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March 19, 2014
Grain Market Outlook
I‐C. U.S. Corn Supply‐Demand for the “Current” 2013/14 Marketing Year
U.S. Corn 2013 Acres, Yield & Production
The USDA again left unchanged its projection of 2013 U.S. corn production of 13.925 billion bushels (bb),
up from a drought‐affected short crop of 10.780 bb in 2012. This USDA projection is based on record high
planted acreage of 95.365 million acres (ma), and harvested acreage of 87.668 ma (Table 1 and Figure 2). The
USDA also maintained its projection of an average U.S. corn yield of 158.8 bushels per acre (bu/ac). The
January‐March USDA 2014 projection of 158.8 bu/ac in average 2013 U.S. corn yields is down from the USDA’s
projection at the February 22, 2013 USDA Outlook Forum of 163.6 bu/ac (Table 1 and Figure 3).
Projected 2013 U.S. corn production of 13.925 bb remains a record high, being up 3.145 bb ( 29%) from
10.780 bb in 2012, and up 13% from 12.360 bb in 2011 (Table 1). If further changes are eventually made by
the USDA in its projection of 2013 U.S. corn production, they are unlikely to occur until the 2014 Crop
Production Summary is released in January 2015 if the USDA follows its usual procedures.
U.S. Corn Total Supplies in “Current” MY 2013/14
The USDA estimates that total supplies of U.S. corn for “current” MY 2013/14 are 14.781 bb – resulting
from beginning stocks of 821 mb, projected 2013 production of 13.925 bb, and projected imports of 35 mb
(Table 1). Total supplies of 14.781 bb in MY 2013/14 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 (2nd largest), 14.182 bb in MY 2010/11 (3rd
largest), 13.517 bb in MY 2011/12, and 11.932 bb in “last year’s” MY 2012/13. Beginning stocks of 821 mb are
the lowest since 426 mb in MY 1996/97, and substantiate the tightness of U.S. corn supplies during June‐
August 2013.
U.S. Corn Total Use & Use by Category in “Current” MY 2013/14
Total Use of U.S. Corn for “current” MY 2013/14 is projected to be 13.325 bb – up 25 mb from February,
up 175 from January, up 275 mb from the December WASDE, and up 375 mb from November, while being up
19.9% from 11.111 bb in “last year’s” MY 2012/13 (Table 1 and Figures 4 & 6). United States’ total corn use of
13.325 bb in “current” MY 2013/14 would be the highest on record, comparable to 12.737 bb in MY 2007/08
(4th highest), 12.056 bb in MY 2008/09, 13.066 bb in MY 2009/10 (2nd highest), 13.055 bb in MY 2010/11 (3rd
highest), 12.528 bb in MY 2011/12, and 11.111 bb in “last year’s” MY 2012/13.
U.S. Ethanol Production and Corn Usage: Projected U.S. corn use for ethanol production of 5.000 bb in
“current” MY 2013/14 is up from 4.648 bb in “last year’s” MY 2012/13, while being equal to 5.000 bb in MY
MAY 2014 CME eCorn Futures
July 18, 2013 – March 18, 2014
Close of $4.86 ¼ on Fri., March 18th
December 2014 CME eCorn Futures
July 18, 2013 – March 18, 2014
Close of $4.87 ¾ on Fri., March 18th
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2011/12. 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 4.637‐5.262 bb on a weekly basis since early September 2013 ‐ the beginning of the “current”
2013/14 marketing year – averaging a projection of 4.993 bb for “current” MY 2013/14 over the September
2013 – March 7, 2014 time period. This projection of 4.993 bb is consistent to USDA’s March 2014 WASDE
report estimate of 5.000 bb of corn to be used for ethanol production during “current” MY 2013/14.
U.S. Corn Use as Distillers Grains: An estimate of the U.S. corn equivalent amounts of distillers grains
(DDGS) use for direct livestock feeding and exports is p …
March 18, 2015
Grain Market Outlook
rrent crop” MY
2014/15 wheat exports to the lowest level since MY 2009/10. Wheat prices in the U.S. are projected at a four
year low due to reduced U.S. exports and domestic livestock wheat feeding, and growing ending stocks.
No other major production problems in competing World wheat exporting countries have yet emerged to the
degree that the prevailing “large crop‐over‐supply” situation in World wheat markets has changed. However,
there are continued concerns about potential wheat export supply availability from the Black Sea region, and
the ongoing possibility of crop problems developing in 2015 among major World wheat producers / exporters.
United States’ wheat exports have been limited by a recent strong positive trend in the U.S. dollar.
USDA U.S. Wheat Forecast for “Current Crop” MY 2014/15: The USDA maintained its projection of lower 2014
U.S. wheat production, reduced total use, increased ending stocks and % stocks‐to‐use, and lower prices in
“current crop” MY 2014/15 vs a year ago. The USDA’s projected “current crop” MY 2014/15 scenario is for a
2.026 billion bushel (bb) 2014 U.S. wheat crop, 2.776 bb total supplies, 900 million bushel (mb) exports, 2.085
bb total use, 691 mb ending stocks, 33.1% ending stocks‐to‐use, and a forecast U.S. price of $6.00 /bu ($5.90
to $6.10) – compared to $6.87 in MY 2013/14, $7.77 (record) in MY 2012/13, and $7.24 in MY 2011/12.
USDA U.S. Wheat Forecast for “Next Crop” MY 2015/16: At the 2015 USDA Agricultural Outlook Forum, the
USDA projected that supply‐demand balances and prices in “next crop” MY 2015/16 would be as follows: 55.5
million acres (ma) planted, 47.0 ma harvested, 45.2 bu/ac yield, 2.125 bb production, 2.966 bb total supplies,
975 mb exports, 2.204 bb total use, 762 mb end stocks, 34.6% S/U, and a $5.10 /bu U.S. average price.
KSU U.S. Wheat Forecast for “Next Crop” MY 2015/16: KSU projections of “next crop” MY 2015/16 supply‐
demand balances and prices are represented in two alternative “Trend Yield” and “Short Yield” scenarios as
follows. A) “Trend Yield” Scenario: 60% prob. of 55.500 ma planted, 46.668 ma harvested, 45.9 bu/ac trend
yield, 2.142 bb production, 2.983 bb total supplies, 1.050 bb exports, 2.254 bb total use, 729 mb end stocks,
32.3% S/U, and $5.75 /bu U.S. average price. B) “Short Yield” Scenario: 40% prob. of 55.500 ma planted,
46.668 ma harvested, 43.5 bu/ac low yield, 2.030 bb production, 2.876 bb total supplies, 1.025 bb exports,
2.224 bb total use, 652 mb end stocks, 29.3% S/U, and $6.25 /bu U.S. avg. price. Key factors in these KSU
forecasts are the levels of U.S. wheat yields and production, and a moderate recovery in U.S. wheat exports.
USDA World Wheat: World wheat total supplies of 912.3 mmt in “current crop” MY 2014/15 are up from
891.7 mmt in MY 2013/14, and 855.4 mmt in MY 2012/13. Projected World wheat ending stocks in “current
crop” MY 2014/15 of 197.7 mmt (27.7% S/U) are up from 187.5 mmt (26.6% S/U) in MY 2013/14, and from
175.6 mmt (25.8% S/U) in MY 2012/13. For perspective, these figures can be compared to the historic World
wheat ending stocks and ending stocks‐to‐use minimums of 129.7 mmt and 21.1% S/U in MY 2007/08.
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I. U.S. Wheat Market Situation & Outlook
I‐A. March USDA Reports & “Current Crop” MY 2014/15 Projections
On March 10th the USDA World Agricultural Outlook Board (WAOB) released its March 2015 World
Agricultural Supply and Demand Estimates (WASDE) report – containing U.S. and World wheat supply‐
demand and price projections for both the 2013/14 as well as for “current crop” 2014/15 marketing years. The
U.S. wheat “current crop” 2014/15 marketing year began on June 1, 2014 and will last through May 31, 2015,
with the “new crop” 2015/16 marketing year beginning on June 1, 2015.
I‐B. CME Hard Red Winter Wheat Futures & U.S. Dollar Index Trends
Since market highs of $7.07 ¼ per bushel on December 18, 2014, the CME MAY 2015 Kansas hard red
winter wheat futures contract has trended sharply lower – falling first to a low of $5.35 on February 2, 2015.
Then after rising to a high of $5.83 ¼ on February 17, 2015, MAY 2015 futures fell again to $5.16 ¼ on March
5th. CME MAY 2015 Kansas HRW Wheat futures prices responded to the release of the March 10th USDA
reports by trading higher for the day. MAY 2015 HRW wheat efutures prices opened at $5.30 ¾ on Tuesday,
March 10th. The USDA reports were released at midday (i.e., 11 a.m., central time). That day prices traded as
low as $5.22 ½ and as high as $5.39 ¼ per bushel during the session before closing $0.05 ½ higher for the day
at $5.36 /bu (Figure 1).
Since the March 10th USDA report, CME MAY 2015 Kansas HRW wheat futures have traded in a generally
higher but increasingly volatile pattern due to a) weather and winter wheat development concerns in the U.S.
central and southern plains region, b) volatility in the U.S. dollar – impacting U.S. wheat export prospects, and
c) repositioning of futures traders. Although concerns about Black Sea geopolitical conflicts and future
availability of wheat exports from that region of the World are legitimate, they have at least not yet tangibly
affected the World wheat export trade to the degree that U.S. wheat exports and prices have been positively
affected. Recently, CME MAY 2015 Kansas HRW Wheat has risen to a high of $5.57 ½ on Monday, March 16th,
before closing at $5.42 ¾ on Tuesday, March 17th.
Figure 1. MAY 2015 & JULY 2015 CME Kansas Wheat Futures Price Charts (electronic trade) …
March 21, 2014
Grain Market Outlook
rage soybean prices by $0.25 per bushel.
The soybean market has recently focused on South American soybean production and logistical issues, reports
of potential livestock disease and feed demand problems in China, and the ongoing strong pace of U.S.
soybean export shipments and sales. While MAY 2014 soybean futures have been trading as high as $14.60
per bushel, “next crop” NOV 2014 futures have been trading as nearly as high as $12.00 – reflecting the
expectation of a large 2014 South American crop to be harvested and sold into export channels to compete
with U.S. exports later in the spring and summer months.
USDA Soybean Projection for “Current” MY 2013/14: With a 5 million bushel (mb) increase in imports to 35
mb, the USDA raised its forecast of “current” MY 2013/14 U.S. soybean total supplies (3.464 billion bushels or
‘bb’ – up 5 mb). Changes in domestic crush (1.690 bb – down 10 mb), exports (1.530 bb – up 20 mb to a record
high), and total use (3.319 bb – up 10 mb), resulted in “current” ending stocks projected at 145 mb (down 5
mb) – still up from 141 mb in “last year’s” MY 2012/13, but down from 169 mb in MY 2011/12. Projected %
ending stocks‐to‐use of 4.37% are record low compared to 4.55% in “last year’s” MY 2012/13, and 5.35% in MY
2011/12. The USDA projected U.S. soybean prices for “current” MY 2013/14 to be $12.20‐$13.70 /bu
(midpoint = $12.95), up $0.25, but still down from the record high of $14.40 in “last year’s” MY 2012/13.
KSU & USDA U.S. Soybean Forecasts for “Next Crop” MY 2014/15: KSU projections of 2014 U.S. soybean
production and “next crop” MY 2014/15 supply‐demand and price scenarios are: a) KSU “Low Production”
Scenario: 20% prob., 77.5 ma planted, 76.5 ma harvested, 40.0 bu/ac yields, a 3.060 bb 2014 U.S. soybean
crop, 4.5% S/U, & $14.00‐$15.00/bu; b) KSU “Likely Production” Scenario: 60% prob. of 79.0 ma planted, 78.0
ma harvested, 43.0 bu/ac yields, a 3.355 bb 2014 U.S. soybean crop, 7.29% S/U, & $9.90‐$10.90/bu; and c) KSU
“High Production” Scenario: 20% prob. of 80.5 ma planted, 79.5 ma harvested, 45.0 bu/ac yields, a 3.578 bb
2014 U.S. soybean crop, 9.78% S/U, & $8.50‐$9.50/bu. The “next crop” MY 2014/15 projection from the
February 21st USDA Agricultural Outlook Conference with updates made by KSU for March 10th WASDE
beginning stocks and prices would indicate the following for the coming year: 79.5 ma planted, 78.5 ma
harvested, a record high 45.2 bu/ac yield, a 3.550 bb 2014 U.S. soybean crop, 8.16% S/U, & an approximate
price of $9.85 /bu. These initial USDA 2014 U.S. soybean production estimates are subject to change.
World Soybeans: Projected World total supplies of 343 mmt in “current” MY 2013/14 are up from 321 mmt in
“last year’s” MY 2012/13, and from 310 mmt in MY 2011/12. Projected World soybean ending stocks of 70.6
mmt (26.2% S/U) in “current” MY 2013/14 are up from 57.8 mmt (22.3% S/U) in “last year’s” MY 2012/13, and
from 53.5 mmt (20.8% S/U) in MY 2011/12, being comparable to a low 19.5% S/U in MY 2008/09.
Market Perspective: U.S. soybean prices have been supported by Chinese export demand, recent problems in
South American soybean production, and by U.S. farmer’s “holding” of soybeans in storage. Weakness or at
least “moderation” in soybean prices is likely to occur in the spring‐summer of 2014 if a record high 2014
South American soybean crop is produced and moved into export channels in a timely manner, and if
prospects develop through the summer months for a large 2014 U.S. soybean crop to be produced.
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I. U.S. Soybean Market Situation and Outlook
I‐A. March 2014 USDA Reports & Projections for “Next Crop” MY 2014/15
The United States Department of Agriculture (USDA) Interagency Commodity Estimates Committees for
Wheat, Feedgrains, Rice and Oilseeds released their GRAINS AND OILSEEDS OUTLOOK FOR 2014 at the 2014
Agricultural Outlook Forum on Friday, February 21st. This is the first formal USDA projection of U.S. grain
supply‐demand factors and prices based on current 2014 market information. The USDA had released
Agricultural Baseline projections through 2023 on February 13th that included a projection for the “next crop”
2014/15 marketing year, along with U.S. grain supply‐demand and price projections through MY 2023/24.
However, those initial baseline estimates were based on grain market information available in November
2013, and were adjusted by the USDA in its February 21st Agricultural Outlook Conference projections.
On March 10, 2014 the USDA released its monthly March 2014 World Agricultural Supply and Demand
Estimates (WASDE) report – containing information of importance to U.S. soybean market price prospects.
The USDA National Agricultural Statistical Service (NASS) also released its monthly March Crop Production
report which contained no changes in projected production of U.S. soybeans for 2013 or previous years. If the
USDA follows its past practices, it will not make further adjustments in its projection for U.S. soybean supply‐
demand and prices for “next crop” MY 2014/15 until it releases the May 9th WASDE report.
However, grain market information concerning a) “current” MY 2013/14 U.S. soybean usage, ending
stocks, and prices, and b) foreign soybean supply‐demand prospects, has an impact on prospects for U.S.
soybean supply‐demand and prices during the “next year” 2014/15 marketing year. In this article the USDA’s
U.S. soybean supply‐demand and price prospects for the coming 2014/15 marketing year were adjusted using
ending stocks estimates from the March WASDE report, with marginal adjustments also made in forecast
prices reflecting changes in “next crop” marketing year ending stocks‐to‐use.
I‐B. Soybean Futures Trends Since the March 10th Reports
“Last year’s crop” soybean futures market contracts (i.e., May and July 2014 Chicago Board of Trade
soybean futures) responded to the information in these March 10th USDA reports by moving lower. On the day
of the report – Monday, March 10th – Chicago Board of Trade (CBOT) MAY 2014 soybean futures prices
opened at $14.54 ½ per bushel, and traded as high as $14.56 ¼ and as low as $14.14 during the session, before
settling at $14.86 ¾ – down $0.39 for the day (Figure 1).
Figure 1. May 2014 and November 2014 CME Soybean Futures Price Charts (electronic trade) …
June 25, 2018
Grain Market Outlook
rojected at arecord high 5.675 bb in “new crop” MY 2018/19, up from 5.575 bb a year ago, and 5.432 bb two
years ago. Non‐ethanol Food, Seed and Industrial usage is projected to be record high 1.490 bb – up from
1.465 bb and 1.451 bb the previous two (2) marketing years (Table 1, Figure 7).
Exports of U.S. corn are projected to be 2.100 bb in “new crop” MY 2018/19 – down from the 11‐year high
(Table 1, Figures 7 & 10) of 2.300 bb in “old crop” MY 2017/18, and 2.293 bb in MY 2016/17 . During the eight
(8) previous years, U.S. corn exports averaged 1.702 bb – ranging from 730 mb to 1.979 bb. This “new
plateau” in the exports for My 2016/17 through projected “new crop” MY 2018/19 illustrates the recent
strength of U.S. corn exports and their contribution to U.S. corn usage. Improved U.S. corn export prospects
are expected partly as a result of 2018 corn production problems for export competitors Argentina and Brazil.
United States’ corn feed and residual use is projected to be 5.350 bb in “new crop” MY 2018/19 as a result
of anticipated high levels of overall U.S. livestock production in the remainder of 2018 and 2019, as well as
expectations on only moderate strength in U.S. corn prices (Table 1, Figures 7 & 9). This feed use amount of
5.350 bb in “new crop” MY 2018/19 would be down from the 11‐year high of 5.500 bb in “old crop” MY
2017/18, and down from 5.472 bb in MY 2016/17, but up from an average of 4.902 bb the previous 8
marketing years.
Fourth, expectations are that U.S. corn ending stocks in “new crop” MY 2018/19 will decline considerably
from a year earlier – down to 1.577 bb, and that percent (%) ending stocks‐to‐use will drop to 10.79% as a
result of moderately tighter total U.S. corn supplies and continued strong total U.S. corn use (Table 1, Figures
11‐12). These figures compare to 2.102 bb ending stocks and 14.16% stocks/use in “old crop” MY 2017/18,
and to 2.293 bb ending stocks and 15.65% stocks/use in MY 2016/17.
Fifth, from late June through Fall 2018 the path of U.S. corn prices will be largely driven by the prospects
for the 2018 U.S. corn crop – particularly as crop size information becomes available in the August, September
and November USDA National Agricultural Statistics Service (NASS) reports on U.S. Crop Production. The
Page | 3
USDA projects that in “new crop” MY 2018/19 U.S. corn prices will range from $3.40‐$4.40 per bushel – with a
midpoint forecast of $3.90 per bushel (/bu) (Table 1a). If U.S. corn prices were to average $3.90 in “new crop”
MY 2018/19, it would be the highest price in five (5) years since $4.46 /bu in MY 2013/14 – the year of
recovery following the catastrophic U.S. Corn Belt drought of MY 2012/13 when U.S. corn prices averaged a
record high $6.89 /bu. Expected higher U.S. corn prices in “new crop” MY 2018/19 is evidence of the impact of
lower 2018 U.S. corn acreage and prospects for strong usage.
The U.S. corn supply‐demand and price scenario presented by the USDA in the June 12, 2018 World
Agricultural Supply and Demand Estimates (WASDE) report is given a 50% likelihood of occurring by KSU
Extension Agricultural Economist Kansas State University (Table 1a).
Sixth, when considering alternative outcome scenarios from the USDA’s June 12th forecast, IF for whatever
reason during July‐August 2018 there were a 200‐500+ mb reduction in 2018 U.S. corn production prospects
down to 13.500‐13.900 bb, THEN projected U.S. corn ending stocks in “new crop” MY 2018/10 would likely
decline to 1.250‐1.400 bb with some price rationing of usage (Table 1a). In this situation, percent (%) ending
stocks‐to‐use likely fall below 10% stocks/use, with U.S. corn prices moving above $4.00 toward $4.35‐$4.50
per bushel. This point is further discussed in Section 3 that follows, where alternative scenarios and outcomes
for U.S. corn supply‐demand and prices are presented for “new crop” MY 2018/19.
3. Alternative KSU Supply‐Demand & Price Forecast for “New Crop” MY 2018/19
Three alternative KSU‐Scenarios to the USDA’s forecast for U.S. corn supply‐demand and prices are
presented in what follows for “new crop” MY 2018/19 (Table 1a). These projections show how varying 2018
U.S. corn production and export / total use scenarios could affect U.S. corn supply‐demand and price outcomes
in “new crop” MY 2018/19. Probability‐weights are added to reflect judgements about how likely each
scenario is to occur in “new crop” MY 2018/19, i.e., during the September 1, 2018 through August 31, 2019
time period.
A ‐ KSU “Higher 2018 U.S. Corn Production” Scenario for “new crop” MY 2018/19: (25% probability):
Assumptions are as follows: 88.026 ma planted, 80.846 ma harvested, 176.0 bu/ac record yield (near the
2017 record high), 14.229 bb production, 16.381 bb total supplies, 14.666 bb total use, 1.715 bb ending
stocks, 11.69% S/U, & $3.75 /bu U.S. corn average price;
B ‐ KSU “Lower 2018 U.S. Corn Production” Scenario for “new crop” MY 2018/19: (15% probability):
Assumptions are as follows: 88.026 ma planted, 80.846 ma harvested, 165.0 bu/ac yield (near the 2009
low yield), 13.340 bb production, 15.492 bb total supplies, 14.205 bb total use, 1.287 bb ending stocks,
9.06% S/U, & $4.35 /bu U.S. corn average price.
C ‐ KSU “Higher 2018 U.S. Corn Exports” Scenario for “new crop” MY 2018/19: (15% probability):
Assumptions are as follows: 88.026 ma planted, 80.846 ma harvested, 174.0 bu/ac yield (equal to USDA
forecast yield), 14.040 bb production, 16.192 bb total supplies, 2.250 bb exports (up 250 mb from USDA),
14.865 bb total use, 1.327 bb ending stocks, 8.93% S/U, & $4.65 /bu U.S. corn average price.
6. World Corn Supply‐Demand – Both With & Without China
World Production: World corn production of 1,052.4 million metric tons (mmt) is projected for “new
crop” MY 2018/19, up 1.7% from 1,034.8 mmt in “old crop” MY 2017/18, but down 2.4% from the record high
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of 1,078.4 mmt in MY 2016/17 (Figures 13‐14a, Table 2). The “new crop” 2018/19 marketing year begins
September 1, 2018 and continues through August 31, 2019. Production in Argentina of 41.0 mmt in 2019
would be a “rebound” from the short crop of 33.0 mmt projected in 2018, and equal again to 41.0 mmt
produced in 2017. Similarly, production in Brazil of 96.0 mmt in 2019 would also be a “rebound” from the
short crop of 85.0 mmt projected in 2018, but down from 98.5 mmt in 2017. The 2018 corn harvests for
Argentina and Brazil occur in the later half of “old crop” MY 2017/18, i.e., February through August 2018.
World Total Supplies: World corn total supplies of 1,245.1 mmt in “new crop” MY 2018/19 are forecast
to be down moderately from 1,262.7 mmt in “old crop” MY 2017/18, but up from the record high of 1,288.4
mmt in MY 2016/17.
World Exports: World corn exports of a 158.0 mmt are projected for “new crop” MY 2018/19, up 4.6%
from 151.1 mmt in “old crop” MY 2017/18, but down 1% from the record high of 159.7 mmt in MY 2016/17
(Table 3).
World Ending Stocks (% Stocks/Use): Projected World corn ending stocks of 154.7 mmt (14.2% S/U) in
“new crop” MY 2018/19 are down 19.7% from 192.7 mmt (18.0% S/U) in “old crop” MY 2017/18, down 32.1%
from the record high 227.9 mmt (21.5% S/U) in MY 2016/17, and 210.0 mmt (21.2% S/U) in MY 2015/16
(Figure 13‐14a, Tables 8‐9). Projected Foreign (Non‐U.S.) corn ending stocks of 114.6 mmt (13.1% S/U) in
“new crop” MY 2018/19, is down 16.5% from 139.3 mmt (16.5% S/U) in “old crop” MY 2017/18, and is down
from 17.7% from 169.3 mmt (20.0% S/U) in MY 2016/17.
World‐Less‐China Ending Stocks (% Stocks/Use): An alternative view of the World corn supply‐
demand is presented if Chinese corn usage and ending stocks are isolated from the World market (Figures
14b‐c, Tables 7‐9). “World‐Less‐China” corn ending stocks are projected to be 94.19 mmt (11.2% S/U) in “new
crop” MY 2018/19, down from 113.1 mmt (13.6% S/U) in “old crop” MY 2017/18, and down from 127.2 mmt
(15.4% S/U) in MY 2016/17. These figures show that World stocks‐to‐use of corn less China’s direct influence
are projected to be 21% lower (i.e., 11.2% S/U for the “World‐Less‐China” versus 14.2% S/U for the “World”
overall in “new crop” MY 2018/19).
World versus China Ending Stocks: At the same time, these figures also show that Chinese ending
stocks of corn as proportion of the World total are declining – down from 52.8% in MY 2015/16, to 44.2% in
MY 2016/17, to 41.3% in “old crop” MY 2017/18, and now are projected to be 39.1% in “new crop” MY
2018/19 (Tables 2‐9). 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
eventually increase Chinese import demand for U.S. feedgrains if and when China has a severe short crop
situation and limited stockpiles available to meet domestic demand.
…
February 13, 2019
Grain Market Outlook
Commercial Hedgers Long & Short Positions: Both the “short / sell” and “long / buy” positions of CME
Corn futures commercial hedgers have remained relatively consistent since early July 2018 (Figure 3b).
Total commercial hedger “short / sell” positions have ranged from 3.727 bb to 4.024 bb during the
12/4/2018‐1/8/2019 period, before declining to 3.638 bb in “short / sell” positions on 1/15/2019.
Typical risk management‐related grain futures transactions and positions of commercial grain
elevators and/or farmer hedgers would fall into this “short position” category. Commercial hedger
“long / buy” positions have ranged from 2.152 bb to 2.238 bb during the same period, with 2.222 bb in
“long / buy” positions on 1/15/2019. Typical risk management grain futures transactions and positions
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of commercial grain processors, ethanol plants, and livestock feeders would fall in this “long position”
category.
o …
May 22, 2017
Grain Market Outlook
Page | 3
I. U.S. Wheat Market Situation & Outlook
May 10th USDA Crop Production & WASDE Reports
On May 10th the USDA World Agricultural Outlook Board (WAOB) released its May 2017 World
Agricultural Supply and Demand Estimates (WASDE) report – containing U.S. and World wheat supply‐
demand and price projections for the 2015/16, “current” 2015/16, and “next crop” 2017/18 marketing years
(MY) for corn. The “next crop” MY 2017/18 for U.S. wheat will begin on September 1, 2017 and will last
through August 31, 2018.
Earlier, on March 31st, the USDA National Agricultural Statistics Service (NASS) (https://www.nass.usda.gov/) had
released it’s Prospective Plantings (http://usda.mannlib.cornell.edu/usda/current/ProsPlan/ProsPlan‐03‐31‐2017.pdf) and Grain
Stocks (http://usda.mannlib.cornell.edu/usda/current/GraiStoc/GraiStoc‐03‐31‐2017.pdf) reports. Planted acreage estimates from
the Prospective Plantings report were used by the USDA WAOB to develop the May 10th projection of 2017
U.S. wheat production in the WASDE report. The grain stocks estimates released on March 31st were used to
calculate U.S. corn livestock feed and residual usage in “current” MY 2016/17.
Following its normal procedures, the next supply‐demand and price forecasts for “next crop” 2017/18
from the USDA will be released in the June 9, 2017 USDA WASDE report.
CME Kansas Hard Red Winter Wheat JULY 2017 & DEC 2017 Futures
JULY 2017 CME Kansas hard red winter wheat futures traded as high as $5.70 on April 21, 2016,
and $5.69 ¾ on June 8, 2016 before declining over $1.00 per bushel by early July. Then, following
lows of $4.32 per bushel on August 31st, and $4.23 ½ on December 7, 2016, JULY 2017 CME Kansas
hard red winter wheat futures prices traded up to a high of $4.98 ¼ on February 16, 2017. From that
February 16th high, JULY 2017 CME KS HRW Wheat futures then traded lower – down to a low of
$4.11 ¼ on April 21st and up to a high of $4.74 ¾ on May 2nd before closing at $4.38 on Friday, May
19th (Figure 1).
Figure 1. JULY 2017 & DECEMBER 2017 CME Kansas Wheat Futures Daily Price Charts …
November 15, 2018
Grain Market Outlook
(ending August 31st), up 2.0% from 6.13 mmt in MY 2016/17.
These three South American countries are the main competition in global soybean export markets for the
United States. Argentina, Brazil and Paraguay are forecast to comprise 55.2% (84.55 mmt) of estimated
World soybean exports (153.19 mmt) in “old crop” MY 2017/18. The U.S. is estimated to have made up 37.8%
Page | 4
(57.95 mmt) of World soybean exports for “old crop” MY 2017/18, with other countries making up the
remaining 7.0% (10.69 mmt) (Table 3).
The trade dispute between the U.S. and China has “pushed” Chinese soybean export purchases toward
Brazil and Argentina and away from the U.S. at least temporarily until the matter is either settled OR
exportable South American supplies are eventually no longer available in fall 2018. There has been both
negative and positive news coming from these negotiations to date, with any final agreement still to come.
5. U.S. Soybean Supply‐Demand Projections for “New Crop” MY 2018/19
The USDA provided a forecast of U.S. soybean supply, demand, and prices for “new crop” MY 2018/19 In
the November 8th USDA WASDE report. Based on 2018 U.S. soybean production projections 89.145 million
acres (ma) planted, 88.343 ma harvested, and 2018 U.S. soybean average yields of 52.1 bu/ac. (down 1.0 bu/ac
from October), the USDA forecast 2018 U.S. soybean production to be 4.600 bb (down 90 mb from October).
This 2018 forecast of a record high 4.600 bb in U.S. soybean production would be up from the previous record
of 4.411 bb in 2017, and the 2nd highest amount of 4.296 bb in 2016 (Table 1, Figures 5‐6‐7).
Total Supplies of U.S. soybeans in “new crop” MY 2018/19 are forecast to be a record high 5.063 bb, based
on 438 mb in beginning stocks, 4.600 bb in production, and 25 mb in imports. This amount is up from the
previous record highs of 4.734 bb and 4.515 bb in U.S. soybean Total Supplies in “old crop” MY 2017/18 and
MY 2016/17, respectively (Table 1, Figure 7).
Soybean crush in “new crop” MY 2018/19 is forecast to be a new record high of 2.080 bb – to be driven by
expected ongoing domestic usage for livestock feed and ongoing strength …
December 21, 2018
Grain Market Outlook
Kansas Cash Soybean Price & Basis Trends
Cash soybean price bids on Thursday, December 20th in Central Kansas at major terminal elevator
locations were in the range of $7.81 ½ to $7.98 ½ per bushel ($1.12 to $0.95 under JAN 2019 CME soybean
futures). At Topeka and Atchison in Northeast Kansas, cash prices were both at $8.38 ½ per bushel ($0.55
under JAN 2019). These Central and Northeast Kansas prices on December 20th are down substantially from
$9.88 ‐ $9.93 ($0.35 to $0.30 under JULY 2018 soybean futures) on May 30th (Figure 2).
Cash soybean bids at Kansas soybean processing plants in Emporia and Wichita on December 20th ranged
from $8.38 ½ to $8.48 ½ per bushel ($0.55 to $0.45 under JAN 2019) – also down substantially from May 30th
when prices ranged from $9.86 ($0.37 under JULY 2018) to $9.93 ($0.30 under) (Figure 2).
In Western Kansas cash soybean bids at major grain elevators on December 20th ranged from $7.49 to
$7.69 per bushel ($1.45 to $1.25 under JAN 2019), down substantially again from $8.88 ($1.35 under JULY
2018 futures) to $9.23 ($1.00 under) per bushel on May 30th.
3. South American Export Competition in “Old Crop” MY 2017/18
Soybean market signals from South American export competitors Argentina, Brazil and Paraguay have
continued in their “improved” situation in recent months as a result of the U.S.‐China trade dispute (Figures
15‐16). Serious drought had caused Argentina soybean production to decline by 31.3% from a USDA estimate
of 55.0 million metric tons (mmt) in 2017 down to 37.8 mmt in 2018, and cut projected Argentine soybean
exports by 70.0% to 2.11 mmt in the “old crop” 2017/18 marketing year (MY) which ended on August 31st.
Argentina soybean meal exports were also 10.5% lower (28.01 mmt) in “old crop” MY 2017/18, down from
31.28 mmt in MY 2016/17.
However, Brazilian soybean production was higher – offsetting Argentina’s declines to a degree. Brazil is
estimated by the USDA to have produced a record high 120.3 mmt of soybeans in year 2018, up 5.0% from the
previous record of 114.60 mmt in year 2017. Brazilian soybean exports are estimated to have been 76.20 mmt
in “old crop” MY 2017/18 (ending August 31, 2018), up 20.7% from 63.14 mmt in MY 2016/17. Brazil soybean
meal exports are projected to be 16.8% higher (16.07 mmt) in MY 2017/18, up from 13.76 mmt in MY
2016/17.
Paraguay soybean production is estimated to be down marginally – providing a neutral influence to the
market. Paraguay is projected by the USDA to have produced 9.81 mmt of soybeans in year 2018 – down
moderately from 10.34 mmt in year 2017. Paraguay soybean exports are estimated to have been 6.20 mmt in
“old crop” MY 2017/18 (ending August 31st), up 1.1% from 6.13 mmt in MY 2016/17.
These three South American countries are the main competition in global soybean export markets for the
United States. Argentina, Brazil and Paraguay are forecast to comprise 55.2% (84.51 mmt) of estimated
World soybean exports (153.16 mmt) in “old crop” MY 2017/18. The U.S. is estimated to have made up 37.8%
(57.95 mmt) of World soybean exports for “old crop” MY 2017/18, with other countries making up the
remaining 7.0% (10.70 mmt) (Table 3).
Page | 5
The trade dispute between the U.S. and China has “pushed” Chinese soybean export purchases toward
Brazil and Argentina and away from the U.S. at least temporarily until the matter is either settled OR
exportable South American supplies become available again in quantity in Spring 2019. There has been both
negative and positive news coming from these negotiations to date, with any final agreement still to come.
4. U.S. Soybean Supply‐Demand Projections for “Current” MY 2018/19
The USDA provided a forecast of U.S. soybean supply, demand, and prices for “Current” MY 2018/19 In
the December 11th USDA WASDE report. Based on 2018 USDA estimates of 89.145 million acres (ma) planted,
88.343 ma harvested, and 2018 U.S. soybean average yields of 52.1 bu/ac., the USDA forecast 2018 U.S.
soybean production to be 4.600 bb. This 2018 forecast of a record high 4.600 bb in U.S. soybean production
would be up from the previous record of 4.411 bb in 2017, and also up from the 2nd highest amount of 4.296
bb in 2016 (Table 1, Figures 5‐6‐7).
Total Supplies of U.S. soybeans in “Current” MY 2018/19 are forecast to be a record high 5.063 bb, based
on 438 mb in beginning stocks, 4.600 bb in production, and 25 mb in imports. This amount is up from the
previous record highs of 4.734 bb and 4.515 bb in U.S. soybean Total Supplies in “old crop” MY 2017/18 and
MY 2016/17, respectively (Table 1, Figure 7).
Soybean crush in “Current” MY 2018/19 is forecast to be a new record high of 2.080 bb – to be driven by
expected ongoing domestic usage for livestock feed and ongoing strength …
December 30, 2020
Grain Market Outlook
FSI
Corn Ethanol Use
DDGS Livestock Feed
CornLivestock Feed
Ending Stocks
Annual …