KSU Soybean Market Outlook in July 2014

An analysis of U.S. and World soybean supply-demand factors and 2014 price prospects following the USDA’s July 11th Crop Production and World Agricultural Supply Demand Estimates (WASDE) reports can be found on the KSU AgManager website (http://www.agmanager.info/default.asp) early next week.

Following is a summary of the article on Soybean Market Outlook – with the full article and accompanying analysis to be available likely on Monday, July 21st on the KSU AgManager website at the following web address http://www.agmanager.info/marketing/outlook/newletters/Soybeans.asp

************************

Summary

Since the USDA released its World Agricultural Supply and Demand Estimates (WASDE) report on Friday, July 11, 2014, U.S. soybean market prices have responded negatively – moving sharply lower on the day of the report, then recovering and moving in a volatile, generally sideways-to-lower trading range through July 18th. Until the end of June, U.S. soybean prices in 2014 had been supported by continued Chinese demand and uncertainty about 2014 crop production prospects in the United States. However, both old and new crop soybean market prices have moved sharply lower in anticipation of burdensome market supplies in Fall 2014.

USDA U.S. Soybean Forecast for “Old Crop” MY 2013/14

Adjustments were also made to several “current” 2013/14 marketing year usage categories, including projected imports (85 million bushels or ‘mb’), domestic crushings (1.725 billion bushels or ‘bb’ – up mb), exports (1.620 bb – up 20 mb), residual (-69 mb, down from 0 mb), ending stocks (140 mb – up 15 mb), ending stocks-to-use (4.14% – up from 3.68%), and average price ($13.00 – down $0.10 per bu). The negative soybean residual figure raises questions about potential adjustments to supply or use categories in the 2013/14 U.S. soybean balance sheet in future WASDE reports.

USDA U.S. Soybean Forecast for “New Crop” MY 2014/15

In these reports, forecasts of U.S. 2014 planted (84.839 million acres or ‘ma’) and harvested (84.058 ma) acres from the June 30th USDA Acreage report were used along with internal projections of 2014 soybean yields and production – figures that are still uncertain and subject to change in upcoming USDA reports. U.S. soybean production in 2014 was forecast to be a record high 3.800 bb – up 511 mb from a year earlier. Domestic crush was projected to be 1.755 bb – up 40 mb from the June WASDE, while exports were forecast to be 1.620 bb, up 55 mb from a year ago.

Forecast “new crop” 2014/15 ending stocks were also raised to 415 mb (up 90 mb from June, and up 275 mb from a year ago), while ending stocks-to-use were projected to be 11.7% (up from 9.4% in June, and from 4.14% in MY 2013/14).  The USDA forecast that “new crop” MY 2014/15 average prices will be $9.50-$11.50 with a midpoint of $10.50 – down $0.25 /bu from June. It is important to remember that the first actual survey-based projection of 2014 U.S. soybean production will be available in the August 12th USDA Crop Production and WASDE reports.

http://1.bp.blogspot.com/-dqtgPpoOjoc/UDWYXgVoP0I/AAAAAAAAADM/yXbnn62ZWvQ/s640/94c4078+(soybean+field3).jpg

A U.S. Soybean Field in August 2012 (Source: http://isaaablog.blogspot.com/2012)

 

KSU U.S. Soybean Forecast for “New Crop” MY 2014/15

KSU forecasts for “new crop” MY 2014/15 are as follows:

a) “Likely Production” Scenario: 50% prob. of 84.839 ma planted ac., 84.058 ma harvested ac., 43.0 bu/ac yield, 3.614 bb 2014 U.S. soybean crop, 3.774 bb U.S. soybean supplies, 1.720 bb crush, 1.625 bb exports, 3.456 bb total use, 318 mb ending stocks, 9.2% S/U, & $10.75 /bu;

b) “High Production” Scenario: 35% prob. of 85.058 ma planted ac., 84.983 ma harvested ac., trend yields of 44.3 bu/ac, 3.765 bb 2014 U.S. soybean crop, 3.920 bb U.S. soybean supplies, 1.755 bb crush, 1.675 bb exports, 3.541 bb total use, 379 mb ending stocks, 10.7% S/U, & $10.00 /bu, and

c) “Low Production” Scenario: 15% prob. of 83.906 ma planted, 83.133 ma harvested, lower yields of 39.0 bu/ac, 3.242 bb 2014 U.S. soybean crop, 3.412 bb U.S. soybean supplies, 1.600 bb crush, 1.500 bb exports, 3.202 bb total use, 210 mb ending stocks, 6.6% S/U, & $11.75 /bu.

 

http://www.ozy.com/pictures/anyx296/5/0/9/8509_42-44816539.jpg

South American Export Infrastructure (Source: http://www.ozy.com/wildcard/ozy-on-latin-america/)

 

World Soybean Supply-Demand

World production of 304.8 mmt in “new crop” MY 2014/15 is projected to be up from 283.9 mmt in “current” MY 2013/14, and from 268.0 mmt in MY 2012/13. Projected World soybean ending stocks of 85.3 mmt (30.1% S/U) in “new crop” MY 2014/15 are up from 67.2 mmt (24.9% S/U) in “current” MY 2013/14, and up from 56.8 mmt (22.0% S/U) in MY 2012/13.

Combined “new crop” MY 2014/15 soybean production for major export competitors Brazil (91.0 mmt – up 3.5 mmt) and Argentina (54.0 mmt – unchanged) is projected to be up 3.5 mmt. That said, with a large 2014 U.S. soybean crop harvest anticipated to be available in World grain export markets in Fall 2014 through late winter-spring 2015, and larger South American carryover stocks expected from “old crop” MY 2013/14, it is anticipated that World soybean production and supplies will be larger and prices sharply lower in “new crop” MY 2014/15 than a year ago.

http://bradmangas.com/wp-content/uploads/2010/07/RLSU_5670.jpg

Kansas Country Roads – Pictures by Brad Mangas (Source: http://bradmangas.com/kansas-country-roads/)

KSU Corn Market Outlook in July 2014

An analysis of U.S. and World corn supply-demand factors and 2014 price prospects following the USDA’s July 11th USDA Crop Production and World Agricultural Supply Demand Estimates (WASDE) reports is available on the KSU AgManager website  (http://www.agmanager.info/default.asp).

Following is a summary of the article on “Corn Market Outlook in July 2014″ with the full article and accompanying analysis will soon be available on the KSU AgManager website at the following web address: http://www.agmanager.info/marketing/outlook/newletters/archives/GRAIN-OUTLOOK_07-15-14_Corn.pdf

************************

Summary

Since the USDA released its World Agricultural Supply and Demand Estimates (WASDE) report on Friday, July 11, 2014, U.S. corn market prices have responded negatively – moving sharply lower on the day of the report, and then recovering some earlier losses the following trading day (i.e., Monday, July 14).

USDA U.S. Corn Forecast for “Old Crop” MY 2013/14

Adjustments were also made to several “current” MY 2013/14 usage categories, including projected ethanol corn use (5.175 million bushels or ‘mb’ – down 25 mb), feed and residual use (5.175 billion bushels or ‘bb’ – down 125 mb), ending stocks (1.246 bb – up 100 mb), ending stocks-to-use (9.2% – up from 8.4%), and average price ($4.35-$4.55 – down $0.10 per bushel).

USDA U.S. Corn Forecast for “New Crop” MY 2014/15

The USDA used forecasts of U.S. 2014 planted (91.641 million acres or ‘ma’) and harvested (83.839 ma) from the June 30th USDA Acreage report along with internal projections of record high 2014 U.S. corn yields and production – figures that are still uncertain and subject to change in upcoming USDA reports. The USDA projected 2014 U.S. corn production of 13.860 bb – down 65 mb from a year earlier. Feed usage in “new crop” MY 2014/15 was projected to be 5.200 bb – down 75 mb from the June WASDE. “New crop” ending stocks and ending stocks-to-use were also raised to 1.801 bb (up 75 mb) and 13.5% (up from 12.9%), respectively. The USDA forecast that “new crop” MY 2014/15 average prices will be $3.65-$4.35 with a midpoint of $4.00 – down $0.20 /bu from June. As useful at these July report numbers are, it is important to remember that the first actual survey-based projection of 2014 U.S. corn production will be available in the August 12th USDA Crop Production and WASDE reports.

http://nationalhogfarmer.com/site-files/nationalhogfarmer.com/files/imagecache/medium_img/uploads/2013/09/dsc4250-sized.jpg

A Corn Field in the U.S. Cornbelt Corn in Fall 2013 (Source: http://nationalhogfarmer.com/nutrition/usda-forecasts-largest-corn-crop-record)

KSU U.S. Corn Forecast Scenarios for “New Crop” MY 2014/15

KSU projections for “new crop” MY 2014/15 are as follows:

a) “Likely Production” Scenario: 50% prob. of 91.641 ma planted, 83.839 ma harvested, trend yields of 159.4 bu/ac, 13.364 bb 2014 U.S. corn production, 14.640 bb U.S. corn supplies, 1.700 bb exports, 13.310 bb total use, 1.330 bb ending stocks, 10.0% S/U, & $4.35 /bu;

b) “High Production” Scenario: 35% prob. of 92.891 ma planted, 84.983 ma harvested, yields of 164.4 bu/ac, 13.971 bb 2014 U.S. corn production, 15.237 bb U.S. corn supplies, 1.800 bb exports, 13.585 bb total use, 1.652 bb ending stocks, 12.2% S/U, & $4.10 /bu, and

c) “Low Production” Scenario: 15% prob. of 90.391 ma planted, 82.695 ma harvested, lower yields of 149.4 bu/ac, 12.355 bb 2014 U.S. corn production, 13.651 bb U.S. corn supplies, 1.400 bb exports, 12.525 bb total use, 1.126 bb ending stocks, 9.0% S/U, & $4.90 /bu.

World Corn Supply-Demand

World Corn Total Supplies of 1,154 mmt in “new crop” MY 2014/15 are projected to be up from 1,123 mmt in “current” MY 2013/14, and up from 1,003 mmt in MY 2012/13. Projected World corn ending stocks of 118.1 mmt (19.5% S/U) in “new crop” MY 2014/15 are up from 173.4 mmt (18.3% S/U) in “current” MY 2013/14, and up from 138.2 mmt (16.0% S/U) in MY 2012/13. Combined “new crop” MY 2014/15 corn production for major export competitors Brazil (74.0 mmt – down 4.0) and Argentina (26.0 mmt – up 2.0) is projected to be down 2.0 mmt. However, with a large 2014 U.S. corn crop harvest anticipated to be available in World grain export markets in late winter-spring 2015, and no major threats having yet emerged to U.S. or foreign corn production so far in 2014, it is anticipated that World corn production and supplies will be larger and prices sharply lower in MY 2014/15 than a year ago.

Final Comments

Although moderate concerns about crop development have emerged in parts of the upper Midwestern states due to excessive moister, at this time these worries are not great enough to provide much support for corn prices. Absent an unforeseen major downturn in 2014 U.S. corn production and price prospects, it seems likely that U.S. corn markets are moving toward a low price period similar to the fall of 2008, a marketing year in which U.S. corn prices were at or below $4.00 per bushel for at least a moderate period of time.

http://westernfarmpress.com/site-files/westernfarmpress.com/files/imagecache/large_img/uploads/2012/12/corn-bins-and-combine.jpg

Anticipating the upcoming 2014 U.S. corn harvest (Source: http://westernfarmpress.com/markets/)

 

Results and Implications of the USDA Acreage and Quarterly Stocks Reports of 6/30/2014

 

Following is a KSU Summary with market implications stemming from the USDA National Agricultural Statistical Service (NASS) Acreage and Quarterly Stocks reports.  The full report is available on the KSU Agmanager.info website (http://www.agmanager.info/) at the following web address:

http://www.agmanager.info/marketing/outlook/newletters/archives/GRAIN-OUTLOOK_07-07-14_Acreage-Stocks.pdf

********************

Summary

On June 30th the USDA National Agricultural Statistics Service (NASS) released its Acreage and Grain Stocks reports. The 2014 Acreage report provided the second actual survey-based information by the USDA on U.S. farmer’s cropping intentions for 2014, following the March 31st Prospective Plantings report. The Quarterly June 1st 2014 Grain Stocks report provided grain markets with improved information on the pace of usage of U.S. corn, grain sorghum, wheat, soybeans, and other major crops in their respective 2013/14 marketing years. As a result of these June 30th USDA reports, adjustments are likely occur to in the upcoming July 11th USDA World Agricultural Supply and Demand Estimates (WASDE) report – particularly for “new crop” 2014/15 marketing year U.S. soybean and grain sorghum supply-demand balances and prices.

USDA Acreage Report on June 30th

The Acreage report projected 2014 U.S. corn planted acreage to be 91.641 million acres (ma), down marginally from pre-report trade expectations, and down from 95.365 ma in 2013, and the record high of 97.155 ma in 2012. Forecast harvested acres of corn in 2014 of 83.839 ma were down from 87.375 – 87.668 ma the previous two years. Planted acres of soybeans in 2014 were forecast to be a record high 84.839 ma, above the top end of the pre-report average trade estimates, and up from 76.533 ma in 2013 and 77.198 ma in 2012. Expected 2014 plantings of other spring wheat of 12.709 ma were also above the top end of the pre-report trade estimates, and up from 11.596 ma in 2013, and 12.289 ma in 2012. Projected planted acres of grain sorghum in 2014 are 7.471 ma, up 790,000 acres from the 3/31 Prospective Plantings estimate, but down from 8.061 ma in 2013, while up from 6.244 ma in 2012. Harvested acres of grain sorghum in 2014 of 6.399 ma are projected to be down from 6.530 ma in 2013, but up from 6.244 ma in 2012.

http://ethanolproducer.com/uploads/posts/magazine/2014/02/CornField-ethanol-0314_1391461602624.jpg

U.S. Corn Field (Source: http://ethanolproducer.com/articles/10708/obligation-outcomes)

USDA Quarterly Stocks Report on June 30th

The Quarterly Grain Stocks report estimated that U.S. corn stocks on June 1st were 3.854 billion bushels (bb), up from 2.766 bb a year ago. Corn use during March-May 2014 was 3.154 bb, up from 2.634 bb in Mar-May 2013 and 2.886 bb in Mar-May 2012. Projected U.S. soybean stocks on June 1st were 405 mb, down from 435 mb a year ago. Soybean use during March-May 2014 was 589 mb, up from 563 mb in Mar-May 2013, but down from 712 mb in Mar-May 2012. Projected U.S. wheat stocks on June 1st were 590 mb, down from 718 mb a year ago. Wheat use during March-May 2014 was 467 mb, down from 517 mb in Mar-May 2013, and down from 486 mb in Mar-May 2012. Projected U.S. grain sorghum stocks on June 1st were 92 mb, up from 42 mb a year ago. Grain sorghum use during March-May 2014 was 83 mb, up from 50 mb in Mar-May 2013, and from 50 mb in Mar-May 2012.

http://us.123rf.com/400wm/400/400/fotokostic/fotokostic1106/fotokostic110600020/9810430-soybean-field-with-rows-of-soya-bean-plants.jpg

A U.S. biotech Soybean Field in 2012 (Source: http://isaaablog.blogspot.com/2012_08_01_archive.html)

KSU Probability-Weighted Corn, Soybean and Wheat Supply-Demand and Price Forecasts

As a result of these reports, KSU supply-demand balance and price forecasts for “new crop” MY 2014/15 were adjusted from early June projections. The U.S. 2014 corn production forecast was lowered slightly due to lower planted acreage, while higher planted acreage for soybeans, grain sorghum, and wheat led to higher 2014 crop production forecasts. For U.S. corn prices, the KSU “new crop” 2014/15 marketing year “likely” scenario was lowered $0.20 to $4.20 per bu from a month ago. The “likely” KSU soybean price forecast outcome in “new crop” MY 2014/15 was lowered $0.75 to $9.25 per bu. For U.S. wheat prices, the KSU “new crop” 2014/15 marketing year “likely” scenario outcome was lowered $0.95 down to $6.55 per bu from a month ago.
Barring unforeseen major crop production problems in the U.S., South America, the Black Sea region, China, Australia, or other major grain importing and/or exporting regions of the World, grain and oilseed prices are likely to continue to move lower into fall 2014 until or unless either a) lower prices of grains encourage demand, b) weather problems and associated crop production losses occur among the World’s major grain producing or using countries, or c) international geopolitical conflicts support grain markets.

http://hubbubblog.files.wordpress.com/2011/10/grain-elevator.jpg?w=640

World’s Largest Grain Elevator in Hutchinson, Kansas (Source: http://hubbubblog.wordpress.com/2011/10/23/what-i-talk-about-when-i-talk-about-kansas/)

 

KSU Soybean Market Outlook in June 2014

An analysis of U.S. and World soybean supply-demand factors and 2014 price prospects following the USDA’s June 11th Crop Production and World Agricultural Supply Demand Estimates (WASDE) reports can be found on the KSU AgManager website (http://www.agmanager.info/default.asp).

Following is a summary of the article on Soybean Market Outlook – with the full article and accompanying analysis to be available on by the afternoon of Thursday, June 19th on the KSU AgManager website at the following web address http://www.agmanager.info/marketing/outlook/newletters/Soybeans.asp

************************

Summary

When the USDA released its World Agricultural Supply and Demand Estimates (WASDE) report on June 11, 2014, U.S. soybean market prices initially responded negatively, and have since move sideways-to-lower. The USDA made only small changes in its supply-demand projections for U.S. soybeans for the “new crop” 2014/15 marketing year – maintaining its expectation of a large 2014 U.S. soybean crop with sharply lower prices at harvest. The USDA also forecast that World soybean supply-demand balances will grow, as large Brazilian and Argentina crops are projected for spring-early summer 2015. Given these USDA projections, a number of key soybean market factors in “new crop” MY 2014/15 are still unknown, including a) final 2014 U.S. soybean planted acreage, b) uncertainty regarding MY 2014/15 U.S. and South American soybean production prospects should an El Nino-related weather pattern occur in late 2014 as is now forecast, and c) the potential impact of geopolitical conflicts in the Black Sea Region and the Middle East on commodity markets.

USDA U.S. Soybean Supply-Demand Forecast

The USDA maintained is projection of sharply higher U.S. soybean production, higher usage, a large increase in U.S. soybean ending stocks and % ending stocks-to-use, and markedly lower prices in “new crop” MY 2014/15 versus a year earlier. The USDA’s projected “new crop” MY 2014/15 scenario is: 81.5 million acres (ma) planted, 80.5 ma harvested, 99.2% harvested-to-planted acres, record high 45.2 bu/ac U.S. yields, a record 3.635 billion bushel (bb) 2014 U.S. soybean crop, 3.775 bb total supplies, 1.625 bb exports, 3.450 bb total use, 325 million bushel (mb) ending stocks, 9.4% ending stocks-to-use, and $10.75 average price per bu. (range of $9.75 to $11.75). If actual 2014 U.S. soybean production is less than this projection, then price prospects could improve considerably. Ending stocks balances for “current” MY 2013/14 are extremely “tight” at 125 mb (down 5 mb), with a record low 3.68% % ending stocks-to-use.

http://openmarkets.cmegroup.com/wp-content/uploads/soybean-field1.jpg

U.S. Soybean Field in 2012 (Source: http://openmarkets.cmegroup.com/)

KSU U.S. Soybean Forecast for “New Crop” MY 2014/15

Kansas State University projections of “next crop” MY 2014/15 supply-demand balances and prices are as follows: a) “Likely Production” Scenario: 60% prob. of 81.5 ma planted, 98.7% harvested, expected yield of 43.0 bu/ac, 3.460 bb 2014 U.S. production, 3.605 bb U.S. total supplies, 1.550 bb exports, 3.345 bb total use, 260 mb ending stocks, 7.8% S/U, & $10.00 /bu; b) “High Production” Scenario: 20% prob. of 83.1 ma planted, 98.7% harvested, yields of 44.3 bu/ac, 3.636 bb 2014 U.S. production, 3.776 bb U.S. total supplies, 1.650 bb exports, 3.465 bb total use, 311 mb ending stocks, 9.0% S/U, & $9.75 /bu., and c) “Low Production” Scenario: 20% prob. of 79.9 ma planted, 98.7% harvested, low yields of 39.0 bu/ac, 3.076 bb 2014 U.S. production, 3.231 bb U.S. total supplies, 1.350 bb exports, 3.095 bb total use, 136 mb ending stocks, 4.4% S/U, & $15.00 /bu.

World Soybean Supply-Demand

World Soybean Total Supplies of 367 mmt in “new crop” MY 2014/15 are up from 341 mmt in “current year” MY 2013/14, and up from 321 mmt in MY 2012/13. Projected World soybean ending stocks of 82.9 mmt (29.5% S/U) in “new crop” MY 2014/15 are up from 67.2 mmt (22.7% S/U) in “current year” MY 2013/14, and up from 57.0 mmt (22.0% S/U) in MY 2012/13. Forecast total MY 2014/15 soybean production for major export competitors Brazil (91.0 mmt – up 3.5 mmt) and Argentina (54.0 mmt – unchanged) is projected to be 7.7% higher in the coming year – with harvests available for use in the early months of 2015 to compete with the U.S. in World grain export markets. These projections are still uncertain given the possibility of a strong El Nino event beginning in mid-2014 which could affect both U.S. and South American crop prospects in 2015.

http://www.shippingtribune.com/wp-content/uploads/2013/02/panamax3.jpg

A Panamax Ocean Vessel Such As Is Used to Ship Soybeans to China (Source: http://www.shippingtribune.com/)

U.S. & World Soybean Market Outlook for 2014-2015

U.S. soybean prices thus far in 2014 have been supported by continued Chinese demand and uncertainty about 2014 crop production prospects in the United States. Price weakness or at least “moderation” in soybean prices is likely to occur in the late spring-summer of 2014 IF the record large 2014 South American soybean crop is moved into export channels in a timely-efficient manner, and if prospects develop through the summer months for a large 2014 U.S. soybean crop to be produced.

There have been two successively larger record years of combined Brazil and Argentina soybean supplies, i.e., 131.3 million metric tons (mmt) in MY 2012/13, and 141.5 mmt for “current” MY 2013/14. Now in the May and June WASDE reports the USDA has projected that combined soybean production for these two countries will be even higher in “new crop” MY 2014/15 – up to 145.0 mmt, which would be up 10.4% over the three year period. This compares to U.S. soybean production of 82.6 mmt in MY 2012/13, 89.5 mmt in “current” MY 2013/14, and a projected amount of 98.9 mmt in “new crop” MY 2014/14 – up 19.8% over the same three year period. Also, the key market demand “driver” of Chinese soybean imports were estimated to be 59.9 mb in MY 2012/13, and 69.0 mb in “current” MY 2013/14, and are projected to be 72.0 mb in “new crop” MY 2014/15 – up 20.3% over the same three marketing years.

It is widely acknowledged by soybean market analysts that continued growth and/or at least sustainability of Chinese soybean imports at current and projected levels by the USDA is necessary for continuance of the historically high World soybean prices that have occurred since the 2012/13 marketing year. Rumors exist of slowing Chinese soybean import demand due to swine industry production problems or other economic or financial factors. However, given the information available to the USDA at this time, the agency has projected a continuance of the strong growth trend in Chinese imports in “new crop” MY 2014/15 in its May and June WASDE reports. If this recent upward trend in Chinese soybean imports were to falter for whatever reason, it could have a substantial negative impact on U.S. and World soybean market prices.

The timing and availability of the bulk of exportable South American soybean supplies will be a key market factor for the remainder of 2014. This year will the Brazilian export system be able to handle large supplies of soybeans, corn and other products in a more efficient and timely manner than occurred in 2013? At present there are fewer reports of logistical problems occurring in South American ports than a year ago. Both USDA and KSU price forecast scenarios for soybeans assume that there will be continued strength of soybean import demand from China and elsewhere – and that there will be an avoidance of South American grain export logistical problems of the same degree as occurred a year ago.

In conclusion, U.S. soybean prices thus far in 2014 have been supported by continued Chinese export demand and at least some uncertainty to date regarding 2014 crop production prospects in the United States. Price weakness or at least “moderation” in soybean prices is likely to occur in the late spring-summer of 2014 IF what is shaping up to be a record high 2014 South American soybean crop is moved into export channels in a timely-efficient manner, and if prospects develop through the summer months for a large 2014 U.S. soybean crop to be produced.

http://monroenews.media.clients.ellingtoncms.com/img/photos/2013/10/02/monroe-5nsquue3hgz14m3n035h_original_t670.jpg?b3f6a5d7692ccc373d56e40cf708e3fa67d9af9d

Soybean Harvest in Michigan in 2013 (Source: http://www.monroenews.com/)

 

KSU Corn Market Outlook in June 2014

An analysis of U.S. and World corn supply-demand factors and 2014 price prospects following the USDA’s June 11th USDA Crop Production and World Agricultural Supply Demand Estimates (WASDE) reports will be available on the KSU AgManager website   (http://www.agmanager.info/default.asp).

Following is a summary of the article on “Corn Market Outlook in June 2014″ with the full article and accompanying analysis will be available on the KSU AgManager website at the following web address http://www.agmanager.info/marketing/outlook/newletters/Corn.asp

************************

Summary

Since the USDA released its World Agricultural Supply and Demand Estimates (WASDE) report on June 11, 2014, U.S. corn market prices have moved sideways-to-lower. After trading as low as $4.39 ¼ /bu on June 11th, “old crop” July 2014 corn futures traded as low as $4.35 ½ on June 17 – down to the lowest level since January 21st. “New crop” December 2014 corn futures traded as low as $4.39 /bu on June 11th, and traded down to $4.36 ¼ on June 17th – down to the lowest level since January 10th.

The USDA made no changes in its projected U.S. corn supply-demand balance sheets for the “new crop” 2014/15 marketing year. The USDA continued to use U.S. 2014 planted acreages from the March 31st USDA Prospective Plantings report along with staff projections of record high 2014 U.S. corn yields and production – figures that are still uncertain. For “new crop” MY 2014/15, the USDA projected record high U.S. and World corn production, moderating usage, higher ending stocks, and lower prices versus a year earlier. The June 30th USDA Acreage and Quarterly Stocks reports are likely to cause changes in U.S. corn supply-demand estimates in the upcoming July 11th WASDE report. Even then, the first survey-based projection of 2014 U.S. corn production will not be available until the August 12th USDA NASS Crop Production and WASDE reports.

http://www.hoosieragtoday.com//wp-content/uploads//2014/05/corn-field-wet.jpg

Wet Soils Conditions in Indiana for Corn in 2014 (Source: http://www.hoosieragtoday.com/farmers-should-scout-wet-soils/)

USDA U.S. Corn Forecast for “New Crop” MY 2014/15

The USDA left unchanged is forecast “new crop” MY 2014/15 U.S. supply-demand balances and prices. The USDA projected 91.7 million acres (ma) planted, 84.3 ma harvested, 91.9% harvested-to-planted acres, record high 165.3 bu/ac yields, a 13.935 billion bushel (bb) 2014 U.S. corn crop, 15.111 bb total supplies, 1.700 bb exports, 13.385 bb total use, 1.726 bb ending stocks, 12.9% ending stocks-to-use, and $4.20 average price per bu. ($3.85 to $4.55).

KSU U.S. Corn Forecast for “New Crop” MY 2014/15

KSU projections for “new crop” MY 2014/15 are as follows: a) “Likely Production” Scenario: 60% prob. of 91.7 ma planted, 91.9% harvested acres, trend yields of 159.4 bu/ac, 13.437 bb 2014 U.S. corn production, 14.613 bb U.S. corn supplies, 1.600 bb exports, 13.210 bb total use, 1.403 bb ending stocks, 10.6% S/U, & $4.40 /bu; b) “Low Production” Scenario: 15% prob. of 89.9 ma planted, 91.9% harvested acres, lower yields of 149.4 bu/ac, 12.355 bb 2014 U.S. corn production, 13.551 bb U.S. corn supplies, 1.400 bb exports, 12.575 bb total use, 976 mb ending stocks, 7.76% S/U, & $6.00 /bu; and c) “High Production” Scenario: 25% prob. of 93.4 ma planted, 91.9% harvested acres, yields of 164.4 bu/ac, 14.122 bb 2014 U.S. corn production, 15.288 bb U.S. corn supplies, 1.700 bb exports, 13.535 bb total use, 1.753 bb ending stocks, 12.95% S/U, & $4.15 /bu.

World Corn Supply-Demand Situation

World Corn Total Supplies of 1,150 mmt in “new crop” MY 2014/15 are up from 1,120 mmt in MY 2012/13, and up from 1,003 mmt in MY 2011/12. Projected World corn ending stocks of 182.7 mmt (18.9% S/U) in MY 2014/15 are up from 169.1 mmt (17.8% S/U) in MY 2013/14, and up from 138.1 mmt (16.0% S/U) in MY 2011/12. Combined “new crop” MY 2014/15 corn production for major export competitors Brazil (74.0 mmt – down 2.0) and Argentina (26.0 mmt – up 2.0) is projected to be unchanged – with harvests with the U.S. in World grain export markets in late winter-spring 2015. However, these projections are still uncertain given the possibility of a strong El Nino event beginning in mid-2014.

Current Corn Market Unknowns & Potential Sources of Volatility

A number of key corn market factors in “new crop” MY 2014/15 are still unknown, including a) final 2014 U.S. corn planted acreage, b) uncertainty regarding 2014 U.S. and World corn production prospects should an El Nino-related weather patterns occur in 2014 as is now forecast, and c) the potential impact of ongoing and escalating geopolitical conflicts in the Black Sea Region between major World coarse grain and wheat exporters Russia and the Ukraine, as well as in the Middle East. Escalating conflict in the Middle East could impact World oil and U.S. bioenergy market prices, and have a corresponding impact on feedgrain markets.

http://farmfutures.com/cdfm/Faress1/author/2/2012/7/brazil_cover_corn_shortage_1_634789949782629830.jpg

Brazil Corn Exports in 2012 (Source: http://farmfutures.com/story-brazil-cover-corn-shortage-17-61949)

 

KSU U.S. Grain Sorghum and World Coarse Grain Market Outlook

An analysis of U.S. grain sorghum and World coarse grain supply-demand factors and 2014 price prospects prior to the USDA’s June 11th World Agricultural Supply Demand Estimates (WASDE) report can be found on the KSU AgManager website (http://www.agmanager.info/default.asp).

Following is a summary of the article on U.S. Grain Sorghum and World Coarse Grain Market Outlook – with the full analysis-article available on the KSU AgManager.info website – to be found at http://www.agmanager.info/marketing/outlook/newletters/Sorghum.asp

************************

Summary

Since the USDA released its Crop Production and World Agricultural Supply and Demand Estimates (WASDE) reports on May 9, 2014, U.S. corn and grain sorghum market prices have moved lower after having been trending sharply higher since January 10, 2014. On May 9th the USDA made its first projections of “new crop” 2014/15 marketing year supply-demand and market forecasts for U.S. and World corn, grain sorghum and other coarse grains. The USDA used U.S. 2014 planted acreages from the March 31st USDA Prospective Plantings report along with in-house, non-survey based projections of 2014 U.S. grain sorghum yields and production. In these “new crop” MY 2014/15 forecasts, the USDA projected a marginal increase in U.S. grain sorghum ending stocks, and lower prices versus a year earlier.

A number of key grain sorghum and other feedgrain market factors in “new crop” MY 2014/15 are still unknown, including a) final 2014 U.S. grain sorghum and corn planted acreage, b) uncertainty regarding 2014 and 2015 U.S. and World coarse grain production prospects should an El Nino-related weather pattern occur in mid-to-late 2014 as is now forecast, and c) the potential impact of ongoing and escalating geopolitical conflicts in the Black Sea Region between major World coarse grain and wheat exporters Russia and the Ukraine.

http://www.kssorghum.com/wp-content/uploads/2012/06/D3T3258.jpg

Kansas Grain Sorghum Field in 2012 (Source: http://www.kssorghum.com/2012/02/top-grain-sorghum-producing-counties-in-kansas/)

USDA U.S. Grain Sorghum Market Forecast

The USDA projected that 2014 U.S. grain sorghum production would be 360 million bushels (mb) – down 29 mb from 389 mb in 2013, but up from 247 mb in 2012. This forecast was based on lower projected U.S. planted and harvested acreage of 6.681 and 5.6 million acres (ma), respectively, and U.S. grain sorghum yields of 64.3 bu/ac – up from 59.6 and 49.8 bu/ac the previous two years. The USDA made its initial forecasts of “new crop” MY 2014/15 total supplies (379 mb – down 25 mb versus a year ago), exports (160 mb – down 20 mb), FSI (105 mb – up 10 mb), feed and residual (90 mb – down 20 mb), and total use (355 mb – down 30 mb), leading to projected ending stocks of 24 mb – up from 19 mb last year. Projected % ending stocks-to-use of 6.76% in “new crop” MY 2014/15 are up from 4.93% for “current” MY 2013/14. The USDA projected U.S. average grain sorghum prices for “new crop” MY 2014/15 of $3.60-$4.30 bu/ac (midpoint = $3.95), which is down 37.6% from the record high of $6.33 in MY 2012/13.

Kansas State University Grain Sorghum Market Forecast

KSU projections of 2013 U.S. grain sorghum production and “new crop” MY 2014/15 supply-demand and price scenarios are: a) “Low Production” Scenario: 20% prob. of a 294 mb U.S. sorghum crop, 5.0% S/U, and prices of $5.25-$6.25 /bu; b) “Expected Production” Scenario: 60% prob. a 364 mb U.S. grain sorghum crop (equal to USDA), 7.0% S/U, and prices of $3.65-$4.65 /bu; and c) “High Production” Scenario: 20% prob. of a 442 mb U.S. sorghum crop, 12.2% S/U, and prices of $3.40-$3.90 /bu.

http://www.kssorghum.com/wp-content/uploads/2011/09/landscape.jpg

Ethanol Plant in Western Kansas (Source: http://www.kssorghum.com/)

World Coarse Grain Supply-Demand Projections

Forecast global coarse grain total supplies of 1,461 mmt in “new crop” MY 2014/15 are up from 1,439 mmt in “current” MY 2013/14, and 1,307 mmt in MY 2012/13. Projected World coarse grain ending stocks of 210.5 mmt (16.8% S/U) in “new crop” MY 2014/15 are up from 203.8 mmt (16.5% S/U) in “current” MY 2013/14, and 169.5 mmt (14.9% S/U) in MY 2012/13.

http://www.cgiar.org/wp-content/uploads/2012/06/S-Sorghum.jpg

A farmer’s sorghum field in Moshi, Tanzania (Source: http://www.cgiar.org/our-research/crop-factsheets/sorghum/)

Broader Feedgrains Market Perspective

Price prospects for U.S. grain sorghum are still driven largely by expectations in the U.S. corn market for “new crop” MY 2014/15, where historically large U.S. corn production and ending stocks are forecast, along with a sizable reduction in U.S. corn and grain sorghum prices from “current” MY 2013/14. Prospects for U.S. grain sorghum production in 2014 may have been helped measurably by recent substantial rainfall in the U.S. central (Kansas) and southern (Oklahoma and Texas) plains, alleviating drought conditions.

 

KSU Corn Market Outlook in May 2014

An analysis of U.S. and World corn supply-demand factors and 2014 price prospects following the USDA’s May 9th USDA Crop Production and World Agricultural Supply Demand Estimates (WASDE) reports is available on the KSU AgManager website   (http://www.agmanager.info/default.asp).

Following is a summary of the article on “Corn Market Outlook in May 2014″ with the full article and accompanying analysis is available on the KSU AgManager website at the following web address http://www.agmanager.info/marketing/outlook/newletters/Corn.asp

************************

Summary

When the USDA released its Crop Production and World Agricultural Supply and Demand Estimates (WASDE) reports on May 9, 2014, U.S. corn market prices initially responded negatively after having been trending sharply higher since January 10, 2014. On May 9th the USDA made its first projections of “new crop” 2014/15 marketing year supply-demand and price projections for U.S. and World corn, and also made several important changes in “current” 2013/14 marketing year U.S. and World corn supply-demand estimates. The USDA used U.S. 2014 planted acreages from the March 31st USDA Prospective Plantings report along with projections of record high 2014 U.S. corn yields and production – figures that will need “good” 2014 production conditions this year to be attainable. In these “new crop” MY 2014/15 forecasts, the USDA projected record high U.S. and World corn production, moderating usage, increasing ending stocks, and lower prices versus a year earlier.

A number of key corn market factors in “new crop” MY 2014/15 are still unknown, including a) final 2014 U.S. corn planted acreage, b) uncertainty regarding 2014 U.S. and World corn production prospects should an El Nino-related weather patterns occur in 2014 as is now forecast, and c) the potential impact of ongoing and escalating geopolitical conflicts in the Black Sea Region between major World coarse grain and wheat exporters Russia and the Ukraine.

http://stmedia.startribune.com/images/630*421/corn5914.jpg

U.S. Corn Planting Progress in 2014 (Source: http://www.startribune.com/business/258657011.html)

USDA U.S. Corn Forecast for “New Crop” MY 2014/15

The USDA projected marginally larger U.S. corn production, reduced usage, an increase in U.S. corn stocks-to-use, and lower prices in “new crop” MY 2014/15. The projected MY 2014/15 supply-demand and price scenario is: 91.7 million acres (ma) planted, 84.3 ma harvested, 91.9% harvested-to-planted acres, record high 165.3 bu/ac yields, a 13.935 billion bushel (bb) 2014 U.S. corn crop, 15.111 bb total supplies, 1.700 bb exports, 13.385 bb total use, 1.726 bb ending stocks, 12.9% ending stocks-to-use, and $4.20 average price per bu. ($3.85 to $4.55). If 2014 U.S. corn wheat production prospects decline from these “top end” projections, then price prospects could improve considerably from these conservative 2014/15 price forecasts.

KSU U.S. Corn Forecast for “New Crop” MY 2014/15

KSU projections of “next crop” MY 2014/15 supply-demand balances and prices are as follows: a) “Likely Production” Scenario: 60% prob. of 91.7 ma planted, 91.9% harvested-to-planted acres, trend yields of 159.4 bu/ac, 13.437 bb 2014 U.S. corn production, 14.613 bb U.S. corn supplies, 1.600 bb exports, 13.210 bb total use, 1.403 bb ending stocks, 10.6% S/U, & $4.40 /bu; b) “Low Production” Scenario: 20% prob. of 89.9 ma planted, 91.9% harv.-to-plntd. acres, low yields of 149.4 bu/ac, 12.355 bb 2014 U.S. corn production, 13.551 bb U.S. corn supplies, 1.400 bb exports, 12.575 bb total use, 976 mb ending stocks, 7.76% S/U, & $6.00 /bu; and c) “High Production” Scenario: 20% prob. of 93.4 ma planted, 91.9% harv.-to-plntd. acres, yields of 164.4 bu/ac, 14.122 bb 2014 U.S. corn production, 15.288 bb U.S. corn supplies, 1.700 bb exports, 13.535 bb total use, 1.753 bb ending stocks, 12.95% S/U, & $4.15 /bu.

World Corn Supply-Demand & Mitigating Market Factors

World corn total supplies of 1,148 mmt in “new crop” MY 2014/15 are up from 1,117 mmt in “current year” MY 2012/13, and up from 1,003 mmt in MY 2011/12. Projected World corn ending stocks of 181.7 mmt (18.8% S/U) in “new crop” MY 2014/15 are up from 168.4 mmt (17.8% S/U) in “current year” MY 2013/14, and up from 138.2 mmt (16.0% S/U) in MY 2011/12. Forecast total MY 2014/15 corn production for major export competitors Brazil (74.0 mmt – down 1.0) and Argentina (26.0 mmt – up 2.0) is projected to be 1.0% higher in the coming year – with harvests available for use in the early months of 2015 to compete with the U.S. in World grain export markets. However, these projections are still uncertain given the possibility of a strong El Nino event beginning in mid-2014. Ongoing geopolitical problems in the Black Sea region is reported to have not had an appreciable impact on the availability of Ukraine corn to World markets, but would be a disrupting market factor in World corn and coarse grain markets if it did so.

http://www.chinadaily.com.cn/cndy/attachement/jpg/site1/20110914/f04da2db11220fda370701.jpg

Farmers drying corn in China in 2011 (Source: http://www.chinadaily.com.cn/cndy/2011-09/)

 

KSU Wheat Market Situation and Outlook – May 2014

An analysis of U.S. and World Wheat supply-demand factors and 2014 price prospects following the USDA’s May 9th Crop Production and World Agricultural Supply Demand Estimates (WASDE) reports have been placed up on the KSU AgManager website (http://www.agmanager.info/default.asp).

Following is a summary – with the full analysis-article for Wheat to be found at this web location:  http://www.agmanager.info/marketing/outlook/newletters/Wheat.asp

************************

Summary

When the USDA released its Crop Production and World Agricultural Supply and Demand Estimates (WASDE) reports on May 9, 2014, U.S. wheat market prices initially responded negatively after having been trending sharply higher since April 22nd. On May 9th the USDA made its first projections of “new crop” 2014/15 marketing year supply-demand and price projections for U.S. and World wheat, and also made small changes in “current year” 2013/14 marketing year supply-demand estimates. The USDA accounted for declining production prospects for 2014 U.S. winter wheat in its U.S. All Wheat production forecast, and also projected marginally larger foreign wheat production in “current year” MY 2013/14. However, “new crop” MY 2013/14 World and U.S. wheat production and supplies are forecast to be lower than in “current year” MY 2013/14.

A number of key what market factors in “new crop” MY 2014/15 are still unknown, including a) the possibility of further reductions in 2014 U.S. winter wheat production prospects, b) uncertainty regarding MY 2014/15 production prospects in Australia and else where should El Nino-related weather patterns occur in 2014 as is now forecast, c) the potential impact of ongoing and escalating geopolitical conflicts in the Black Sea Region between major World wheat exporters Russia and the Ukraine, and d) the possibility of more abundant U.S. feedgrain supplies in 2014 “hanging over the market” and limiting U.S. and foreign wheat feeding.

http://southwestfarmpress.com/site-files/southwestfarmpress.com/files/imagecache/medium_img/uploads/2014/03/wheatprices.jpg

Wheat being harvested in the Southwestern U.S. in Past Years (Source: http://southwestfarmpress.com/wheat/)

USDA U.S. Wheat Forecast for “New Crop” MY 2014/15: The USDA projected smaller U.S. wheat production, reduced usage, an increase in U.S. wheat stocks-to-use, and higher prices in “new crop” MY 2014/15. The USDA projected “next crop” MY 2014/15 supply-demand and price scenario is: 55.8 million acres (ma) planted, 45.9 ma harvested, 82.3% harvested-to-planted acres, 42.7 bu/ac yields, a 1.963 billion bushel (bb) 2014 U.S. wheat crop, 2.706 bb total supplies, 950 mb exports, 2.166 bb total use, 540 million bushels (mb) ending stocks, 24.9% ending stocks-to-use, and $7.30 average price per bu. ($6.65 to $7.95). If 2014 U.S. winter wheat production prospects decline further, or problems develop with the 2014 U.S. spring wheat crop, then the USDA’s supply-demand projections may tighten even further, leading to higher U.S. wheat price forecasts.

KSU U.S. Wheat Forecast for “New Crop” MY 2014/15: KSU projections of “next crop” MY 2014/15 supply-demand balances and prices are as follows: a) “Likely Production” Scenario: 60% prob. of 45.9 ma harvested, 82.3% harvested-to-planted acres, 42.7 bu/ac, 1.963 bb 2014 U.S. wheat production, 2.706 bb U.S. wheat supplies, 1.000 bb exports, 2.216 bb total use, 490 mb ending stocks, 22.1% S/U, & $7.90 /bu; b) “Low Production” Scenario: 25% prob. of 44.6 ma harvested, 79.9% harvested-to-planted acres, low yields of 39.0 bu/ac, 1.739 bb 2014 U.S. wheat production, 2.502 bb U.S. wheat supplies, 925 mb exports, 2.086 bb total use, 416 mb ending stocks, 19.9% S/U, & $8.75 /bu; and c) “High Production” Scenario: 15% prob. of 45.9 ma harvested, 82.3% harvested-to-planted acres, yields of 45.6 bu/ac, 2.095 bb 2014 U.S. wheat production, 2.818 bb U.S. wheat supplies, 1.050 bb exports, 2.261 bb total use, 557 mb ending stocks, 24.6% S/U, & $7.30 /bu.

http://www.themoscowtimes.com/upload/iblock/f69/5155-07-GRAIN_Omsk-Abramov42.jpg

Black Sea Wheat Production in 2013 (Source: http://www.themoscowtimes.com/)

USDA World Wheat: World wheat total supplies of 884 mmt in “new crop” MY 2014/15 are down from 889 mmt in “current year” MY 2013/14, but up from 855 mmt in MY 2012/13. Projected World wheat ending stocks in “new crop” MY 2014/15 of 187.4 mmt (26.9% S/U) are up from 186.5 mmt (26.5% S/U) in MY 2013/14, and from 175.3 mmt (25.8% S/U) in MY 2012/13. These levels of World stocks and/or supplies need to be measured against the recent historic World wheat stocks minimum of 129.4 mmt (21.0% S/U) in MY 2007/08 for context and market perspective. Year-over-year increases in wheat exports in “new crop” MY 2014/15 are projected for Argentina, Brazil, and Russia, with decreases forecast for the United States, Australia, Canada, the EU, India, Kazakhstan, and the Ukraine. Should threats to wheat production and supplies in the U.S. and World wheat markets subside, large supplies of wheat would likely be available to World wheat export buyers – which would present a challenge for U.S. wheat exports and prices later in 2014.  

http://blog.foreignpolicy.com/files/images/090811_wheat.jpg

Afghanistan Wheat Supplies (Source: https://www.blog.foreignpolicy.com)

Soybean Market Outlook for MY 2014/15 (KSU Forecasts)

Following the April 9th USDA WASDE report, the following grain market outlook analysis and forecasts for U.S. Soybeans have been developed.  A full MS Powerpoint presentation of corn, wheat and soybean market analysis following the April 9th USDA report was given at the Agricultural Exposition in Great Bend, Kansas on Thursday, April 10th.  The full presentation is available on the KSU AgManager.info website:  http://www.agmanager.info/default.asp, at the following web address:  http://www.agmanager.info/marketing/outlook/crop_outlook/OBrien_AgExpo_GreatBend_04-10-14.pdf

Following are key parts of the current KSU Soybean Market Outlook for the 2014/15 marketing year.

Slide61 Slide64 Slide66 Slide67 Slide68 Slide69 Slide70 Slide71 Slide72 Slide73 Slide74 Slide75 Slide76 Slide77 Slide78 Slide79 Slide80 Slide81 Slide82 Slide83

Wheat Market Outlook for MY 2014/15 (KSU Forecasts)

Following the April 9th USDA WASDE report (http://www.usda.gov/oce/commodity/wasde/), the following grain market outlook analysis and forecasts for U.S. Wheat have been developed.  A full MS Powerpoint presentation of corn, wheat and soybean market analysis following the April 9th USDA report was given at the Agricultural Exposition in Great Bend, Kansas on Thursday, April 10th.  The full presentation was given on the KSU AgManager.info website:  http://www.agmanager.info/default.asp, at the following web address:  http://www.agmanager.info/marketing/outlook/crop_outlook/OBrien_AgExpo_GreatBend_04-10-14.pdf

Following are key parts of the current KSU Wheat Market Outlook for the 2014/15 marketing year.

Slide31 Slide33 Slide34 Slide36 Slide38 Slide39 Slide40 Slide41 Slide42 Slide43 Slide44 Slide45 Slide46 Slide47 Slide48 Slide49 Slide50 Slide51 Slide52 Slide53 Slide54 Slide55 Slide56 Slide57 Slide58 Slide59