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GRAIN OUTLOOKGRAIN OUTLOOK
Agricultural Lenders Agricultural Lenders ConferenceConference
20072007
Mike WoolvertonMike WoolvertonKansas State UniversityKansas State Universitymikewool@agecon.ksu.edumikewool@agecon.ksu.edu
WHEATWHEAT
PRODUCTION PROJECTIONS, PRODUCTION PROJECTIONS, MAJOR WHEAT EXPORTERS, MAJOR WHEAT EXPORTERS,
2006/07 - 2007/08 (MMT)2006/07 - 2007/08 (MMT)2006/072006/07 2007/082007/08
EU-27EU-27 124.80 124.80 121.83 121.83 United StatesUnited States 49.32 49.32 57.53 57.53 CanadaCanada 25.27 25.27 20.30 20.30 AustraliaAustralia 9.90 9.90 21.00 21.00 (15.5)(15.5) ArgentinaArgentina 15.20 15.20 14.00 14.00
Total World Prod.Total World Prod. 593.07 593.07 606.24 606.24
Ending StocksEnding Stocks 125.08 112.36 125.08 112.36
Wheat Balance SheetWheat Balance Sheet05-06 06-07 07/0805-06 06-07 07/08
Plant A. (mil.)Plant A. (mil.) 57.2 57.2 57.3 57.3 60.5 60.5
Harvest A. (mil.)Harvest A. (mil.) 50.1 50.1 46.8 52.1 46.8 52.1
Bu./A. Bu./A. 42.0 42.0 38.7 38.7 40.6 40.6
ProductionProduction 2,105 2,105 1,812 1,812 2,114 2,114
ImportsImports 82 82 122 122 85 85
Carryover Carryover 540 540 571 571 456 456
Total Supply Total Supply 2,727 2,727 2,505 2,505 2,655 2,655
Utilization:Utilization:
Feed and ResidualFeed and Residual 154 154 129 129 170 170
FoodFood 914 914 930 930 940 940
Seed Seed 78 78 81 83 81 83
ExportsExports 1,009 1,009 909 1,100 909 1,100
Total UtilizationTotal Utilization 2,155 2,155 2,049 2,049 2,293 2,293CarryoverCarryover 571 571 (26%)(26%) 456 456 (22%)(22%) 362362
(16%)(16%)
U.S. Farm PriceU.S. Farm Price $3.42 $4.26 $5.50-6.10 $3.42 $4.26 $5.50-6.10
U.S. Wheat Planted Acreage
55.0
60.0
65.0
70.0
75.0
80.0
85.0
90.0
73 75 77 79 81 83 85 87 89 91 93 95 97 99 01 03 05 07Harvest Year
Mill
ion
Acr
es
.
Source: USDAWASDE Report: 7.12.07
KSU Dept. of Ag Econwww.agmanager.info
U.S Wheat Yields
25.027.029.031.033.035.037.039.041.043.045.047.0
73 75 77 79 81 83 85 87 89 91 93 95 97 99 01 03 05 07Year
Whe
at Y
ield
(B
u./A
cre)
.
Source: USDA & KSUWASDE Report: 7.12.07
2007 Estimate
KSU Dept. of Ag Econwww.agmanager.info
U.S. Wheat Production
1.4
1.6
1.8
2.0
2.2
2.4
2.6
2.8
3.0
73 75 77 79 81 83 85 87 89 91 93 95 97 99 01 03 05 07Year
Prod
ucti
on (
Bill
ion
Bu)
Source: USDAWASDE Report: 7.12.07
2007 Estimate
KSU Dept. of Ag Econwww.agmanager.info
U.S. Wheat Exports
0.8
1.0
1.2
1.4
1.6
1.8
2.0
73 75 77 79 81 83 85 87 89 91 93 95 97 99 01 03 05 07
Year
Expo
rts
(Bill
ion
Bu.
)
.
Source: USDAWASDE Report: 7.12.07
2007 Estimate
KSU Dept. of Ag Econwww.agmanager.info
Share of World Wheat Exports, Share of World Wheat Exports, 2007/08, USDA2007/08, USDA
U.S.
Canada
Australia
EU-27
Russia
Argentina
Kazak.
Ukraine
SOYBEANSSOYBEANS
Soybean Balance SheetSoybean Balance Sheet05-06 05-06 06-0706-07 07/0807/08
Plant A. (mil.)Plant A. (mil.) 72.0 75.5 72.0 75.5 64.1 64.1Harvest A. (mil.)Harvest A. (mil.) 71.3 74.6 71.3 74.6 63.3 63.3Bu./A. Bu./A. 43.0 42.7 43.0 42.7 41.4 41.4ProductionProduction 3,063 3,188 3,063 3,188 2,619 2,619 ImportsImports 3 3 8 8 6 6 Beginning Carryover Beginning Carryover 256 256 449 449 555 555
Total Supply Total Supply 3,322 3,322 3,646 3,646 3,180 3,180
Utilization:Utilization: Crushings Crushings 1,739 1,739 1,805 1,805 1,825 1,825 Seed Seed 93 79 93 79 85 85 ExportsExports 947 947 1,115 975 1,115 975 ResidualResidual 93 93 92 92 79 79
Total UtilizationTotal Utilization 2,8732,873 3,091 2,964 3,091 2,964 Ending CarryoverEnding Carryover 449 449 (16%)(16%) 555 555 (18%) (18%) 215 215 (7%)(7%)
U.S. Farm PriceU.S. Farm Price $5.66 $6.40 $7.35-8.35$5.66 $6.40 $7.35-8.35
U.S. Average Soybean Price
$4.00
$4.50
$5.00
$5.50
$6.00
$6.50
$7.00
$7.50
$8.00
$8.50
73 75 77 79 81 83 85 87 89 91 93 95 97 99 01 03 05 07Year
Aver
age
Farm
Pri
ce (
$/Bu
.)
.
Source: USDAWASDE Report: 7.12.07
KSU Dept. of Ag Econwww.agmanager.info
U.S. Soybean Planted Acreage
45
50
55
60
65
70
75
80
73 75 77 79 81 83 85 87 89 91 93 95 97 99 01 03 05 07
Harvest Year
Mill
ion
Acre
s
.
Source: USDAWASDE Report: 7.12.07
KSU Dept. of Ag Econwww.agmanager.info
U.S. Soybean Yields
20
25
30
35
40
45
73 75 77 79 81 83 85 87 89 91 93 95 97 99 01 03 05 07
Year
Soyb
ean
Yiel
d (B
u/Ac
re)
. Actual Yield Trend Yield
Source: USDA & KSUWASDE Report: 7.12.07
KSU Dept. of Ag Econwww.agmanager.info
U.S. Soybean Exports
0.3
0.4
0.5
0.6
0.7
0.8
0.9
1.0
1.1
1.2
73 75 77 79 81 83 85 87 89 91 93 95 97 99 01 03 05 07Year
Expo
rts
(Bill
ion
Bu.)
,
Source: USDAWASDE Report: 7.12.07
KSU Dept. of Ag Econwww.agmanager.info
Share of World Soybean Exports, Share of World Soybean Exports, 2007/08, USDA2007/08, USDA
U.S.
Brazil
Argentina
CORNCORN
Corn Balance SheetCorn Balance Sheet 05-06 05-06 06-07 06-07 07/0807/08
Plant A. (mil.)Plant A. (mil.) 81.8 81.8 78.3 78.3 92.9 92.9
Harvest A. (mil.)Harvest A. (mil.) 75.1 75.1 70.6 70.6 85.4 85.4
Bu./A. Bu./A. 148.0 148.0 149.1 152.8 149.1 152.8
Production 11,114 10,535 13,054Production 11,114 10,535 13,054
ImportsImports 9 9 10 10 15 15
Beginning Carryover 2,114Beginning Carryover 2,114 1,967 1,967 1,1371,137
Total Supply Total Supply 13,237 12,512 14,206 13,237 12,512 14,206
Utilization:Utilization:
Feed and ResidualFeed and Residual 6,141 6,141 5,750 5,750 5,7505,750
Food, seed, industrial 2,981Food, seed, industrial 2,981 3,525 4,790 3,525 4,790 Ethanol for fuelEthanol for fuel 1,603 1,603 (14%) (14%) 2,150 2,150 (20%) (20%) 3,400 3,400 (26%)(26%)
ExportsExports 2,147 2,100 2,147 2,100 2,150 2,150
Total UtilizationTotal Utilization 11,270 11,270 11,375 12,690 11,375 12,690
Ending CarryoverEnding Carryover 1,967 1,967 (17%) (17%) 1,137 1,137 (10%)(10%) 1,516 1,516 (12%)(12%)
U.S. Farm PriceU.S. Farm Price $2.00 $3.00 $2.80-3.40 $2.00 $3.00 $2.80-3.40
U.S. Corn Planted Acreage
60
65
70
75
80
85
90
95
100
40 45 50 55 60 65 70 75 80 85 90 95 00 05
Harvest Year
Mill
ion
Acre
s
.
KSU Dept. of Ag Econwww.agmanager.infoSource: USDA Acreage Report: 6.29.07
U.S. Corn Yield
607080
90100110120130140
150160170
70 75 80 85 90 95 00 05Harvest Year
Corn
Yie
ld
(Bu.
/Acr
e)
Actual Yield
Trend Yield
Source: USDA & K-State Ag. Econ.WASDE Report: 8.10.07
2004 Yield = 160 bu./ac2005 Yield= 148 bu./ac2006 Yield= 149.1 bu./ac2007 Trend Yield = 154 bu./ac.USDA 2007 Proj. = 155.8 bu./ac.
KSU Dept. of Ag Econwww.agmanager.info
Total U.S. Corn Production
4
5
6
7
8
9
10
11
12
13
14
73 75 77 79 81 83 85 87 89 91 93 95 97 99 01 03 05 07
Harvest Year
Prod
uctio
n (B
illio
n Bu
.)
.
Source: USDA WASDE Report: 8.10.07 & K-State Ag. Econ.
KSU Dept. of Ag Econwww.agmanager.info
Assumes national average yield of 155.8 bu./A.
Corn Used for Ethanol
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
02 03 04 05 06 07
Harvest Year
Billi
on B
ushe
ls
Source: USDAWASDE Report: 8.10.07
KSU Dept. of Ag Econwww.agmanager.info
U.S. Total Corn Usage
4.0
5.0
6.0
7.0
8.0
9.0
10.0
11.0
12.0
13.0
14.0
73 75 77 79 81 83 85 87 89 91 93 95 97 99 01 03 05 07Harvest Year
Billi
on B
u.
.
Domestic Corn Usage
Trendline
Source: USDAWASDE Report: 8.10.07
KSU Dept. of Ag Econwww.agmanager.info
Corn Usage Estimates Corn Usage Estimates (Millions of Bushels)(Millions of Bushels)
USDA/WASDE USDA/WASDEUSDA/WASDE USDA/WASDE 2006/072006/07 2007/08 est. 2007/08 est.
Feed and ResidualFeed and Residual 5,7505,750 5,700 5,7001 1 (-1%)(-1%) Food, Seed, and Industrial Food, Seed, and Industrial 1,3751,375 1,390 1,3902 2 (+1%)(+1%)
Ethanol for FuelEthanol for Fuel 2,1502,150 3,400 3,400 (+58%)(+58%) Net ExportsNet Exports 2,1002,100 2,000 2,000 (-5%)(-5%)
Ending StocksEnding Stocks 1,1371,137 1,5021,502Total UsageTotal Usage 12,512 12,512 13,992 13,992 (+12%)(+12%)
1 1 Assumes DDGS retain 30% of the feed value of corn and are included in the feed and residual Assumes DDGS retain 30% of the feed value of corn and are included in the feed and residual category by the USDA. category by the USDA.
2 2 Industrial, food, and seed less ethanol. Industrial, food, and seed less ethanol.
U.S. Corn Exports .
1.0
1.2
1.4
1.6
1.8
2.0
2.2
2.4
2.6
73 75 77 79 81 83 85 87 89 91 93 95 97 99 01 03 05 07
Harvest Year
Expo
rts
(Bi
llion
Bu.
)
.
Source: USDA WASDE Report: 8.10.07
2007 Estimate
KSU Dept. of Ag Econwww.agmanager.info
World Corn Production and ConsumptionWorld Corn Production and Consumption
200
250
300
350
400
450
500
550
600
650
700
750
1979
/198
0
1981
/198
2
1983
/198
4
1985
/198
6
1987
/198
8
1989
/199
0
1991
/199
2
1993
/199
4
1995
/199
6
1997
/199
8
1999
/200
0
2001
/200
2
2003
/200
4
2005
/200
6
2007
/200
8
Production Consumption
Global production Global production up 10% from up 10% from 2006/07. Demand 2006/07. Demand up 6%.up 6%.
Production will be Production will be 4.5 MMT (176 mil. 4.5 MMT (176 mil. Bu.) greater than Bu.) greater than consumption.consumption.
Ending stocks Ending stocks forecast to increase forecast to increase slightly from last slightly from last year to 14 % of year to 14 % of usage.usage.
Million MT
Share of World Corn Exports, Share of World Corn Exports, 2007/08, USDA2007/08, USDA
U.S.
Argentina
Brazil
China
Ukraine
S. Africa
Land in CropsLand in Crops (Millions of acres)(Millions of acres) 55 yr. Ave.yr. Ave. 07/08USDA07/08USDA Proj. 08/09Proj. 08/09
CornCorn 79.6 92.9 79.6 92.9 88.2 88.2 (-5%)(-5%) SoybeansSoybeans 74.2 64.1 74.2 64.1 68.9 68.9 (+7%)(+7%)
HayHay 62.4 61.8 62.4 61.8 61.8 61.8 (--)(--)
WheatWheat 59.5 60.5 62.6 59.5 60.5 62.6 (+2%)(+2%)
CottonCotton 14.1 11.1 10.0 14.1 11.1 10.0 (-11%)(-11%)
Grain Sorghum 8.1 7.8 7.4 Grain Sorghum 8.1 7.8 7.4 (-5%)(-5%)
Principle Crops 322.0 320.1 321.1Principle Crops 322.0 320.1 321.1CRPCRP 35.9 34.9 35.9 34.9 (-3%)(-3%)
Total crop land in the United States – 441.6 million acresTotal crop land in the United States – 441.6 million acres
Crop Acres Coming Out of CRP, Crop Acres Coming Out of CRP, 2007–2017, Millions of Acres2007–2017, Millions of Acres
Source: USDA, FSASource: USDA, FSA
0
0.2
0.4
0.6
0.8
1
1.2
1.4
1.6
Out of CRPMil. A.
Land in CRP, Leading States, 2007Land in CRP, Leading States, 2007Millions of AcresMillions of Acres
Source: USDA, FSASource: USDA, FSA
0
0.5
1
1.5
2
2.5
3
3.5
4
4.5
TX MT ND KS CO IA MN MO SD WA NE IL
Land In CRP
Grain Marketing ConsiderationsGrain Marketing Considerations Wheat – Global shortage of quality milling Wheat – Global shortage of quality milling
wheat, Australian production, and acres planted wheat, Australian production, and acres planted N. Hemisphere.N. Hemisphere.
Corn/G.S. – Strong demand from domestic Corn/G.S. – Strong demand from domestic livestock and overseas buyers, ethanol livestock and overseas buyers, ethanol demand, and bid for acres.demand, and bid for acres.
Soybeans – national average yield, hectares in Soybeans – national average yield, hectares in Brazil and acres in the U.S., growing demand Brazil and acres in the U.S., growing demand for SBO for biodiesel.for SBO for biodiesel.
Factors to Watch:Factors to Watch: Global S/D balancesGlobal S/D balances Battle for Acres Battle for Acres Southern Hemisphere CropsSouthern Hemisphere Crops Ethanol PriceEthanol Price
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