase Chinese import demand for U.S. corn and grain sorghum.
…
June 19, 2014
Grain Market Outlook
… for the remainder of 2014. This year will the Brazilian export system be able to handle large supplies of
soybeans, corn and other products in a more effic … m September 1, 2014 through August 31, 2015.
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The USDA National Agricultural Statistics Service (NASS) will release its 2014 Acreage and June Quarterly
Stocks reports on Friday, June 30. The 2014 Acreage report will provide a survey‐based update of 2014
planted and harvested acreage of U.S. soybeans and other crops. The June Quarterly Stocks report will
provide information on the pace of U.S. soybean usage during the March‐April‐May 2014 quarter, and on the
levels of U.S. soybean stocks on June 1, 2014, and allow for better accuracy in projecting U.S. soybean
“current” MY 2013/14 ending stocks on August 31, 2014.
I‐C. Soybean Futures Trends Since the June 11th USDA Reports
The “current crop” JULY 2014 soybean futures market contract responded in a volatile and ultimately
positive manner to the information in the July 11th USDA reports. On the day of the report – Wednesday, June
11th – Chicago Board of Trade (CBOT) JULY 2014 soybean futures prices opened at $14.61 ¾ per bushel, and
traded as high as $14.66 ½ and as low as $14.44 ½ during the session, before settling at $14.45 ½ – down $0.17
for the day (Figure 1). The USDA report findings were publicly released at approximately mid‐session, i.e.,
12:00 noon eastern time (11:00 a.m. central) that day. Since then JULY 2014 soybean futures prices have
traded generally lower – from a high of $14.52 ¾ on June 12th, to a low of $13.93 ½ on Wednesday, June 18th
before closing at $14.09 on the same day. Prior to the June 11th report, JULY 2014 soybean futures had
trended sharply higher from lows in the range of $12.34 ‐ $12.34 ¾ on January 8, 24 and 30, 2014 to highs of
$15.21 on April 17th and $15.20 ½ on April 29th, and then to a “higher high” of $15.36 ¾ on May 22, before
trending lower through late May and early‐mid June.
Figure 1. July 2014 and November 2014 CME Soybean Futures Price Charts (electronic trade) …
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July 3, 2019
Precision Ag and Technology Articles
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September 21, 2015
Grain Market Outlook
Futures
Jan. 21, 2015 – Sept. 18, 2015
Close = $5.16 on 9/18/2015
DEC 2015 CME KS Wheat Futures
Jan. 21, 2015 – Sept. 18, 2015
Close = $4.82 ¼ on 9/18/2015
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(Figure 1). Since then, DECEMBER 2015 Kansas HRW wheat futures first traded higher before trending lower –
but still at higher levels than prior to the September 11th USDA reports. DEC 2015 Kansas HRW wheat has
traded in a range of a high of $4.98 ¼ on Monday, September 14th to a low of $4.78 ¼ on Thursday, September
17th, before closing at $4.82 ¼ per bushel on Friday, September 18th.
Similarly, CME JULY 2016 Hard Red Winter wheat futures prices opened at $5.10 ½ on Friday, September
11th – the day of the release of the USDA reports at midday (i.e., 11 a.m., central time) – and traded in a low‐
high range of a high of $5.02 ¼ up to a high of $5.16 during the session before closing $0.05 higher for the day
at $5.15 ½ /bu (Figure 1). Since the September 11th USDA report, CME JULY 2016 Kansas HRW wheat futures
have trended lower, trading in a high‐low range of a high of $5.30 on Tuesday, September 12th down to a low
of $5.12 ¼ on Thursday, September 17th, before closing at $5.16 per bushel on Thursday, September 18th.
The Trade Weighted U.S. Dollar Index has been generally trending higher from mid‐July 2011 through
early July 2014 (Figure 2). After an index value of 75.69 on July 1, 2014 the calculated U.S. trade weighted
dollar index trended up to a high of 93.37 on Friday, February 13, 2015 – an increase of 23.4%. After moving
lower for a period of time, the index rose again to a high of 93.09 on August 5, 2015. The latest recorded value
of the Trade Weighted U.S. Dollar Index was 91.36 on Friday, September 11, 2015 – moving sideways to lower
from the early August 2015 high.
Figure 2. Daily U.S. Trade Weighted Dollar Index (Source: St. Louis Federal Reserve Bank, FRED)
This trend in the value of the U.S. trade weighted dollar index is especially significant to the U.S. wheat
market. A higher U.S. dollar exchange rate relative to other major currencies generally makes it more
expensive for foreign buyers of U.S. wheat to exchange their country’s currencies for U.S. dollars – which they
would then in turn use to purchase U.S. wheat exports (i.e., which are denominated or “priced” in U.S. dollars).
Although this is not the only factor negatively impacting U.S. wheat exports, it is a very important one –
working against U.S. wheat being an affordable, competitive alternative export seller in World wheat trade. …