2017/18 Idaho Grain Outlook

Kelly Olson, kolson@barley.idaho.gov

Idaho Barley Commission

Key Points

Outside Market Influences

Record World Stocks

MY 2017/18 Grain Market Fundamentals

Outside Market Influences

Managed Funds Bearish

Very short positions in corn & wheat in 2016 &2017.

Rallied to net long positions in July 2017 but reversed again to net short in Sept. 2017.

Current investments heavily weighted to stocks, cotton, crude & soybeans.

Outside Market Influences

Grain Price Outlook2017/18 Global Grain S&D

2350

2400

2450

2500

2550

2600

2650

MY 2014/15 MY 2015/16 MY 2016/17 MY 2017/18

Production Use

578

Ending Stocks

609 637617

million metric tons

Source: USDA WASDE, Sept. 12, 2017

World & U.S. Supply & Demand (USDA WASDE, Apr 9, 2015)

World

Barley

U.S.

Barley

World

Corn

U.S.

Corn

World

Wheat

U.S.

Wheat

Output 142 MMT

-4%

3.1 MMT

-30%

1033 MMT

-4%

360 MMT

-6%

745 MMT

-1%

47 MMT

-25%

Use 143 MMT

-4%

4.1 MMT

-6%

1054 MMT

+2%

315 MMT

+0.9%

737 MMT

+0%

32 MMT

+0%

Ending 19 MMT

-24%

1.5 MMT

-35%

203 MMT

-11%

59 MMT

-1%

263 MMT

+3%

25 MMT

-21%

Stocks /

Use(previous year)

13%

vs 16%

36.3%

vs 53.2%

19.2%

vs 22.1%

16.4%

vs 16.1%

36%

vs 35%

43.6%

vs 53.4%

MY 2017/18 World Grain S&DUSDA, Sept. 12, 2017

Source: USDA WASDE, Sept. 12, 2017

2017 Idaho Grain Output

Idaho Barley ProductionHarvested area 480,000 acres 17%Production 48.5 million bu 22%

Ave. Yields 101 bpa 6%

Idaho Wheat ProductionHarvested area 1,095,000 acres 1%Production 92.1 million bu 9%

Ave. Yields spring – 81.0 bpa 7%winter – 86.0 bpa 9%

Source: USDA NASS Crop Production, Aug. 10, 2017

Bigger 2015 U.S. production and burdensome carryover

MUCH SMALLER CROPS

2017 U.S. production -30%U.S. ending stocks -35% U.S. stocks-to-use 36% vs. 53%

World ending stocks -24% World s/u 13% vs. 16%

2017/18 Barley Market

20U.S. Beer Demand

2016 Craft Beer Sales

+6.2%12.3% share

2016 Domestic Beer Sales

+0%

Percent

Change

in Volume

Calendar

Year

2017 YTD

Calendar

Year

2016

Calendar

Year

2015

Calendar

Year

2014

Calendar

Year

2013

Total Supply -2.0% +0.0% -0.1% +0.4% -1.2%

Domestics -0.8% -1.2% -0.7% -1.3%

Imports +6.8% +6.2% +6.9% -0.6%

2017/18 Corn Market

14.2 billion bu -6% Ave. yield 169.9 bpa -3% Domestic demand +0.9%feed +0.9% and ethanol +0.7% U.S. exports under pressure -19% vs +21%U.S. ending stocks -1% U.S. stocks-to-use 16.4% vs 16.1%World ending stocks -11% World s/u 19.2% vs 22.1%

2017/18 Corn Market

World Corn Competitors -2% Brazil -4%; exports -6% Argentina +2%; exports +4% Ukraine -2%; exports +2%

Import Demand by Top 5 major importers +8% vs +4% year before.

0.0

5.0

10.0

15.0

20.0

25.0

2008/09 2009/10 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17 2017/180.0

200.0

400.0

600.0

800.0

1000.0

1200.0

Pe

rce

nt M

MT

World Corn Prod, Use, Stocks/Use

S/U ratio Use Prod

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

16.0

2008/09 2009/10 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17 2017/18

US Corn Use(billion bu)

$4.52

$3.45

$4.15

$3.51

2017/18 Wheat Market

Smaller U.S. crop 1.74 billion bu -25% U.S. Exports -8% vs +36%U.S. ending stocks -21% U.S. stocks-to-use 43.6% vs 53.4%

World ending stocks +3%World s/u 36% vs 35%

2017/18 Wheat Market

Six Major Wheat Competitors -1.4%

EU +2%

Russia +12%

Ukraine -1%

Canada -16%

Australia -33%

Argentina +0%

Import Demand by Top 5 major importers +3% vs +6% year before.

0.0

5.0

10.0

15.0

20.0

25.0

30.0

35.0

40.0

2008/09 2009/10 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17 2017/18580.0

600.0

620.0

640.0

660.0

680.0

700.0

720.0

740.0

760.0

780.0

Percent MMT

World Wheat Prod, Use, Stocks/Use

S/U ratio Use Prod

0.0

0.5

1.0

1.5

2.0

2.5

3.0

2008/09 2009/10 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17 2017/18

US Wheat Use(billion bu)

$5.80

$4.42

$4.27

Grain Price Outlook2017/18 Grain Price Outlook

Barley Corn Wheat

MY 17/18 $4.20 -

5.20/bu

$2.80 - 3.60/bu $4.30 –

4.90/bu

MY 16/17 $4.96 $3.35 $3.89

MY 15/16 $5.52 $3.61 $4.89

Current

Idaho prices

Current open

market

Malt $3.12 -4.35

Feed $2.40 - 2.88

SWW

$3.50 – 4.00

HRS

$5.65- 6.05/bu

2017 malt

contract

$4.70-4.77Sources: USDA WASDE, Sept. 12, 2017 & Idaho Grain Market Report, Sept. 14,

2017

2017/18 Winter Grain Crop Condition

NWS BOISE

ENSO Neutral Winter Outlook

Equatorial Sea Surface Temperatures trending

near-to-below average across central and east-

central Pacific Ocean

Currently ENSO-Neutral

Majority of models at Nino-3.4 region predict

ENSO-neutral conditions through Northern

Hemisphere 2017-18 winter.

North American Multi-Model Ensemble indicates

formation of La Nina as soon as Northern

Hemisphere fall 2017.

NOAA/CPC forecasters call for increasing

chance (55-60%) for La Nina in winter 2017-18.

NWS BOISE

La Nina Winter Pattern

Thank YouKelly Olson, 208.334.2090

kolson@barley.idaho.gov

www.barley.idaho.gov