Grain Market Outlook Ag Profitability Conference Wakeeney, Kansas December 20, 2007 Mike Woolverton & Daniel OBrien K-State Research and Extension

Historic vs Current Grain Prices, Dollars per Bushel Average 12/17/07 Wheat $3.36 $9.56 Corn $2.27 $4.24 Grain Sorghum $2.20 $4.19 Soybeans $5.64 $ Average price per bushel, Kansas City cash truck bids, 17 December 2007.

Wheat Markets

Wakeeney, KS Cash Wheat Prices Midwest Coop, Wakeeney, Kansas Jan. 19 – Dec. 18, 2007 Source: DTN Bid Analyzer

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

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

U.S. Wheat Supply-Demand

Production of Major Wheat Exporters Million Metric Tons 2006/ / / /08 EU EU United States United States Canada Canada Australia (12.7) Australia (12.7) Argentina Argentina World Production World Production World Ending Stocks World Ending Stocks

Soybean Markets

Hays, KS Cash Soybean $s Midland Marketing - Hays, Kansas Jan. 19 – Dec. 18, 2007 Source: DTN Bid Analyzer

March 2008 E-Soybean Futures CBOT: April 2006-December Old Crop Soybean Contract Contract Volume & Open Interest

November 2008 E-Soybean Futures CBOT: April 2006-December Old Crop Soybean Contract Contract Volume & Open Interest

U.S. Soybean Supply-Demand

Feedgrain Markets: Corn & Grain Sorghum

Wakeeney, KS Corn Cash Prices Midwest Coop, Wakeeney, KS Jan. 19 – Dec. 18, 2007 Source: DTN Bid Analyzer

Wakeeney, KS Grain Sorghum Cash Prices Midwest Coop, Wakeeney, KS Jan. 19 – Dec. 18, 2007 Source: DTN Bid Analyzer

March 2008 E-Corn Futures CBOT: April 2006-December Old Crop Corn Contract Contract Volume & Open Interest

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

U.S. Corn Supply-Demand

U.S. Grain Sorghum Supply-Demand

Dynamics of U.S. Corn Usage USDA/WASDE USDA/WASDE USDA/WASDE USDA/WASDE 2006/ /08 est. 2006/ /08 est. Feed and Residual 5,5985,650 1 (+1%) Food, Seed, and Industrial 1,3711,390 2 (+1%) Ethanol for Fuel 2,117 3,200 (+51%) Net Exports 2,1252,450 (+15%) Ending Stocks 1,304 1,797 (+38%) Total Usage 12,515 14,487 (+16%) Production 10,535 13,168 (+25%) 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.

World Corn Production & Consumption Global production up 9% from 2006/07. Demand up 6%. Production will be 2.9 MMT (114 mil. Bu.) greater than consumption. Ending stocks forecast to increase slightly from last year to 14 % of usage. Million MT

Land in Crops (Millions of acres) 5 yr. Ave. 07/08USDA Proj. 08/09 5 yr. Ave. 07/08USDA Proj. 08/09 Corn (-6%) Soybeans (+10%) Hay (--) Wheat (+3%) Cotton (-8%) Grain Sorghum (-4%) Principle Crops CRP (-3%) Total crop land in the United States – million acres

Crop Acres Coming Out of CRP 2007–2017, Millions of Acres Source: USDA, FSA

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

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