Corn/Biofuels Outlook Aug. 10, 2015 Chad Hart Associate Professor/Crop Markets Specialist chart@iastate.edu 515-294-9911 1 1

U.S. Corn Supply and Use 2011 2012 2013 2014 2015 Area Planted (mil. acres) 91.9 97.3 95.4 90.6 88.9 Yield (bu./acre) 147.2 123.1 158.1 171.0 168.8 Production (mil. bu.) 12,360 10,755 13,829 14,216 13,686 Beg. Stocks 1,128 989 821 1,232 1,772 Imports 29 160 36 30 Total Supply 13,517 11,904 14,686 15,477 15,488 Feed & Residual 4,557 4,315 5,034 5,300 Ethanol 5,000 4,641 5,134 5,200 5,250 Food, Seed, & Other 1,428 1,397 1,369 1,355 1,375 Exports 1,543 730 1,917 1,850 Total Use 12,528 11,083 13,454 13,705 13,775 Ending Stocks 1,713 Season-Average Price ($/bu.) 6.22 6.89 4.46 3.70 3.65 Source: USDA-WAOB 2 2

Corn Good to Excellent Ratings Nationwide, 70% of the corn crop is rated Good to Excellent Last year, 73% Source: USDA-NASS, Aug. 2, 2015

Early Corn Yield Estimate

Early Corn Yield Estimate Top: 2015 yield estimate Bottom: Change from last year Units: bushels/acre Source: USDA-NASS

World Corn Production Source: USDA-WAOB 6 6

Hog Crush Margin The Crush Margin is the return after the pig, corn and soybean meal costs. Carcass weight: 200 pounds Pig price: 50% of 5 mth out lean hog futures Corn: 10 bushels per pig Soybean meal: 150 pounds per pig Source: ISU Extension

Cattle Crush Margin The Crush Margin is the return after the feeder steer and corn costs. Live weight: 1250 pounds Feeder weight: 750 pounds Corn: 50 bushels per head Source: ISU Extension

U.S. Meat Production & Prices Source: USDA-WAOB 9 9

Corn Export Sales Source: USDA-FAS

Corn Export Shifts Source: USDA-FAS

Corn Advance Export Sales Source: USDA-FAS

Crude Oil Prices Sources: EIA and CME

Strength of the U.S. Dollar Source: Federal Reserve

Corn Grind for Ethanol

Ethanol Stocks Source: EIA

Ethanol Exports Source: EIA

Biodiesel Production Source: EIA

Renewable Fuels Standard

U.S. DDG Supply and Use 2011 2012 2013 2014 2015 Production (mil. metric tons) 36.3 33.5 36.6 37.1 37.2 Imports 0.4 0.5 Total Supply 36.7 33.9 37.5 37.6 Domestic 29.1 25.7 25.1 27.0 27.6 Exports 7.6 8.2 12.0 10.5 10.0 Total Use Price ($ per ton) 217 256 205 158 Source: USDA-ERS 20 20

DDG Exports Source: USDA

DDG Exports to China Source: USDA

Current Corn Futures 3.91 3.80 Source: CME Group, 8/10/2015

2014/15 Crop Margins

2015/16 Crop Margins

Thoughts for 2015 and Beyond Supply/demand concerns Market was debating whether this year’s rain makes grain USDA indicates it does Exports retreating Negative margins for 2014-16 crops 2014/15 USDA 2015/16 Futures (8/10/15) 2016/17 Corn $3.70 $3.65 $3.80 $3.91 Soybeans $10.05 $9.15 $9.45 $8.99

Thank you for your time. Any questions. My web site: http://www2. econ Thank you for your time! Any questions? My web site: http://www2.econ.iastate.edu/faculty/hart/ Iowa Farm Outlook: http://www2.econ.iastate.edu/ifo/ Ag Decision Maker: http://www.extension.iastate.edu/agdm/