SOUTHERN REGIONAL AGRICULTURAL OUTLOOK CONFERENCE

ATLANTA, GEORGIASEPTEMBER 25-27, 2000

DAVID KENYONDEPT. OF AGRICULTURAL AND APPLIED ECONOMICS

VIRGINIA TECHBLACKSBURG, VIRGINIA

PHONE: 540-231-6847 EMAIL: DKENYON@VT.EDU

GRAIN PRICE UPDATE

GRAIN PRICE UPDATE

CORN BALANCE SHEETITEM 95/96 96/97 97/98 98/99 99/00

PLANTED 71.2 79.5 79.5 80.2 77.4

HARVESTED 65.0 73.1 72.7 72.6 70.5

YIELD 113.5 127.1 126.7 134.4 133.8

PRODUCTION 7,374 9,293 9,207 9,761 9,437

BEGIN STOCKS 1,558 426 883 1,308 1,787

SUPPLY 8,948 9,733 10,099 11,085 11,239

FEED 4,682 5,362 5,505 5,472 5,625

FSI 1,612 1,691 1,782 1,846 1,920

EXPORTS 2,228 1,795 1,504 1,981 1,925

USE 8,522 8,849 8,791 9,298 9,470

END STOCKS 426 884 1,308 1,775 1,769

PRICE $3.24 $2.70 $2.43 $1.94 $1.80

WASDE, 9/12/00, <http://usda.mannlib.cornell.edu/usda/usda.html>

GLOBAL COARSE GRAIN ENDING STOCKS

0

50

100

150

200

25080/81

81/82

82/83

83/84

84/85

85/86

86/87

87/88

88/89

89/90

90/91

91/92

92/93

93/94

94/95

95/96

96/97

97/98

98/99

99/00

00/01

GRAIN PRICE UPDATE

CORN SUPPLY AND DEMAND99-00 00-01

ITEM SEPT MAR MAY JUN JUL AUG SEPT

PLANT 77.4 77.9 77.9 77.9 79.6 79.6 79.6

HARVEST 70.5 71.2 71.1 71.1 73.1 73.1 73.1

YIELD 133.8 131.6 137.0 137.0 137.0 141.9 141.8

PRODN 9,437 9,370 9,740 9,740 10,013 10,369 10,362

BEG STOCKS 1,787 1,739 1,784 1,759 1,819 1,794 1,769

IMPORT 15 15 10 10 10 10 10

SUPPLY 11,239 11,124 11,534 11,509 11,842 12,174 12,142

FEED 5,625 5,650 5,675 5,700 5,650 5,700 5,750

FSI 1,920 1,940 1,975 1,975 1,960 1,960 1,975

EXPORT 1,925 1,950 1,900 1,975 2.050 2,125 2,175

DEMAND 9,470 9,540 9,550 9,650 9,660 9,785 9,900

END STOCK 1,769 1,584 1,984 1,859 2,182 2,389 2,242

AVE PRICE 1.80 2.20 1.80 1.85 1.70 1.65 1.70

WASDE, 9/12/00, <http://usda.mannlib.cornell.edu/usda/usda.html>

GRAIN PRICE UPDATE

SOUTHERN REGION CORN PRODUCTION

STATE 1999 2000

1,000 Bushels

VA 21,840 40,500

KY 123,900 166,370

TN 58,140 63,720

NC 51,200 72,600

SC 19,250 19,600

GA 30,900 34,000

AL 20,600 11,200

MS 36,270 39,140

LA 39,930 36,720

AR 13,000 22,200

TOTAL 415,030 506,050

Crop Production, 9/12/2000.

GRAIN PRICE UPDATE

CORN STOCKS AND PRICE

U.S

. Sea

son

Ave

rage

Cas

h P

rice

($/

bu)

U.S. Ending Stocks (mil bu)

1.50

1.75

2.00

2.25

2.50

2.75

3.00

3.25

3.50

250 500 750 1000 1250 1500 1750 2000 2250

95/96

96/97

93/94

91/92

97/98

89/90 90/91

94/95

98/99

92/93

Price = 7.71-0.748 * Ln (Ending Stocks)

R2=0.82

YEAR STOCKS PRICE 89/90 1344 2.36 90/91 1520 2.28 91/92 1100 2.37 92/93 2114 2.07 93/94 851 2.50 94/95 1558 2.26 95/96 426 3.24 96/97 883 2.71 97/98 1308 2.43 98/99 1787 1.94 99/00 1769 1.80

GRAIN PRICE UPDATE

CORN COMBINED DEC 1999 CHART

GRAIN PRICE UPDATEGRAIN PRICE UPDATE

CORN DECEMBER 2000 CHART

Southeast Virginia Weekly Average Corn Price:1980-1999

230

235

240

245

250

255

260

265

270

275

280

2851 4 7 10 13 16 19 22 25 28 31 34 37 40 43 46 49 52

Week Starting in September

GRAIN PRICE UPDATE

SOUTHEAST VIRGINIA CORN PRICE CHANGE (YEARS WHEN HARVEST PRICE < 247 CENTS)*

YEAR

OCTOBER

WEEK 3

MARCH

WEEK 32 CHANGE

Cents per bushel

82/83 216 315 99

85/86 228 247 19

86/87 179 190 11

87/88 173 223 50

91/92 228 280 52

92/93 218 241 23

94/95 219 268 49

98/99 215 233 18

99/00 210 233 23

Average 210 248 38

*1980-1999 average week 3 price is 247 cents.

GRAIN PRICE UPDATE

CORN STORAGE

SEPT. 19, 2000 $/BU

MARCH 01 FUTURES 2.00

SOUTHEAST CASH 1.67

BEGIN MARCH BASIS (-25 TO 7) -0.33

END MARCH BASIS (JAN: 4 TO 44) 0.22

BASIS CHANGE 0.55

STORAGE COSTS -0.20

2¢ MONTH * 5 MONTHS = 0.12

$2.00 * .10 * 5/12 = 0.08

RETURNS TO STORAGE 0.35

GRAIN PRICE UPDATE

SELL CASH, BUY MAY CALL OPTION

SEPTEMBER 15

MARCH 15

YEAR MAY FUTURES STRIKE PRICE

CALL PREM CALL PREM OPTION RETURN

1985 235 240 8.00 1.25 - 6.75

1986 182 180 11.25 0.25 - 11.00

1987 194 190 14.50 14.75 + 0.25

1988 308 310 22.00 0.75 - 21.25

1989 242 240 15.00 11.00 - 4.00

1990 250 250 14.00 11.00 - 3.00

1991 268 270 14.50 5.75 - 8.75

1992 235 240 9.75 0.38 - 9.37

1993 252 250 12.50 30.00 + 17.50

1994 241 240 11.25 8.75 - 2.50

1995 325 330 17.20 60.00 + 42.80

1996 329 330 18.40 0.00 - 18.40

1997 277 280 15.5 0.50 - 15.00

1998 230 230 15.75 2.25 - 13.50

1999 230 230 14.75 10.50 - 4.25

Ave N/A N/A 14.29 10.48 - 3.81

GRAIN PRICE UPDATE

CORN SUPPLY AND DEMAND00-01* 01-02**

ITEM SEPT SEPT 00

PLANT 79.6 78.1

HARVEST 73.1 71.1

YIELD 141.8 134.01

PRODN 10,362 9,527

BEG STOCKS 1,769 2,242

IMPORT 10 10

SUPPLY 12,142 11,779

FEED 5,750 5,865

FSI 1,975 2,035

EXPORT 2,175 2,100

DEMAND 9,900 10,000

END STOCK 2,242 1,779

AVE PRICE 1.70 2.15

*WASDE, SEPT. 2000. ** SPARKS COMMODITIES, 9/15/00

GRAIN PRICE UPDATE

CORN DECEMBER 2001 CHART

3.78 4.69

11.94

19.92

24.43

18.29

6.094.63 4.87

1.36

0

5

10

15

20

25

30

1.50-1.75

1.76-2.00

2.01-2.25

2.26-2.50

2.51-2.75

2.76-3.00

3.01-3.25

3.26-3.50

3.51-3.75

3.76-4.00

Price Range ($/bu)

PRICE DISTRIBUTION DECEMBER CORN FUTURES: 1980-1999

GRAIN PRICE UPDATE

WHEAT BALANCE SHEETITEM 95/96 96/97 97/98 98/99 99/00

PLANTED 69.1 75.6 70.4 65.8 62.8

HARVESTED 60.9 62.9 62.8 59.0 53.9

YIELD 35.8 36.3 39.5 43.2 42.7

PRODUCTION 2,183 2,285 2,481 2,547 2,302

BEGIN STOCKS 507 376 444 722 946

SUPPLY 2,757 2,753 3,020 3,373 3,343

FOOD 883 892 914 908 925

FEED 153 314 251 396 286

SEED 104 103 92 81 92

EXPORTS 1,241 1,001 1,040 1,042 1,090

DEMAND 2,381 2,310 2,298 2,427 2,393

END STOCKS

376

444

722

946

950

PRICE $4.55 $4.30 $3.38 $2.65 $2.48

WASDE, 9/12/00, <http://usda.mannlib.cornell.edu/usda/usda.html>

GLOBAL WHEAT ENDING STOCKS

0

20

40

60

80

100

120

140

160

180

200

80/81

81/82

82/83

83/84

84/85

85/86

86/87

87/88

88/89

89/90

90/91

91/92

92/93

93/94

94/95

95/96

96/97

97/98

98/99

99/00

00/01

GRAIN PRICE UPDATE

WHEAT SUPPLY AND DEMAND99-00 00-01

ITEM SEPT MAR MAY JUN JUL AUG SEP

PLANT 62.8 61.7 61.7 61.7 62.9 62.9 62.9

HARVEST 53.9 53.5 52.5 52.5 54.4 54.4 54.4

YIELD 42.7 39.6 42.6 42.1 41.2 41.6 42.3

PRODN 2,302 2,119 2,239 2,212 2,243 2,263 2,302

BEG STOCKS 946 997 938 917 950 950 950

IMPORT 90 100 95 100 100 100 100

SUPPLY 3,338 3,216 3,272 3,229 3,293 3,313 3,352

FOOD 910 915 925 935 935 940 940

SEED 90 90 85 85 86 86 86

FEED 325 395 300 275 225 225 225

EXPORT 1,075 1,050 1,125 1,125 1,100 1,100 1,125

DEMAND 2,400 2,450 2,435 2,420 2,346 2,351 2,376

END STOCK 938 766 837 809 947 962 976

AVE PRICE 2.50 2.94 2.70 2.65 2.50 2.50 2.50

WASDE, 9/12/00, <http://usda.mannlib.cornell.edu/usda/usda.html>

GRAIN PRICE UPDATE

WHEAT STOCKS AND PRICE

U.S. Ending Stocks (mil bu)

U.S

. Sea

son

Ave

rage

Cas

h P

rice

($/

bu)

2.00

2.25

2.50

2.75

3.00

3.25

3.50

3.75

4.00

4.25

4.50

4.75

5.00

300 350 400 450 500 550 600 650 700 750 800 850 900 950 1000

95-96

96/97

89/90

94/95

91/92

92/93 93/94

97/98

90/91

98/99

Price = 15.89 – 1.95 * Ln (Ending Stocks)

R2 = 0.82

YEAR STOCKS PRICE 89/90 536 3.72 90/91 869 2.61 91/92 476 3.24 92/93 531 3.24 93/94 568 3.17 94/95 507 3.45 95/96 376 4.55 96/97 444 4.30 97/98 722 3.38 98/99 946 2.65 99/00 950 2.48

Southeast Virginia Weekly Average Wheat Price: 1980-1999

280

290

300

310

320

330

340

3501 4 7 10

13

16

19

22

25

28

31

34

37

40

43

46

49

52

Week Starting in June

GRAIN PRICE UPDATE

WHEAT STORAGE

JUNE 12, 2000 $/BU

DEC. WHEAT FUTURES 2.94

WAKEFIELD CASH 2.11

BEGIN JUNE BASIS -0.83

END DEC. BASIS (-20 TO –50) -0.34

BASIS CHANGE 0.49

STORAGE COSTS 0.23

2¢ MONTH * 6 MONTHS = 0.12

$2.11 * .10 * 6/12 = 0.11

RETURNS TO STORAGE 0.26

GRAIN PRICE UPDATE

SELL CASH AND BUY DEC. CALL OPTION

JUNE 12, 2000 $/BU

WAKEFIELD CASH 2.11

DEC. FUTURES 2.94

290 DEC. CALL OPTION 0.21

300 DEC. CALL OPTION 0.17

SEPTEMBER 19, 2000

WAKEFIELD CASH 1.82

DEC. FUTURES 2.49

290 DEC. CALL OPTION 0.02

GRAIN PRICE UPDATE

WHEAT SUPPLY AND DEMAND00-01* 01-02**

ITEM SEPT SEPT 00

PLANT 62.9 61.4

HARVEST 54.4 53.6

YIELD 42.3 42.0

PRODN 2,302 2,251

BEG STOCKS 950 976

IMPORT 100 100

SUPPLY 3,352 3,327

FOOD 940 975

SEED 86 85

FEED 225 225

EXPORT 1,125 1,100

DEMAND 2,376 2,385

END STOCK 976 942

AVE PRICE 2.50 2.50

*WASDE, SEPT. 2000. ** SPARKS COMMODITIES, 9/15/00

GRAIN PRICE UPDATE

WHEAT JULY 2000 CHART

GRAIN PRICE UPDATE

WHEAT JULY 2001 CHART

GRAIN EXPORTS

0

500

1000

1500

2000

2500

3000

75/76

77/78

79/80

81/82

83/84

85/86

87/88

89/90

91/92

93/94

95/96

97/98

99/00

MARKETING YEAR

CORN BEANS WHEAT