1. Grain Market Outlook Cover Your Acres Conference Oberlin, Kansas January 22-23, 2008 Daniel OBrien & Mike Woolverton K-State Research and Extension dobrien@oznet.ksu.edu mikewool@agecon.ksu.edu mikewool@agecon.ksu.edu

2. Historic vs Current Grain Prices 2000-06 USDA Average 2007/08 Wheat $3.35 $6.45–$6.85 Corn $2.24 $3.70–$4.30 Grain Sorghum $2.20 $3.60–$4.20 Soybeans $5.66 $9.90–$10.90 Sunflowers$11.57 /cwt $19.60–$21.20 1 National marketing year average price per unit, 2000-2006.

3. Wheat Markets

4. Oberlin, KS Cash Wheat Prices Decatur Coop, Oberlin, Kansas Jan. 22, 2007 – Jan. 18, 2008 Source: DTN Bid Analyzer

5. March 2008 HRW Wheat Futures KCBT: April 2006-January 2008 2008 Old Crop March HRW Contract Contract Volume & Open Interest

6. July 2008 HRW Wheat Futures KCBT: April 2006-January 2008 2008 New Crop July HRW Contract Contract Volume & Open Interest

7. U.S. Wheat Supply-Demand

8. U.S. Wheat Planted Acreage 1973-2007 + Projected 2008 Kansas HRW Acres Seeded down by 500K in 2007/08

9. U.S. Wheat Yields 1973-2007 + Trend

10. U.S. Wheat Production 1973-2007 + Projected 2008

11. U.S. Wheat Exports 1973/74 thru 2007/08 Marketing Years

12. World Wheat Supply-Demand 2005/06 thru 2007/08 Marketing Years

13. Production of World Wheat Exporters 2005/06 thru 2007/08 Marketing Years

14. Exports of World Wheat Exporters 2005/06 thru 2007/08 Marketing Years

15. U.S. Wheat Ending Stocks Wheat Ending Stocks as a % of Usage

16. U.S. Wheat Stocks/Use% vs Price

17. Soybean Markets

18. Oberlin, KS Cash Soybean $s Decatur Coop - Oberlin, Kansas Jan. 22, 2007 – Jan. 18, 2008 Source: DTN Bid Analyzer

19. Bird City, KS New Crop SF $s Frontier Equity Coop Exchange – Bird City, Kansas New Crop Oil-Type Sunflower Bids Jan. 22, 2007 – Jan. 18, 2008 Source: DTN Bid Analyzer

20. March 2008 Soybean Futures CBOT: October 2006-January 2008 2008 Old Crop Soybean Contract Contract Volume & Open Interest

21. November 2008 Soybean Futures CBOT: January 2006-January 2008 2008 Old Crop Soybean Contract Contract Volume & Open Interest

22. U.S. Soybean Supply-Demand

23. U.S. Soybean Planted Acreage 1973-2007 + Projected 2008

24. U.S. Soybean Yields 1973-2007 + Trend

25. U.S. Soybean Production 1973-2007 + Projected 2008

26. U.S. Soybean Exports 1973/74 thru 2007/08 Marketing Years

27. World Soybean Supply-Demand 2005/06 thru 2007/08 Marketing Years

28. Production of World Soybean Exporters 2005/06 thru 2007/08 Marketing Years

29. Exports of World Soybean Exporters 2005/06 thru 2007/08 Marketing Years

30. U.S. Soybean Ending Stocks Soybean Ending Stocks as a % of Usage

31. U.S. Soybean Stocks/Use% vs Price

32. Feedgrain Markets: Corn & Grain Sorghum

33. Oberlin, KS Corn Cash Prices Decatur Coop, Oberlin, KS Jan. 22, 2007 – Jan. 18, 2008 Source: DTN Bid Analyzer

34. Oberlin, KS Grain Sorghum Cash Prices Decatur Coop, Oberlin, KS Jan. 22, 2007 – Jan. 18, 2008 Source: DTN Bid Analyzer

35. March 2008 Corn Futures CBOT: February 2006-January 2008 2008 Old Crop Corn Contract Contract Volume & Open Interest

36. December 2008 Corn Futures CBOT: April 2006-December 2007 2008 New Crop Corn Contract Contract Volume & Open Interest

37. U.S. Corn Supply-Demand

38. Dynamics of U.S. Corn Usage USDA USDA USDA USDA 2006/07 2007/08 est. 2006/07 2007/08 est. Feed and Residual 5,598 5,950 1 (+6%) Food, Seed, and Industrial 1,371 1,355 2 ( ־ 1%) Ethanol for Fuel 2,117 3,200 (+51%) Net Exports 2,125 2,450 (+15%) Ending Stocks 1,304 1,438 (+10%) Total Usage 11,21012,995 (+16%) Production 10,53513,074 (+24%) 1 Assumes DDGS retain 30% of the feed value of corn and are included in the feed and residual category by the USDA. 2 Industrial, food, and seed less ethanol.

39. U.S. Grain Sorghum Supply-Demand

40. U.S. Corn Planted Acreage 1973-2007 + Projected 2008

41. U.S. Corn Yields 1973-2007 + Trend

42. U.S. Corn Production 1973-2007 + Projected 2008

43. U.S. Corn Food, Seed & Industrial Use 1973/74 thru 2007/08 Marketing Years

44. U.S. Ethanol Industry at a Glance 2006 2008 Number of operating ethanol plants: 97 137 Under construction or expanding: 35 70 Announced plants: 300 (17%) 100 (?) Current production capacity: (BGPY) 4.8 7.6 Projected production capacity: 11.5 BGPY end of 2008 13.4 BGPY end of 2009 Feedstock Use Proportion: Corn 97% Sorghum 2% Other 1%

45. U.S. Corn Exports 1973/74 thru 2007/08 Marketing Years

46. Total U.S. Corn Use 1973/74 thru 2007/08 Marketing Years

47. World Corn Supply & Demand Global production up 9% from 2006/07. Demand up 7% Production will be 6 MMT (240 mil. Bu.) less than Usage World Ending Stocks to decrease 5.8 mmt from last year, down to 13 % of Usage. Million MT

48. World Coarse Grain Supply-Demand 2005/06 thru 2007/08 Marketing Years

49. Production of World Coarse Grain Exporters 2005/06 thru 2007/08 Marketing Years

50. Exports of World Coarse Grain Exporters 2005/06 thru 2007/08 Marketing Years

51. U.S. Corn Ending Stocks Corn Ending Stocks as a % of Usage

52. U.S. Corn Stocks/Use% vs Price

53. Long Run Grain Market Perspectives

54. Land in Crops (Millions of acres) 5 yr. Ave. 07/08USDA Proj. 08/09 5 yr. Ave. 07/08USDA Proj. 08/09 Corn 79.6 93.6 88.0 (-6%) Soybeans 74.2 63.6 70.0 (+10%) Hay 62.4 61.8 61.8 (--) Wheat 59.5 60.4 62.2 (+3%) Cotton 14.1 10.8 10.0 (-7%) Grain Sorghum 8.1 7.7 7.4 (-4%) Principle Crops 297.9 297.9 299.4 CRP 35.9 34.9 (-3%) Total crop land in the United States – 441.6 million acres

55. Crop Acres Coming Out of CRP 2007–2017 (Source: USDA, FSA)

56. Long Run Grain Prices 2000-06 USDA Long Run Average 2007/08 Projection Wheat $3.35 $6.45–$6.85$5.00 Corn $2.24 $3.70–$4.30$3.50 Grain Sorghum $2.20 $3.60–$4.20$3.40 Soybeans $5.66 $9.90–$10.90$7.50 Sunflowers$11.57 $19.60–$21.20 $15.50 1 National marketing year average price per unit, 2000-2006.

57. Grain Marketing Considerations Wheat – Global shortage of quality milling wheat, reduced Australian and Argentinean production, and acres planted N. Hemisphere. Wheat – Global shortage of quality milling wheat, reduced Australian and Argentinean production, and acres planted N. Hemisphere. Corn/G.S. – Strong demand from overseas buyers, ethanol demand, and bid for acres. Corn/G.S. – Strong demand from overseas buyers, ethanol demand, and bid for acres. Soybeans – Dryness hurting Argentinean and Brazilian crops, hectares in Brazil up only 1%, and critically low carryover in the U.S. Soybeans – Dryness hurting Argentinean and Brazilian crops, hectares in Brazil up only 1%, and critically low carryover in the U.S. Factors to Watch: Tight global S/D balances for wheat and soybeans Tight global S/D balances for wheat and soybeans Battle for acres this spring Battle for acres this spring Harvest of Southern Hemisphere crops Harvest of Southern Hemisphere crops

58. Questions??? K-State Extension Agricultural Economics: AgManager.info