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Assistant Professor/Grain Markets Specialist

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Presentation on theme: "Assistant Professor/Grain Markets Specialist"— Presentation transcript:

1 Assistant Professor/Grain Markets Specialist
Grain Market Update Crop Advantage Series Spirit Lake, Iowa Jan. 11, 2012 Chad Hart Assistant Professor/Grain Markets Specialist 1 1

2 U.S. Corn Supply and Use 2008 2009 2010 2011 Area Planted (mil. acres)
86.0 86.4 88.2 91.9 Yield (bu./acre) 153.9 164.7 152.8 146.7 Production (mil. bu.) 12,092 13,092 12,447 12,310 Beg. Stocks 1,624 1,673 1,708 1,128 Imports 14 8 28 15 Total Supply 13,729 14,774 14,182 13,453 Feed & Residual 5,182 5,125 4,792 4,600 Ethanol 3,709 4,591 5,021 5,000 Food, Seed, & Other 1,316 1,370 1,407 1,405 Exports 1,849 1,980 1,835 1,600 Total Use 12,056 13,066 13,054 12,605 Ending Stocks 848 Season-Average Price ($/bu.) 4.06 3.55 5.18 6.40 Source: USDA-WAOB 2 2

3 U.S. Soybean Supply and Use
2008 2009 2010 2011 Area Planted (mil. acres) 75.7 77.5 77.4 75.0 Yield (bu./acre) 39.7 44.0 43.5 41.3 Production (mil. bu.) 2,967 3,359 3,329 3,046 Beg. Stocks 205 138 151 215 Imports 13 15 14 Total Supply 3,185 3,512 3,495 3,275 Crush 1,662 1,752 1,648 1,625 Seed & Residual 106 110 130 120 Exports 1,279 1,499 1,501 1,300 Total Use 3,047 3,361 3,280 3,045 Ending Stocks 230 Season-Average Price ($/bu.) 9.97 9.59 11.30 11.70 Source: USDA-WAOB 3 3

4 Projected Corn Yields Source: USDA-NASS

5 Projected Soybean Yields
Source: USDA-NASS

6 World Corn Production Source: USDA-WAOB 6 6

7 World Soybean Production
Source: USDA-WAOB 7 7

8 South American Precipitation
Source: USDA-NASS & WAOB 8 8

9 Corn vs. Wheat Source: CME Group, 1/10/2012

10 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: Shane Ellis, ISU Extension

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

12 Corn Export Shifts Source: USDA-FAS

13 Soy Export Shifts Source: USDA-FAS

14 Change of Export Pace

15 Renewable Fuels Standard (RFS)
Crop Year Billion Bushels 2011 4.64 2012 4.86 2013 5.07 2014 5.29 15 15

16 Corn Grind for Ethanol Source: DOE-EIA

17 Ethanol Margins Source: CARD

18 Ethanol Blending Advantage

19 Biodiesel Production Source: DOE-EIA

20 Projected 2011 Season-Average Corn Price

21 Projected 2011 Season-Average Soy Price

22 Projected 2012 Season-Average Corn Price

23 Projected 2012 Season-Average Soy Price

24 Iowa Corn Prices vs. Costs

25 Iowa Soybean Prices vs. Costs

26 Principal Crop Area Source: USDA-NASS

27 States with Room to Grow
Number is the difference in planted acres between 2008 and 2011

28 Iowa Crop Margins

29

30 Current Corn Futures 6.00 5.70 5.46 5.43 Source: CME Group, 1/10/2012

31 Current Soybean Futures
11.83 11.73 11.63 11.63 Source: CME Group, 1/10/2012

32 Thoughts for 2012 and Beyond
General economic conditions Continued worldwide economic recovery is a major key for crop prices US job recovery, European financial concerns Supply/demand concerns Smaller than anticipated U.S. crops, worries about dry conditions Biofuel growth and energy demand Corn has the upper hand in the acreage competition Will supply be able to keep pace with demand? 2011/12: USDA: Corn $6.40; Soy $11.70 Futures (as of 1/10/12): Corn $6.00; Soy $11.73 2012/13: Futures (as of 1/10/12): Corn $5.70; Soy $11.83

33 Thank you for your time. Any questions. My web site: http://www. econ
Thank you for your time! Any questions? My web site: Iowa Farm Outlook: Ag Decision Maker:


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