Grain Outlook For Dr. Robert Wisner Iowa State University Dr. Robert Wisner Iowa State University 3/12/2004

Grain Outlook, Near-Record Low world grain stocks Foreign weather--bad last 2 years China? World soy stocks: 9% below 2003, 11% above 2002, 17% above 2001—USDA Soy exports rationed, but not crush U.S. soy: record low stocks/use? U.S. corn/soy yield ratio & ‘04 plantings? Strong corn domestic & export demand Market tops probably not be in yet 3/10/04

Map From BBC News Asian Bird Flu 65 million birds destroyed?

3/10/04

Cumulative Export Sales, vs. Yr. Ago 3/04/04 % Chg. Proj. % Chg. Corn Soybeans* Soybean meal Soybean oil All Wheat Grain Sorghum * China up 13% from Y/A.

China Corn, USDA Export Projections vs. actual Projections too low, except for 1998 October March % 21% below actual % 65% below actual % 18% below actual % 20% below actual % 17% above actual % 17% below actual % 74% below actual

For discussion of Soybean yield problems, see:

May 04 corn

Locations of Under-Construction Ethanol Plants, March 2004 Source: Renewable FuelsAssoc. Ann. Mil. Bu. Corn Use West Burlington, IA, 16 Hopkinsville, KY 8 Lexington, NE 16.8 Mason City, IA 16 Hanlontown, IA 18 Palestine, IL 16 Malta Bend, MO 16 Iowa Falls, IA 16 Annual Mil. Bu. Corn Use Ashton, IA 18 Steam Boat Rock, IA 8 Hudson, SD 18 Friesland, WI 16 Total 182.8

Extreme right = 55 m.t. Brazil crop

Yield trend: +0.6bu/A./Yr.

Yield trend: bu./A./Yr.

May 04 Soybeans

Cumulative Export Sales, vs. Yr. Ago 3/04/04 % Chg. Proj. % Chg. HRW wheat SRW wheat HRS wheat* White wheat Durum wheat +36 All Wheat Wheat prod * China 176 mil. Bu. HRS, 26 m.b. SRW, 7 WW

Chicago May Wheat

Occurred 79% of time

Excluding

Very Low world grain reserve Global soybean supplies more adequate -- if S. America crop holds at USDA 3/10/04 Soybeans: exports rationed, but not crush— strong basis & higher prices to cut margins Corn export sales recently slowing Ethanol expansion to continue strong, limiting future export growth potential Corn, wheat, soybean & product prices explosive if major weather problems Some downside risk in late spring, summer Key Points