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Corn and Wheat Market Overview and Outlook by Cory G. Walters Southern Regional Outlook Conference Agricultural Economics.

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Presentation on theme: "Corn and Wheat Market Overview and Outlook by Cory G. Walters Southern Regional Outlook Conference Agricultural Economics."— Presentation transcript:

1 Corn and Wheat Market Overview and Outlook by Cory G. Walters Southern Regional Outlook Conference Agricultural Economics

2 Grain Outlook Agricultural Economics –Key Issues 2008 is over Energy Prices Exports Global supplies Policy

3 November 2009 to October 2011 crude oil futures are trading in the 65 to 75 dollar range

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6 Acres Planted in U.S. (Millions) Agricultural Economics Crop200720082009% Change 2009-2008 Corn93.586.087.01.16 Soybean64.775.777.82.77 Wheat60.563.159.8-5.23 Total218.7224.8224.6-0.09

7 Policy HR 2454 (Waxman-Markey Bill) Effects of carbon pricing on –Fuel –Fertilizer –Grain Prices

8 Agricultural Economics USDA SUPPLY/DEMAND BALANCE SHEET FOR CORN 07-0808-09est09-10p %% Millions of Acres Acres Planted93.686.087.01.2% Acres Harvested86.578.680.11.9% Bu./Harvested Acre150.7153.9161.95.2% Millions of Bushels Beginning Stocks1,3041,6241,6954.4% Production13,03812,10112,9547.0% Total Supply14,36213,74014,6606.7% Use: Feed and Residual5,9385,350 0.0% Food, seed, & industrial4,3634,9455,47510.7% Ethanol for fuel3,0263,6754,20014.3% Exports2,4361,8502,20018.9% Total Use10,30212,04513,0258.1% Ending Stocks1,6241,6951,635-3.5% Ending Stocks, % of Use15.814.112.6-10.8% U.S. Season Avg. Farm Price, $/ Bu.$4.20$4.08$3.35-17.9% Crop year begins the first of September

9 Agricultural Economics

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13 Corn –Dec 09 is trading around $3.37 Positive carry built into market. Has been shrinking recently. –Prices Negatively effected by: –Large carry over –Higher Acreage –High yields »Good growing conditions –Weak oil prices –Where is Ethanol going? »Hit 10 percent blending wall – Expansion by E85

14 Corn Outlook Agricultural Economics Dec 10 corn is trading around $3.85 –Maybe a good price with cost of inputs dropping Safety Nets –Crop Insurance 2010 Base Price likely to be significantly lower than 2009 price –ACRE 90% of Guarantee Price - $ 3.73 per bushel

15 Agricultural Economics USDA SUPPLY/DEMAND BALANCE SHEET FOR WHEAT 07-0808-09est09-10p %% Million Acres Acres Planted60.563.159.6-5.5% Acres Harvested5155.748.9-12.2% Bu./Harvested Acre40.244.941.2-8.2% Million Bushels Beginning Stocks546306669118.6% Production2,0512,5002,016-19.4% Imports113125115-8.0% Total Supply2,6202,9302,800-4.4% Use: Food9479229553.6% Seed887978-1.3% Feed & Residual15250220-12.0% Exports1,2641,0101,25324.1% Total Use2,3142,2612,153-4.8% Ending Stocks306669647.0-3.3% Ending Stocks, % of Use13.229.630.11.6% U.S. Season Aver. Farm Price, $/ Bu.$4.26$6.48$6.703.3% Source: USDA, WASDE

16 Agricultural Economics

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19 Wheat Outlook Agricultural Economics July 10 Chicago wheat is approaching $5.00 –Lost about $2.3 per bushel since June World wheat supplies continue to grow Safety Nets –Crop Insurance Significant drop in base prices –CRC Base Price »2009 - $8.58 per bushel »2010 - $5.29 per bushel –ACRE 90 % of Guarantee price - $ 5.97 per bushel

20 Questions Agricultural Economics


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