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Department of Agricultural EconomicsPurdue University
2012
Grains Outlook
Chris Hurt
Purdue University
August 19, 2011
What will DRIVE the
Corn, Soybean, and
Wheat Markets???
Ethanol
China’s Bean Purchases
Weak Dollar?
Department of Agricultural EconomicsPurdue University
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0 1 2 3 4 5 6 7 8 9 10
11
0
1,000
2,000
3,000
4,000
5,000
6,000
1603
2115
3026
3677
4560
5000
Corn Use: USDAFeed
Fuel
Exports
FSI-NonFuel
Mill
ion
bu
.
Department of Agricultural EconomicsPurdue University
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0 1 2 3 4 5 6 7 8 9 10
11
400
600
800
1,000
1,200
1,400
1,600
1,800
2,000
f(x) = 28.0979838709678 x + 969.045161290322R² = 0.89389769269663
f(x) = 23.6221774193548 x + 544.496774193548R² = 0.632564224559098
Soybean Use: USDA
Crush
Linear (Crush)
Exports
Linear (Exports)
Mill
ion
bu
.
Department of Agricultural EconomicsPurdue University
1990/1991
1991/1992
1992/1993
1993/1994
1994/1995
1995/1996
1996/1997
1997/1998
1998/1999
1999/2000
2000/2001
2001/2002
2002/2003
2003/2004
2004/2005
2005/2006
2006/2007
2007/2008
2008/2009
2009/2010
2010/2011
2011/2012
0
100
200
300
400
500
600
700
800
900
1,000
0 5 2 3 2 2166 70 75
157192164
283305
436357
423504
685
825
992919
Soybean Imports from the U.S.: 1990/91-2010/11 (Mill Bu.) 6/9/11
China
Mexico
Japan
Department of Agricultural EconomicsPurdue University
2000 01 02 03 04 05 06 07 08 09 10 20110
5
10
15
20
25
30
35
40
45
50
8.4 7.8
13.014.9
16.3 16.1
20.2
26.6
34.6
38.8
46.544.2
U.S. Acres Required to Produce Ethanol (By-product adjusted) and Chinese Soybean Purchases
U.S. Harvest Year
Mill
ion
Ac
res
Department of Agricultural EconomicsPurdue University
90 91 92 93 94 95 96 97 98 99 0 1 2 3 4 5 6 7 8 9 10 110
10
20
30
40
50
60
70
80
90
100
72
51
91
41
61
18
37
54
7066
71
59
42
34
72
64
4246
5148
2620
2618
Ending Stocks in Days: Corn & Soybeans
CornSoybeans
Department of Agricultural EconomicsPurdue University
Corn SoybeansWheat Cotton Sorghum Oats Barley Rice Sunflower
-4.0
-2.0
0.0
2.0
4.0
6.06.4
5.4
-3.6 -3.3
-1.1 -1.1 -1.0
0.3
-0.8
Change in U.S. Acres 2010 vs. 2005M
illio
n A
cres
USDA
Department of Agricultural EconomicsPurdue University
60
61
62
63
64
65
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0 1 2 3 4 5 6 7 8 9 10
11
20
30
40
50
60
70
80
90
100Corn, Soybeans, Wheat Planted Acreage U.S.
Corn
Soybeans
Wheat
Mil
lio
n A
cre
s
Department of Agricultural EconomicsPurdue University
90 92 94 96 98 00 2 4 5 6 7 8 9 10 11100
110
120
130
140
150
160
170164.7
152.8 153
f(x) = 2.21801242236025 x + 111.424675324675R² = 0.735530374038072
Corn Yields: 1990-2010
Department of Agricultural EconomicsPurdue University
2011 Change in Pro and Yield from 2010
Department of Agricultural EconomicsPurdue University
Department of Agricultural EconomicsPurdue University
Department of Agricultural EconomicsPurdue University
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0 1 2 3 4 5 6 7 8 9 10
11
70
80
90
100
110
120
130
140
150
160
170
180
96
108
126
73
117123122
135
83
133129
92
147
132
144
113
123122
137132
146
156
121
146
168
154157
154160
171
157
150
f(x) = 1.95289589442815 x + 99.8709677419355R² = 0.578558393878344
Indiana Corn Yields
Department of Agricultural EconomicsPurdue University
Department of Agricultural EconomicsPurdue University
AUGUST USDA VS. EXPECTATIONS
Department of Agricultural EconomicsPurdue University
Corn: USDA8/11/11
08/09 09/10 10/11 11/12
1,624 1,673 1,708 940
12,092 13,110 12,447 12,914
13,729 14,791 14,185 13,874
5,205 5,166 5,000 4,900
1,316 1,370 1,400 1,410
FSI Fuel (Ethanol) 3,677 4,560 5,020 5,100
1,858 1,987 1,825 1,750
12,056 13,083 13,245 13,160
1,673 1,708 940 714
$4.06 $3.55 $5.20-$5.30 $6.20-$7.20
$5.25 $6.70Ethanol % Of Use (By-products adjusted) 72.4%22.1% 25.2% 27.4% 28.1% Stocks/Use 13.9% 13.1% 7.1% 5.4%
Million Bushels
Carryin
Production
Total Supply
Feed & Residual
US Farm Price
FSI Non-Fuel
Export
Total Use
Ending Stocks
Department of Agricultural EconomicsPurdue University
Sept O N D J F M A M J J A$6.50
$6.60
$6.70
$6.80
$6.90
$7.00
$7.10
$7.20
$7.30
$7.40
$7.18
$6.91$6.96
$7.01$7.06
$7.10$7.13
$7.18$7.23
$7.28$7.31
$7.27
Estimated Corn Storage Returns: August 18, 2011
Estimated Cash On-farm
Commercial
Department of Agricultural EconomicsPurdue University
90 91 92 93 94 95 96 97 98 99 0 1 2 3 4 5 6 7 8 9 10 1130.0
32.0
34.0
36.0
38.0
40.0
42.0
44.0
34.134.2
37.6
32.6
41.4
35.3
37.6
38.938.9
36.6
38.1
39.6
38.0
33.9
42.2
43.042.7
41.7
39.7
44.043.5
41.4
f(x) = 0.385657820440429 x + 34.4285714285714R² = 0.540536237569575
U.S. Bean Yield 90-11
Department of Agricultural EconomicsPurdue University
August USDA Yields and Change from 2010
Department of Agricultural EconomicsPurdue University
August USDA Soybean Production vs. Expectations
Department of Agricultural EconomicsPurdue University
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0 1 2 3 4 5 6 7 8 9 10
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25
30
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40
45
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55
36.0
33.0
38.5
31.0
34.5
41.5
37.0
40.0
27.5
36.5
41.0
39.0
43.0
46.047.0
39.538.0
43.542.0
39.0
46.0
49.0
41.5
38.0
51.550.0
46.045.0
49.0 48.5
43.0
f(x) = 0.454545454545455 x + 34.0625R² = 0.533052477726789
Indiana Soybean YieldsB
us
he
ls P
er
Ac
re
Department of Agricultural EconomicsPurdue University
Department of Agricultural EconomicsPurdue University
Soybeans:USDA8/11/1108/09 09/10 10/11 11/12
205 138 151 230
2,967 3,359 3,329 3,056
3,185 3,512 3,495 3,301
102 108 125 1111,662 1,752 1,645 1,6351,283 1,501 1,495 1,400
3,047 3,361 3,265 3,146
138 151 230 155
$9.97 $9.59 $11.40$12.50-$14.50
$13.50Stocks/Use 4.5% 4.5% 7.0% 4.9%
Carryin
Production
Total Supply
Seed & Residual Crush Exports
Total Use
Ending Stock
Farm Price
Department of Agricultural EconomicsPurdue University
O N D J F M A M J J A$12.30
$12.50
$12.70
$12.90
$13.10
$13.30
$13.50
$13.70
$13.26$13.31
$13.47 $13.48$13.57 $13.57 $13.59 $13.62 $13.59 $13.59
$13.43
Soybean Price Returns: August 18, 2011
Estimated Cash
On-Farm
Commercial
Department of Agricultural EconomicsPurdue University
Wheat: USDA8/11/1108/09 09/10 10/11 11/12
Million Bushels306 657 976 860
Production 2,499 2,218 2,208 2,0772,932 2,993 3,281 3,037255 148 129 240
1,005 988 1,003 1,0271,015 881 1,289 1,1002,275 2,017 2,421 2,367
657 976 860 670
$6.78 $4.87 $5.70 $7.00-$8.20$7.60
Total Use
Carryin
End Stocks
Farm Price
Total SupplyFeed & ResidualOther DomesticExports
Department of Agricultural EconomicsPurdue University
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0 1 2 3 4 5 6 7 8 9 10
11
30.0
35.0
40.0
45.0
50.0
55.0
60.0
65.0
70.0
75.0
49.0
46.0
42.0
51.0
46.0
53.0
43.0
58.0
50.0
59.0
52.0
40.0
50.052.0
61.060.0
38.0
58.0
55.0
66.0
69.0
66.0
53.0
69.0
62.0
72.0
68.0
56.0
69.067.0
60.0
63.0
f(x) = 0.705095307917889 x + 44.7096774193548R² = 0.497666774375473
Indiana Wheat Yields
Department of Agricultural EconomicsPurdue University
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