1. Department of Economics Crop Market Outlook Northeast ISU Research Farm 2008 Fall Field Day Nashua, Iowa Sept. 4, 2008 Chad Hart Assistant Professor/Grain Markets Specialist chart@iastate.edu 515-294-9911

2. Department of Economics Corn Supply and Use Source: USDA-WAOB, Aug. 2008 -0.3 +0.4 +6.6 +573 +100 +150 +300 -0.60 $6.00$5.40

3. Department of Economics U.S. Soybean Supply and Use Source: USDA-WAOB, Aug. 2008 +0.3 +1.2 -1.1 -27 -16 -0.50 $12.75$12.25

4. Department of Economics World Corn (million metric tons) Source: USDA-WAOB, Aug. 2008

5. Department of Economics World Soybean (million metric tons) Source: USDA-WAOB, Aug. 2008

6. Department of Economics Source: USDA-NASS, Aug. 2008

7. Department of Economics Source: USDA-NASS, Aug. 2008

8. Department of Economics Source: CARD, Iowa State Crop Basis Patterns

9. Department of Economics Renewable Fuels Standard (RFS) Calendar Year Billion Bushels 20093.75 20104.29 20114.50 Crop Year Billion Bushels 20083.57 20094.11 20104.43

10. Department of Economics Exchange Rate Ratios (Jan. 2007 = 1) Source: CME futures

11. Department of Economics Corn & Soybean Area Growth rate of 1.5 million acres per year

12. Department of Economics Input Costs Source: USDA, Agricultural Prices, July 2008

13. Department of Economics Stocks-to-Use Ratios

14. Department of Economics Thoughts for 2008  Looking for a little rain and later than average frost  Wet spring/flooding impacts will likely show up in yields  Relatively good weather has moved prices lower  But the markets are primed to move higher on weather concerns  How about the dollar?  Weaker dollar has helped hold up crop and livestock exports  Most important ag. statistic: Crude oil price

15. Department of Economics Thoughts for 2009 and Beyond  Many of the storylines from the past few years will continue  Tight stocks for both corn and soybeans  The competition for acreage  Ethanol’s buildout & livestock’s adjustment  Energy price & general economy concerns  Market volatility will remain high  Link to the energy markets  More market players with different trading objectives  Given current factors, the 2009 outlook is for crop prices to be in the neighborhood of 2008 prices

16. Department of Economics Thoughts for 2009 and Beyond  With input costs moving up, need to protect against downside price risk  Forward contracting  Futures/options  Revenue insurance  Know your break-even price and defend it  The competition for acreage should lead to pricing opportunities pre-planting

17. Department of Economics Thank you for your time! Any questions?