Search
Displaying 691 - 700 of 5631
May 1, 2008
KFMA Newsletters
combination of crops
and livestock, especially dairies. The … 47,912 36,777
Cash Crop – Livestock 31 76,332 34,629 85,253 …
September 17, 2015
Grain Market Outlook
impacts on 2016 crop production,
could each impact corn market price direction and volatility in the “new crop” 2015/16 marketing year. Also,
low feedgrain prices have resulted in lower input costs and improved profitability for U.S. and Foreign livestock
feeding and bioenergy users, and led to increased feedgrain usage. A combination of these production and
demand impacts over time are likely to eventually cause a change in the prevailing “large crop – low price”
market scenario in U.S. and World coarse grain markets.
USDA U.S. Corn Market Forecast: In the 9/11/2015 WASDE report, the USDA lowered is forecast of 2015 U.S.
corn production as well as corn usage and end stocks estimates – leading to a marginal increase in projected
U.S. corn prices for “new crop” MY 2015/16. Projected 2015 U.S. corn production of 13.585 billion bushels
(bb) is down 101 million bushels (mb) from August, but still down from 14.216 bb in 2014, with total supplies
of 15.347 bb in “new crop” MY 2015/16 being down 141 mb from “old crop” MY 2014/15. Record high
forecast MY 2015/16 total corn usage of 13.755 bb (up 10 mb vs MY 2014/15), includes ethanol use of 5.250
bb (up 45 mb vs year ago), non‐ethanol FSI use of 1.380 bb (up 15 mb vs year ago), with exports of 1.850 bb
and feed and residual use of 5.275 bb (both down 25 mb vs year ago). Ending stocks are forecast at 1.592 bb
(11.6% S/U) in “new crop” MY 2015/16 – down from 1.732 bb (12.6% S/U) in “old crop” MY 2014/15, but still
up from 1.232 bb (9.2% S/U) in MY 2013/14, and 821 mb (7.4% S/U) in MY 2012/13. “New crop” MY 2015/16
U.S. average cash prices are forecast in the range of $3.45‐$4.05 /bu. (midpoint of $3.75) versus to $3.68 in
“old crop” MY 2014/15, $4.46 in MY 2013/14, and $6.89 in MY 2012/13.
KSU U.S. Corn Market Forecasts: Projected supply‐demand and price scenarios by KSU for “new crop” MY
2015/16 are as follows: a) “2015 Normal Crop 13.568 bb Production” Scenario (45% prob.): 88.897 ma
planted, 81.000 ma harvested, yield of 167.5 bu/ac, 2015 U.S. corn production of 13.568 bb, total supplies of
15.330 bb, total use of 13.775 bb, ending stocks of 1.597 bb, 11.6% S/U, & $3.85 /bu U.S. corn MYA prices; b)
“2015 Smaller Normal Crop 13.365 bb Production” Scenario (50% prob.): 88.897 ma planted, 81.000 ma
harvested, yield of 165.0 bu/ac, 2015 U.S. corn production of 13.365 bb, total supplies of 15.127 bb, total use
of 13.655 bb, ending stocks of 1.472 bb, 10.8% S/U, & $4.05 /bu U.S. corn MYA prices; and c) “2015 Short Crop
12.555 bb Production” Scenario (5% prob.): Planted / harvested acres same as scenarios (a) & (b), but with a
KSU low yield of 155.0 bu/ac, U.S. corn production of 12.555 bb, total supplies of 14.327 bb, total use of
13.240 bb, ending stocks of 1.087 bb, 8.21% S/U, & $6.00 /bu U.S. corn MYA prices.
World Corn Supply‐Demand: World total supplies of 1,175 million metric tons (mmt) are projected for “new
crop” MY 2015/16, down from 1,183 mmt in “old crop” MY 2014/15, and 1,129 mmt in MY 2013/14.
Projected World corn ending stocks of 189.7 mmt (19.2% S/U) in “new crop” MY 2015/16 are down marginally
from 197.2 mmt (20.0% S/U) in “old crop” MY 2014/15, but up from 175.9 mmt (18.5% S/U) in MY 2013/14.
Page | 2
I. U.S. Corn Market Situation and Outlook
I‐A. September USDA Reports & “New Crop” MY 2015/16 Projections
On September 11th in its Crop Production report the USDA National Agricultural Statistics Service (NASS)
made its’ second monthly projection of 2015 U.S. corn production. Objective “in field” U.S. corn yield
measurements in top U.S. corn producing states were conducted by USDA NASS representatives between
August 25 and September 8, 2015 to gather information on expected U.S. corn yields as of September 1, 2015.
During the same time period approximately 11,000 farm operator surveys were conducted by the USDA
primarily by phone. Forecast accuracy of this September 1, 2015 projection is 3.4 percent, indicating that
there is a 67% probability of the final 2015 estimate being within plus or minus 3.4% of the USDA’s September
1st projection of 13.585 billion bushels, i.e., in the range of 13.123 to 14.047 billion bushels.
On the same day the USDA World Agricultural Outlook Board (WAOB) released its September 2015 World
Agricultural Supply and Demand Estimates (WASDE) report – containing U.S. and World corn supply‐demand
and price projections for the 2013/14, “old crop” 2014/15, as well as the “new crop” 2015/16 marketing years.
The “new crop” 2015/16 marketing year for U.S. corn began on September 1, 2015 and will last through
August 31, 2016.
I‐B. CME DEC 2015 & MAY 2016 Corn Futures Trends
The CME DECEMBER 2015 corn contract is now the “lead” corn futures contract – representing “new crop”
2015 corn market price prospects. Local basis adjustments are now being made off DEC 2015 corn futures for
spot cash corn and grain sorghum price bids in North America as well as other World grain markets. The “new
crop” DECEMBER 2015 corn futures market contract initially responded in a “very positive” manner to the
information in the September 11th USDA reports, and in the days afterward have retained most of their initial
price gains due to U.S. crop development and production concerns. 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.
On the day of the report – Friday, September 11th – Chicago Mercantile Exchange (CME) DECEMBER 2015
corn futures prices opened at $3.74 per bushel, and traded in a range of $3.64 ½ ‐ $3.87 ½ during the session,
before settling at $3.87 – up $0.12 ¾ for the day (Figure 1). Since then, DECEMBER 2015 Corn has traded
from a high of $3.95 on Tuesday, September 15th to a low of $3.83 on Wednesday, September 16th before
closing at $3.86 on that same day.
The CME JULY 2016 corn contract represents price prospects during May – June, 2016 – including the
anticipated bulk of the key U.S. corn planting period of late April through May, 2016. JULY 2016 is the futures
contract which local basis adjustments are made off of for most of the “spring 2015” corn and grain sorghum
forward contract price bids or hedges here in the United States. The JULY 2015 corn futures market contract
also initially responded “positively” to the information in the September 11th USDA reports, and since then has
trended first higher and then mostly sideways.
On the day of the report CME JULY 2016 corn futures prices opened at $3.97 ½ per bushel, trading within
the range of $3.87 ½ ‐ $4.10 ¼ during the session, before settling at $4.10 – up $0.12 ½ per bushel for the day
Page | 3
(Figure 1). Since then, DECEMBER 2015 Corn has traded from a high of $4.17 ¾ on Tuesday, September 15th
to a low of $4.06 ½ on Wednesday, September 16th before closing at $4.09 ¼ on that same day.
Figure 1. DECEMBER 2015 & MAY 2016 CME Corn Futures Price Charts …
April 30, 2015
Grain Market Outlook
I‐C. U.S. Corn Supply‐Demand – Focus on “New Crop” 2015/16 Projections
U.S. Corn Acreage, Yield & Production
In the March 31, 2015 USDA Prospective Plantings report the USDA projected that 2015 U.S. corn total
planted acreage would be 89.199 million acres (ma), down 2.398 ma (down 1.5%) from 90.597 ma in 2014,
down 6.166 ma (‐6.5%) from 95.365 ma in 2013, down 8.092 ma (‐8.3%) from 97.291 ma in 2012, and down
from 91.921 ma in 2011 (Table 1 and Figure 3).
Assuming the average harvested‐to‐planted acreage for all U.S. corn over the 2007‐2014 period of 91.6%,
2015 U.S. corn harvested acreage would be 81.706 ma, down 1.430 ma (‐1.7%) from 83.136 ma in 2014, down
5.745 ma (‐6.6%) from 87.451 ma in 2013, down 5.659 ma (‐6.5%) from 87.365 ma in 2012, and down from
83.981 ma in 2011.
The 2014 U.S. average corn yield of 171.0 bushels per acre (bu/ac) is a record high and unchanged from
the January‐March USDA reports, but is higher than the 166.8 bu/ac estimate in the 2015 USDA Agricultural
Outlook Forum estimate given on February 19‐20, 2015 in Arlington, Virginia (Table 1 and Figure 4). This early
2015 USDA projection of 166.8 bu/ac is up from 158.1 bu/ac in 2013, the drought affected 2012 low yield of
123.1 bu/ac., 147.2 bu/ac in 2011, 152.8 bu/ac in 2010, and and up from the previous record high of 164.7
bu/ac in 2009.
Based on this combination of projections for 2015 planted acreage (89.199 ma – from the USDA),
harvested acreage (81.706 ma – a KSU assumption based on recent historic percent harvested‐to‐planted
acres), and yield (166.8 ma – USDA), 2015 U.S. corn production would be 13.629 billion bushels (bb) – down
from the record high of 14.206 bb 2014, and the previous record high of 13.829 bb in 2013 – but up from
10.755 bb in 2012, 12.360 bb in 2011, 12.447 bb in 2010, and 13.092 bb in 2009 (Table 1).
U.S. Corn Total Supplies
The USDA projects that total supplies of U.S. corn for “current crop” MY 2014/15 are a record high 15.472
bb – resulting from beginning stocks of 1.232 bb, projected 2014 production of 14.216 bb, and projected
imports of 25 million bushel (mb) (Table 1 and Figure 5). For “new crop” MY 2015/16, Total supplies are
expected to be “equal‐or‐marginally higher at 15.481 bb – resulting from beginning stocks of 1.827 bb,
projected 2015 production of 13.629 bb, and projected imports of 25 million bushel (mb) in “new crop” MY
2015/16 (Table 1). Total supplies of near 15.5 bb in “current crop” MY 2014/15 and “new crop” MY would
both be record highs relative to recent years, being comparable to 14.362 bb in MY 2007/08, 13.729 bb in MY
2008/09, 14.774 bb in MY 2009/10, 14.182 bb in MY 2010/11, 13.517 bb in MY 2011/12, 11.904 bb in “short
crop” MY 2012/13, and 14.686 bb in MY 2013/14.
Page | 5
The implicit USDA forecast of beginning stocks of 1.827 bb in “new crop” MY 2015/16 (equal to ending
stocks from “current year” MY 2014/15) are up substantially from 1.232 bb in beginning stocks in “current
crop” MY 2014/15, 821 mb in MY 2013/14, 989 mb in MY 2012/13, and 1.128 bb in MY 2011/12, and at least
moderately larger than 1.708 bb in MY 2010/11, 1.673 bb in MY 2009/10, and 1.624 bb in MY 2008/09. This
amount of beginning stocks in “new crop” MY 2015/16 of 1.827 bb is up considerably from the low of 426 mb
that occurred in MY 1996/97, and the highest since 1.967 bb in MY 2006/07 and 2.114 bb in MY 2005/07
(Table 1 and Figure 5).
Imports of 25 mb in “current crop” MY 2014/15 are projected to be down from 36 mb in MY 2013/14 (the
2nd highest on record), and are also down sharply from the record high of 160 mb in the drought‐stressed
2012/13 marketing year. The KSU projection of 25 mb in imports in “new crop” MY 2015/16 would be equal to
the amount in “current crop” MY 2014/15. These amounts of U.S. corn imports are comparable to 29 mb in
MY 2011/12, and 28 mb in MY 2010/11.
U.S. Corn Use by Category & Total Use
U.S. Ethanol Production and Corn Usage: Projected U.S. corn use for ethanol production of 5.200 bb in
“current crop” MY 2014/15 is unchanged from March, but down 50 mb from 5.250 bb in February, but still up
from 5.175 bb in January and from 5.150 bb in the December 2014 WASDE report. These adjustments in the
USDA projections since December 2014 are due to a) low corn input prices, b) at least moderate strength in
distillers grains co‐product prices, and c) increased projections of 2015 U.S. gasoline consumption released in
recent months (Table 1 and Figures 6‐7). This projection of 5.200 bb in “current crop” MY 2014/15 is up from
5.134 bb in MY 2013/14, 4.641 bb in MY 2012/13, and 5.000 bb in MY 2011/12. The USDA projected that
5.225 bb of U.S. corn would be used in ethanol production in “new crop” MY 2015/16 at its Agricultural
Outlook Forum on February 19‐20, 2015 in Arlington, Virginia.
Figure 7 shows weekly U.S. oxygenated plant production of fuel ethanol as reported by the U.S. Energy
Information Administration (www.eia.gov) with a calculated estimate of corn use developed by Kansas State
University. Assuming 2.83 gallons of ethanol produced per bushel of corn (equaling the calculated conversion
of U.S. corn into ethanol in January 2015), these calculations indicate that the equivalent projected annual rate
of U.S. corn used for ethanol production for “current crop” MY 2014/15 has ranged from 4.772‐5.374 bb on a
weekly basis since early September 2014 ‐ the beginning of the “current crop” 2014/15 marketing year. Over
the period of from September 1, 2014 through April 24, 2015, corn usage for ethanol production was been on
pace to reach 5.117 bb in “current crop” MY 2014/15. This estimate of 5.117 bb is 83 mb less than the USDA’s
April 9, 2015 WASDE report estimate of 5.200 bb of corn to be used for ethanol production during “current
crop” MY 2014/15, with 34 of 52 weeks (65.4%) of the marketing year completed.
U.S. Corn Use as Distillers Grains: An estimate of the U.S. corn equivalent amounts of distillers grains
(DDGS) use for direct livestock feeding and exports is p …
March 15, 2016
Grain Market Outlook
El Nino‐La Nina transition”‐ related weather patterns in spring‐summer 2016 with
negative impacts on 2016 crop production, could each still impact corn market prices through summer‐fall
2016. Also, low feedgrain prices have resulted in lower input costs for U.S. and Foreign livestock feeding and
bioenergy us …
July 21, 2015
Grain Market Outlook
use production problems for
corn and other coarse grains in parts of the U.S., South America, Australia, India, and elsewhere in the next 6‐
12 months. Low feedgrain prices – resulting in lower input costs for U.S. and Foreign livestock feeding and
bioenergy users ‐ have helped to increase profitability of corn‐using industries and led to increased feedgrain
usage. A combination of these production and demand impacts in the future are likely to eventually bring
about a change in the current World‐wide “large crop – low price” market scenario faced in coarse grain and
other agricultural markets.
USDA U.S. Corn Market Forecast: The USDA projected lower production, higher usage, moderately tighter
ending stocks and stocks‐to‐use, and marginally higher U.S. prices for “new crop” MY 2015/16 than for the
“current” 2014/15 marketing year. Projected 2015 U.S. corn production of 13.530 bb is down from 14.216 bb a
year earlier, with total supplies of 15.334 bb in “new crop” MY 2015/16 down from 15.474 bb in “current” MY
2014/15. Projected MY 2015/16 total corn usage of 13.735 bb is a record (up from 13.696 bb in MY 2014/15),
with ethanol use of 5.225 bb (up 25 mb vs a year earlier), non‐ethanol FSI use of 1.360 bb (up 14 mb), exports
of 1.875 bb (up 25 mb), and feed and residual use of 5.275 bb (down 25 mb). Ending stocks are forecast at
1.599 bb (11.6% S/U) in “new crop” MY 2015/16 – down from 1.779 bb (13.0% S/U) in “current” MY 2014/15,
but still up from 1.232 bb (9.2% S/U) in MY 2013/14, and 821 mb (7.4% S/U) in MY 2012/13. “New crop” MY
2015/16 U.S. average cash prices are forecast to be in the range of $3.45‐$4.05 per bu. (midpoint of $3.75)
versus to $3.60‐$3.80 /bu ($3.70 midpoint) in “current” MY 2014/15, and $4.46 in MY 2013/14.
KSU U.S. Corn Market Forecasts: Projected supply‐demand and price scenarios by KSU for “new crop” MY
2015/16 are as follows: a) “2015 ‘Normal Crop’ 13.382 bb Production” Scenario (30% prob.): 88.897 ma
planted, 81.101 ma harvested, yield of 165.0 bu/ac, 2015 U.S. corn production of 13.382 bb, total supplies of
15.186 bb, total use of 13.710 bb, ending stocks of 1.476 bb, 10.77% S/U, & $4.25 /bu U.S. corn MYA prices; b)
“2015 ‘Smaller Normal Crop’ 13.163 bb Production” Scenario (55% prob.): 88.897 ma planted, 81.101 ma
harvested, KSU long term trend yield of 162.25 bu/ac, 2015 U.S. corn production of 13.163 bb, total supplies of
14.967 bb, total use of 13.625 bb, ending stocks of 1.342 bb, 9.84% S/U, & $4.35 /bu U.S. corn MYA prices; and
c) “2015 ‘Short Crop’ 12.571 bb Production” Scenario (15% prob.): Planted / harvested acres same as
scenarios (a) & (b), but with a KSU low yield of 155.0 bu/ac, U.S. corn production of 12.571 bb, total supplies of
14.375 bb, total use of 13.405 bb, ending stocks of 970 mb, 7.24% S/U, & $6.90 /bu U.S. corn MYA prices.
World Corn Supply‐Demand: World total supplies of 1,181 mmt are projected for “new crop” MY 2015/16, up
from 1,176 mmt in “current” MY 2014/15, and 1,128 mmt in MY 2013/14. Projected World corn ending stocks
of 190.0 mmt (19.2% S/U) in “new crop” MY 2015/16 are down marginally from 194.0 mmt (19.7% S/U) in
“current” MY 2014/15, but up from 174.7 mmt (18.3% S/U) in MY 2013/14.
Page | 2
I. U.S. Corn Market Situation and Outlook
I‐A. July USDA Reports & “New Crop” MY 2015/16 Projections
On July 10th the USDA World Agricultural Outlook Board (WAOB) released its July 2015 World Agricultural
Supply and Demand Estimates (WASDE) report – containing U.S. and World corn supply‐demand and price
projections for the 2013/14, “current” 2014/15, as well as the “new crop” 2015/16 marketing years. The
2014/15 marketing year will end on August 31, 2015, while the “new crop” 2015/16 U.S. corn marketing year
will begin on September 1, 2015 and will last through August 31, 2016.
In the July 10th WASDE report the USDA released projections for the “new crop” 2015/16 marketing year
for corn, grain sorghum, wheat, soybeans and other major crops. Projections of 2015 crop size for corn are
based on WAOB estimates of crop acreage and yields. However, the first projection of 2015 U.S. corn
production by the USDA National Agricultural Statistics Service (NASS) that will be based on actual farmer
surveys and field trials will be in the August 12, 2015 Crop Production and WASDE reports.
I‐B. Corn Futures Trends for the December 2014 – mid‐July 2015 Period
The CME SEPTEMBER 2015 corn contract is now the “lead” corn futures contract, representing current
grain market price prospects through late August 2015, when the CME DECEMBER 2015 corn contract will
then assume the lead contract role in the market. Local basis adjustments are currently being made off
SEPTEMBER 2015 corn futures for spot cash corn and grain sorghum price bids in North America as well as
other World grain markets. The “current crop” SEPTEMBER 2015 corn futures market contract initially
responded in a “positive” manner to the information in the July 10th USDA reports, and in the days afterward
trended first higher then back lower.
On the day of the report – Friday, July 10th – Chicago Mercantile Exchange (CME) SEPTEMBER 2015 corn
futures prices opened at $4.28 per bushel, and traded in a range of $4.24 ¼ ‐ $4.39 ½ during the session,
before settling at $4.34 ¾ – UP $0.06 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,
SEPTEMBER 2015 Corn has traded from a high of $4.43 ¼ on Tuesday, July 14th to a low of $4.04 ½ on Monday,
July 20th before closing at $4.05 on that same day.
The CME DECEMBER 2015 corn contract is now the lead “new crop” corn futures contract, representing
U.S. corn market price prospects for the mid‐October through late‐November 2015 time period. DEC 2015 is
the futures contract which local basis adjustments are made off of for “fall harvest 2015” corn and grain
sorghum forward contract price bids or hedges here in the United States. The “new crop” DECEMBER 2015
corn futures market contract also initially responded “positively” to the information in the July 10th USDA
reports, and since then has trended first higher and then downward.
On the day of the report CME DECEMBER 2015 corn futures prices opened at $4.38 ¼ per bushel, trading
within the range of $4.34 ¼ ‐ $4.49 during the session, before settling at $4.45 – up $0.06 per bushel for the
day (Figure 1). Since then, DECEMBER 2015 Corn has traded from a high of $4.54 ¼ on Tuesday, July 14th to a
low of $4.15 ¼ on Monday, July 20th before closing at $4.16 on that same day.
Page | 3
Figure 1. SEPTEMBER 2015 & DECEMBER 2016 CME Corn Futures Price Charts (electronic trade) …
September 1, 2015
Grain Market Outlook
as “El Nino” may cause production problems for
corn and other coarse grains in parts of the U.S., South America, Australia, India, and elsewhere in the next 6‐
18 months. Low feedgrain prices – resulting in lower input costs for U.S. and Foreign livestock feeding and
bioenergy users ‐ have helped to increase profitability for corn‐using industries, and led to increased feedgrain
usage. A combination of these production and demand impacts over time are likely to eventually cause a
change in the prevailing “large crop – low price” market scenario in U.S. and World coarse grain markets.
USDA U.S. Corn Market Forecast: The USDA projected lower U.S. corn production, higher usage, moderately
tighter ending stocks and stocks‐to‐use, and marginally lower U.S. corn prices for “new crop” MY 2015/16 than
for “old crop” MY 2014/15. Projected 2015 U.S. corn production of 13.686 billion bushels (bb) is up 156 million
bushels (mb) from July, but still down from 14.216 bb in 2014, with total supplies of 15.488 bb in “new crop”
MY 2015/16 being up from 15.477 bb in “old crop” MY 2014/15. Record forecast MY 2015/16 total corn usage
of 13.775 bb (up from 13.705 bb in MY 2014/15), includes ethanol use of 5.250 bb (up 50 mb vs MY 2014/15),
non‐ethanol FSI use of 1.375 bb (up 20 mb vs last year), exports of 1.850 bb, and feed and residual use of 5.300
bb. Ending stocks are forecast at 1.713 bb (12.4% S/U) in “new crop” MY 2015/16 – down from 1.772 bb
(12.9% S/U) in “old crop” MY 2014/15, but still up from 1.232 bb (9.2% S/U) in MY 2013/14, and 821 mb (7.4%
S/U) in MY 2012/13. “New crop” MY 2015/16 U.S. avg. cash prices are forecast in the range of $3.35‐$3.95
/bu. (midpoint of $3.65) versus to $3.65‐$3.75 /bu ($3.70 midpoint) in MY 2014/15, and $4.46 in MY 2013/14.
KSU U.S. Corn Market Forecasts: Projected supply‐demand and price scenarios by KSU for “new crop” MY
2015/16 are as follows: a) “2015 Normal Crop 13.568 bb Production” Scenario (40% prob.): 88.897 ma
planted, 81.000 ma harvested, yield of 167.5 bu/ac, 2015 U.S. corn production of 13.568 bb, total supplies of
15.370 bb, total use of 13.775 bb, ending stocks of 1.595 bb, 11.6% S/U, & $4.25 /bu U.S. corn MYA prices; b)
“2015 Smaller Normal Crop 13.365 bb Production” Scenario (50% prob.): 88.897 ma planted, 81.000 ma
harvested, yield of 165.0 bu/ac, 2015 U.S. corn production of 13.365 bb, total supplies of 15.167 bb, total use
of 13.700 bb, ending stocks of 1.467 bb, 10.7% S/U, & $4.35 /bu U.S. corn MYA prices; and c) “2015 Short Crop
12.555 bb Production” Scenario (10% prob.): Planted / harvested acres same as scenarios (a) & (b), but with a
KSU low yield of 155.0 bu/ac, U.S. corn production of 12.555 bb, total supplies of 14.317 bb, total use of
13.415 bb, ending stocks of 902 mb, 6.72% S/U, & $6.90 /bu U.S. corn MYA prices.
World Corn Supply‐Demand: World total supplies of 1,183 million metric tons (mmt) are projected for “new
crop” MY 2015/16, up from 1,181 mmt in “old crop” MY 2014/15, and 1,128 mmt in MY 2013/14. Projected
World corn ending stocks of 195.1 mmt (19.8% S/U) in “new crop” MY 2015/16 are down marginally from
197.4 mmt (20.1% S/U) in “old crop” MY 2014/15, but up from 175.0 mmt (18.4% S/U) in MY 2013/14.
Page | 2
I. U.S. Corn Market Situation and Outlook
I‐A. August USDA Reports & “New Crop” MY 2015/16 Projections
On August 12th the USDA National Agricultural Statistics Service (NASS) in its Crop Production report
made its’ first projection of 2015 U.S. corn production as of August 1, 2015 that was based on actual farmer
surveys and field trials. 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
corn 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 September 1, 2015
and will last through August 31, 2016.
I‐B. CME DEC 2015 & MAY 2016 Corn Futures Trends
The CME DECEMBER 2015 corn contract is now the “lead” corn futures contract – representing “new crop”
2015 corn market price prospects. Local basis adjustments are now being made off DEC 2015 corn futures for
spot cash corn and grain sorghum price bids in North America as well as other World grain markets. The “new
crop” DECEMBER 2015 corn futures market contract initially responded in a “very negative” manner to the
information in the August 12th USDA reports, but in the days afterward have trended “first higher then
sideways”. 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.
On the day of the report – Wednesday, August 12th – Chicago Mercantile Exchange (CME) DECEMBER 2015
corn futures prices opened at $3.87 ¾ per bushel, and traded in a range of $3.57 ½ ‐ $3.93 ½ during the
session, before settling at $3.68 – down $0.19 ½ for the day (Figure 1). Since then, DECEMBER 2015 Corn has
traded from a low of $3.65 ½ on Monday, August 24th to a high of $3.86 ¾ on Tuesday, August 25th to before
closing at $3.75 ¼ on Monday, August 31st.
Figure 1. DECEMBER 2015 & MAY 2016 CME Corn Futures Price Charts …
September 22, 2016
Grain Market Outlook
t remains of 2016 through mid‐
2017 include: 1) the pace and timing of U.S. farmer marketing of the 2016 corn crop – much of which will be
placed in storage after fall harvest, 2) anticipation of continued strong use of carryover 2015 and new 2016
crop U.S. corn in domestic U.S. ethanol production and livestock feeding, 3) at least moderate strength in U.S.
corn exports – driven largely by a poor harvest and lack of exportable supplies in Brazil in 2016, and 4) the
possibility of broader U.S. and Foreign economic and/or financial system disruptions impacting grain, energy,
and other commodity markets. For example, unanticipated U.S. financial policy announcements by the U.S.
Federal Reserve could affect U.S. interest rates, or geo‐political events could occur that would “shock” World
energy and grain markets.
USDA Supply‐Demand Forecast for “New Crop” MY 2016/17: With USDA projections of 2016 U.S. corn
plantings of 94.148 ma (up 6.149 ma from 2015), harvested acres of 86.550 ma (up 5.801 ma from 2015),
record high projected yields of 174.4 bu/ac (vs 168.4 bu/ac in 2015 and the current record high of 171.0 bu/ac
in 2014), 2016 U.S. corn production is forecast to be a record high 15.093 bb – up from 13.601 bb in 2015, the
current record of 14.216 bb in 2014, and 13.829 bb in 2013.
With forecast “new crop” MY 2016/17 total supplies of 16.859 bb (record high), total use of 14.475 bb (record
high), and projected ending stocks of 2.384 bb (16.47% S/U) – up from 1.716 bb (12.54% S/U) in “old crop” MY
2015/16 and the highest since 4.259 bb (54.90% S/U) in MY 2004/05 – U.S. corn prices are projected by the
USDA to be in the range of $2.90‐$3.50 (midpoint = $3.20 /bu) – being down from $3.60 /bu for “old crop” MY
2015/16. This scenario is given a 50% likelihood of occurring by KSU Extension Ag Economist D. O’Brien.
KSU Forecasts for “New Crop” MY 2016/17: Three alternative KSU‐Scenarios for U.S. corn supply‐demand and
prices are presented for “new crop” MY 2016/17, with each assuming a lower U.S. corn yields and production
than the September 12th USDA WASDE report.
Page | 2
KSU Scenario A) “Minor Crop Problems – 14.9 bb” Scenario (30% probability) assumes: 94.148 ma planted,
86.550 ma harvested, 172.0 bu/ac yield, 14.887 bb production, 16.653 bb total supplies, 14.450 bb total use,
2.203 bb ending stocks, 15.25% S/U, & $3.35 /bu U.S. corn average price for “new crop” MY 2016/17;
KSU Scenario B) “Moderate Crop Problems – 14.5 bb” Scenario (35% probability) assumes: 94.148 ma
planted, 86.550 ma harvested, 168.0 bu/ac yield, 14.540 bb production, 16.306 bb total supplies, 14.344 bb
total use, 1.962 bb ending stocks, 13.68% S/U, & $3.50 /bu U.S. corn avg. price for “new crop” MY 2016/17;
KSU Scenario C) “More Serious Crop Problems – 14.2 bb” Scenario (10% probability) assumes: 94.148 ma
planted, 86.550 ma harvested, 164.0 bu/ac yield, 14.194 bb production, 15.190 bb total supplies, 14.239 bb
total use, 1.721 bb ending stocks, 12.09% S/U, & $3.80 /bu U.S. corn avg. price for “new crop” MY 2016/17;
World Corn Supply‐Demand: World corn production of 1,026.6 million metric tons (mmt) is projected for “new
crop” MY 2016/17, up from 959.0 mmt in “old crop” MY 2015/16, and up from 1,013.6 mmt in MY 2014/15.
World corn total supplies of 1,235.9 mmt are projected for “new crop” MY 2016/17, up from 1,167.3 mmt in
“old crop” MY 2015/16, and up from 1,188.9 mmt in MY 2014/15. World corn exports of 139.8 mmt are
projected for “new crop” MY 2016/17, up from 119.2 mmt in “old crop” MY 2015/16, but down from 141.7
mmt in MY 2014/15. Projected World corn ending stocks of 219.5 mmt (21.6% S/U) in “new crop” MY 2016/17
are up from 209.25 mmt (21.8% S/U) in “old crop” MY 2015/16, and from 208.3 mmt (21.2% S/U) in MY
2014/15.
Brazil corn production in “old crop” MY 2015/16 (1st crop harvested in January‐May 2016, 2nd crop harvested
in May‐August) is estimated to be 67.0 mmt, down 18.0 mmt (down 21.2%) from 85.0 mmt in MY 2014/15.
This shortfall in Brazilian corn production in 2016 has provided some support for U.S. corn exports and even
ethanol production (via exports). But expectations of a record large 2016 U.S. corn crop have had a
predominant negative impact on U.S. corn market prices to date. Brazilian corn production is forecast by the
USDA to rebound back to 82.5 mmt in MY 2016/17 (2017 production).
China corn production in “new crop” MY 2016/17 (harvested in September‐October 2016) is estimated to be
216.0 mmt, down 8.6 mmt (down 3.8%) from 224.6 mmt in MY 2015/16, but marginally higher than 215.65
mmt in MY 2014/15. Most of the focus in World corn markets is on Chinese ending stocks. Ending stocks of
corn in China are projected to be 103.65 mmt (45.9% SU) in “new crop” MY 2016/17, down from 110.7 mmt
(50.9% S/U) in “old crop” MY 2015/16, but up from 110.5 mmt (49.7% S/U) in MY 2014/15.
…
October 19, 2016
Grain Market Outlook
affect the U.S. corn market in what remains of 2016 through mid‐
2017 include: 1) the pace and timing of U.S. farmer marketing of the 2016 corn crop – much of which will be
placed in storage after fall harvest, 2) anticipation of continued strong use of “new crop” 2016 U.S. corn in
domestic U.S. ethanol production and livestock feeding, 3) at least moderate strength in U.S. corn exports –
driven partly by a poor harvest and lack of exportable supplies in Brazil in 2016 as well as other World corn
market factors, and 4) the always present possibility of broader U.S. and Foreign economic and/or financial
system disruptions impacting grain, energy, and other commodity markets in later 2016 and 2017.
For example, unanticipated U.S. financial policy announcements by the U.S. Federal Reserve could affect U.S.
interest rates which could affect U.S. corn exports. Also, World geo‐political events could provide an
unanticipated “shock” to U.S. and World energy and grain markets – with the impact on the direction of U.S.
and World corn markets being difficult to anticipate.
USDA Supply‐Demand Forecast for “New Crop” MY 2016/17: With USDA projections of 2016 U.S. corn
plantings of 94.490 ma (up 6.491 ma from 2015), harvested acres of 86.836 ma (up 6.087 ma from 2015),
record high projected yields of 173.4 bu/ac (vs 168.4 bu/ac in 2015 and the previous record high of 171.0
bu/ac in 2014), 2016 U.S. corn production is forecast to be a record high 15.057 bb – up from 13.601 bb in
2015, the current record of 14.216 bb in 2014, and 13.829 bb in 2013.
With forecast “new crop” MY 2016/17 total supplies of 16.845 bb (record high), total use of 14.525 bb (record
high), and projected ending stocks of 2.320 bb (15.97% S/U) – up from 1.738 bb (12.72% S/U) in “old crop” MY
2015/16 and the highest since 4.259 bb (54.90% S/U) in MY 2004/05 – U.S. corn prices are projected by the
USDA to be in the range of $2.95‐$3.55 (midpoint = $3.25 /bu) – being down from $3.61 /bu for “old crop” MY
2015/16. This scenario is given a 70% likelihood of occurring by KSU Extension Ag Economist D. O’Brien.
Page | 2
Alternative KSU Forecasts for “New Crop” MY 2016/17: Two alternative KSU‐Scenarios for U.S. corn supply‐
demand and prices are presented for “new crop” MY 2016/17, each gauging the likelihood of lower U.S. corn
yields and production than projected by the USDA in the October 12th USDA WASDE report.
KSU Scenario A) “172.5 bu/ac – 14.979 bb” Scenario (25% probability) assumes: 94.490 ma planted, 86.836
ma harvested, 172.5 bu/ac yield, 14.979 bb production, 16.717 bb total supplies, 14.525 bb total use, 2.192 bb
ending stocks, 15.09% S/U, & $3.35 /bu U.S. corn average price for “new crop” MY 2016/17;
KSU Scenario B) “171.0 bu/ac – 14.849 bb” Scenario (5% probability) assumes: 94.490 ma planted, 86.836 ma
harvested, 171.0 bu/ac yield, 14.849 bb production, 16.637 bb total supplies, 14.525 bb total use, 2.112 bb
ending stocks, 14.54% S/U, & $3.45 /bu U.S. corn average price for “new crop” MY 2016/17;
World Corn Supply‐Demand: Record high World corn production of 1,025.7 million metric tons (mmt) is
projected for “new crop” MY 2016/17, up from 959.1 mmt in “old crop” MY 2015/16, and up from 1,014.4
mmt in MY 2014/15.
Record high World corn total supplies of 1,235.7 mmt are projected for “new crop” MY 2016/17, up from
1,168.1 mmt in “old crop” MY 2015/16, and from 1,189.7 mmt in MY 2014/15. World corn exports of 143.8
mmt are projected for “new crop” MY 2016/17, up from 119.5 mmt in “old crop” MY 2015/16, and from 141.7
mmt in MY 2014/15. Projected World corn ending stocks of 216.8 mmt (21.3% S/U) in “new crop” MY 2016/17
are up from 210.9 mmt (21.9% S/U) in “old crop” MY 2015/16, and from 208.9 mmt (21.3% S/U) in MY
2014/15. Although World corn ending stocks are projected to be a record high in “new crop” MY 2016/17 at
216.8 mmt, World corn percent ending stocks‐to‐use in “new crop” MY 2016/17 are forecast to actually
decline to 21.3% ‐ indicative of expected continued strong World demand for corn at low prices – especially in
Europe where grain production has been hampered by extreme weather conditions.
Brazil corn production in “old crop” MY 2015/16 (1st crop harvested in January‐May 2016, 2nd crop harvested
in May‐August) is estimated to be 67.0 mmt, down 18.0 mmt (down 21.2%) from 85.0 mmt in MY 2014/15.
This shortfall in Brazilian corn production in 2016 has provided support for U.S. corn exports and even ethanol
production (via exports). However, expectations of a record large 2016 U.S. corn crop have had a predominant
negative impact on U.S. corn market prices through late summer and early fall. Brazilian corn production is
forecast by the USDA to rebound back to 83.5 mmt in MY 2016/17 (2017 production). Uncertainty about
Brazilian corn production prospects in 2017 could be a major factor impacting U.S. and World corn prices in the
coming spring and summer months of 2017.
China corn production in “new crop” MY 2016/17 (harvested in September‐October 2016) is estimated to be
216.0 mmt, down 8.6 mmt (down 3.8%) from 224.6 mmt in MY 2015/16, but marginally higher than 215.65
mmt in MY 2014/15. A major focus in World corn markets is on the size of Chinese ending stocks and on
recent changes in China’s domestic corn stock management policies. Ending stocks of corn in China are
projected to be 103.7 mmt (45.9% SU) in “new crop” MY 2016/17, down from 110.7 mmt (50.9% S/U) in “old
crop” MY 2015/16, but up from 100.5 mmt (49.7% S/U) in MY 2014/15. Over the last three marketing years,
percent ending stocks‐to‐use of corn for China ranging from 49.7% to 50.9% are the highest since MY 2002/03
(51.6%). During the interim MY 2003/04 to MY 2013/14 period, Chinese corn percent ending stocks‐to‐use
averaged 30.5%, ranging from 25.2% to 39.1%.
…