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Outlook in Crop Markets for 2012

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Presentation on theme: "Outlook in Crop Markets for 2012"— Presentation transcript:

1 Outlook in Crop Markets for 2012
Linking Profitability and Soil Conservation Lenox, Iowa Feb. 8, 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) 153.9 164.7 152.8 147.2 Production (mil. bu.) 12,092 13,092 12,447 12,358 Beg. Stocks 1,624 1,673 1,708 1,128 Imports 14 8 28 15 Total Supply 13,729 14,774 14,182 13,501 Feed & Residual 5,182 5,125 4,793 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 1,650 Total Use 12,056 13,066 13,055 12,655 Ending Stocks 846 Season-Average Price ($/bu.) 4.06 3.55 5.18 6.20 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 41.5 Production (mil. bu.) 2,967 3,359 3,329 3,056 Beg. Stocks 205 138 151 215 Imports 13 15 14 Total Supply 3,185 3,512 3,495 3,286 Crush 1,662 1,752 1,648 1,615 Seed & Residual 106 110 130 120 Exports 1,279 1,499 1,501 1,275 Total Use 3,047 3,361 3,280 3,011 Ending Stocks 275 Season-Average Price ($/bu.) 9.97 9.59 11.30 11.70 Source: USDA-WAOB 3 3

4 2011 Corn Yields Source: USDA-NASS

5 2011 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, 2/7/2012

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 Blending Advantage

18 Projected 2011 Season-Average Corn Price

19 Projected 2011 Season-Average Soy Price

20 Projected 2012 Season-Average Corn Price

21 Projected 2012 Season-Average Soy Price

22 Iowa Corn Prices vs. Costs

23 Iowa Soybean Prices vs. Costs

24 Principal Crop Area Source: USDA-NASS

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

26 Iowa Crop Margins

27

28 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 Worries about dry conditions in South America and in U.S. 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 $6.20; Soy $11.70 Futures (as of 2/3/12): Corn $5.99; Soy $11.78 2012/13: Futures (as of 2/3/12): Corn $5.64; Soy $11.93

29 Arable Land

30 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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