Assistant Professor/Grain Markets Specialist Crop Outlook Mobley Seminar Group Ames, Iowa September 2, 2009 Chad Hart Assistant Professor/Grain Markets Specialist chart@iastate.edu 515-294-9911 1

U.S. Corn Supply and Use 2007 2008 2009 Area Planted (mil. acres) 93.5 86.0 87.0 Yield (bu./acre) 150.7 153.9 159.5 Production (mil. bu.) 13,038 12,101 12,761 Beg. Stocks 1,304 1,624 1,720 Imports 20 15 Total Supply 14,362 13,740 14,496 Feed & Residual 5,913 5,250 5,300 Ethanol 3,049 3,650 4,200 Food, Seed, & Other 1,338 1,270 1,275 Exports 2,437 1,850 2,100 Total Use 12,737 12,020 12,875 Ending Stocks 1,621 Season-Average Price ($/bu.) 4.20 4.05 3.50 Source: USDA 2 2

U.S. Soybean Supply and Use 2007 2008 2009 Area Planted (mil. acres) 64.7 75.7 77.7 Yield (bu./acre) 41.7 39.6 Production (mil. bu.) 2,677 2,959 3,199 Beg. Stocks 574 205 110 Imports 10 15 Total Supply 3,261 3,179 3,320 Crush 1,803 1,660 1,670 Seed & Residual 93 154 174 Exports 1,159 1,265 Total Use 3,056 3,069 3,109 Ending Stocks 210 Season-Average Price ($/bu.) 10.10 10.00 9.40 Source: USDA 3 3

U.S. Soybean Meal Supply and Use 2007 2008 2009 Production (thou. tons) 42,282 39,566 39,785 Beg. Stocks 343 294 300 Imports 141 140 165 Total Supply 42,766 40,000 40,250 Domestic Demand 33,230 30,800 31,000 Export Demand 9,242 8,900 8,950 Total Use 42,472 39,700 39,950 Ending Stocks Average Price ($/ton) 355.94 325.00 290.00 Source: USDA 4 4

Historical Freeze Data Source: Dr. Elwynn Taylor, ISU

Fall Temperature Outlook Source: NOAA Climate Prediction Center

World Corn Production Source: USDA 7 7

World Soybean Production Source: USDA 8 8

Hog Returns vs. Corn Prices Sources: ISU Extension, Farrow-to-Finish; USDA-NASS

Exchange Rates (Jan. 2003 = 1) Source: USDA, ERS

Exchange Rates (Jan. 2009 = 1) Source: USDA, ERS

2009 Advance Export Sales Source: USDA, FAS

2009 U.S. Corn Export Advance Sales Source: USDA, FAS

Renewable Fuels Standard (RFS) 50% GHG Emission Reduction 60% GHG Emission Reduction 20% GHG Emission Reduction If construction started after Dec. 2007 14

Ethanol Margins Source: ISU, CARD

Renewable Fuels Standard (RFS) Crop Year Billion Bushels 2008 3.57 2009 4.11 2010 4.43 2011 4.64 16 16

Outside Influences (Jan. 2007 = 1)

Crude Oil Futures Prices Source: NYMEX

Bio-based Market Opportunities Source: Informa Economics, Biobased Multi-Client Study, March 2006

Biobased Pathways Source: USDA, 2008, U.S. Biobased Products: Market Potential and Projections Through 2025

Dept. of Energy Projections Source: Energy Information Administration, Annual Energy Outlook 2009

Draft Lifecycle GHG Reductions Source: EPA, May 2009 22

Corn 1990 - 2006

Corn

Seasonal Pricing Patterns Source: USDA, NASS, Monthly Price Data 1980-2008

Corn Futures 2009 Rev. Ins. Price $4.04 Source: CBOT, 9/1/09

Soybean Futures 2009 Rev. Ins. Price $8.80 Source: CBOT, 9/1/09

Soybean Meal Futures Source: CBOT, 9/1/09

Iowa Crop Basis

Ratio: Nov. 2010 Soy/Dec. 2010 Corn Source: CBOT

Input Costs Source: USDA, Agricultural Prices, July 31, 2009

Thoughts for 2009 and Beyond General economic conditions Recession concerns still hold significant power in the markets Projected economic recovery is a major key for crop prices for the 2009 crop year Most important ag. statistics: Crop yield estimates, feed demand USDA is indicating 2009 season-average prices in the neighborhood of $3.50 for corn and $9.40 for soybeans Current futures Friday: Corn $3.10, Soy $9.62 Tuesday: Corn $3.00, Soy $9.07

Thank you for your time. Any questions. My web site: http://www. econ Thank you for your time! Any questions? My web site: http://www.econ.iastate.edu/faculty/hart/ Iowa Farm Outlook: http://www.econ.iastate.edu/outreach/agriculture/periodicals/ifo/ Ag Decision Maker: http://www.extension.iastate.edu/agdm/