KSU Wheat Market Outlook in Early September 2015 (via KSU AgManager)

An analysis of U.S. and World wheat supply-demand factors and 2015-2016 price prospects following the USDA’s August 12th Crop Production and World Agricultural Supply Demand Estimates (WASDE) reports and the market actions that have followed those reports is available 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

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Summary

Overview

Since USDA’s World Agricultural Supply and Demand Estimates (WASDE) and Crop Production reports on August 12th, U.S. and World wheat market prices have traded sharply lower. For the “new crop” 2015/16 marketing year the USDA projected that 1) World wheat total supplies and total use would be at record high levels, 2) World wheat export trade would be down moderately from a year ago – with strong export sales competition occurring in what can be termed a “buyer’s market”, and c) World wheat ending stocks would be record high, with percent ending stocks-to-use at their highest level since MY 2009/10.

There are underlying concerns about key World wheat market factors, such as a) potential wheat production problems and supply prospects in Australia, India, Russia, and elsewhere in “new crop” MY 2015/16, b) the ongoing geopolitical problems in the Black Sea region and the potential for conflict in the Middle East, and c) uncertainty in World economic, financial and currency markets. However, the overriding “large crop-over-supply” situation that now exists in World & U.S. wheat markets continues to negatively influence wheat futures and cash prices. Recovery in wheat market prices may dependent on whether significant problems in wheat production and/or trade occur in major World wheat producing and exporting areas in year 2015 and beyond, and for the U.S. how long the strong value of the U.S. dollar relative to other currencies continues.

USDA U.S. Wheat Supply-Demand & Price Forecast

For U.S. wheat in the “new crop” 2015/16 marketing year, the USDA projected that there would be 55.079 million acres (ma) planted, 48.454 ma harvested, 44.1 bu/ac yields (down 0.2 bu), 2.136 billion bushels (bb) production (down 12 mb), 3.014 bb total supplies (down 17 mb), 925 million bushel (mb) exports (down 25 mb), 200 mb feed & residual use, 2.164 bb total use (down 25 mb), 850 mb end stocks (up 8 mb), with 39.3% ending-stocks-to-use (up from 38.5% in July, and up to the highest level since 48.6% in MY 2009/08). The USDA projected U.S. average wheat prices for “new crop” MY 2015/16 in the range of $4.65-$5.55 /bu. (midpoint =$5.10) – the lowest since $4.87 /bu in MY 2009/10.

Kansas State University U.S. Wheat Supply-Demand & Price Forecast

Key market factors to consider are the level of 2015 U.S. hard red spring wheat production, and prospects for improved U.S. wheat exports. Kansas State University projections of “new crop” MY 2015/16 supply-demand balances and prices are represented in two scenarios:

A) “Lower Exports” Scenario: 65% prob. of the same U.S. wheat production estimates as the USDA, but with U.S. exports dropping to “old crop” 2014/15 levels, i.e., 3.014 bb total supplies, 850 mb exports, 2.089 bb total use, 925 mb ending stocks, 44.3% S/U, and $4.75 /bu U.S. avg. price.

B) “Higher Exports” Scenario: 35% prob. of production prospects equal to the USDA’s but with higher U.S. wheat exports, i.e., 3.014 bb total supplies, 1.000 bb exports, 2.224 bb total use, 790 mb ending stocks, 35.2% S/U, and $5.75 /bu U.S. average price.

USDA World Wheat Supply-Demand & Market Impact

The expectation of large World wheat supplies and stocks are a “burden” on World wheat markets – driving them toward lower World wheat market prices. Record World total wheat supplies of 936.2 mmt in “new crop” MY 2015/16 are up from 918.6 mmt in “old crop” MY 2014/15, and from 892.1 mmt in MY 2013/14.

Projected World wheat ending stocks in “new crop” MY 2015/16 of 221.5 mmt (31.0% S/U) are also record high, and up from 209.7 mmt (29.6% S/U) in “old crop” MY 2014/15, and from 193.4 mmt (27.7% S/U) in MY 2013/14. For perspective, these recent supply-demand figures can be compared to the historic World wheat ending stocks and stocks-to-use minimums of 128.8 mmt and 21.0% S/U in MY 2007/08.

https://i0.wp.com/kansasagnetwork.com/wp-content/uploads/2013/09/Wheat-Planting-in-Kansas.jpg

Looking toward Winter Wheat Seeding in Kansas in Fall 2015 (Source: http://kansasagnetwork.com/2013/planting-conditions-for-the-2014-kansas-wheat-crop-surprising-in-some-areas/)

 

KSU Corn Market Outlook in Early September 2015: Moderately Lower 2015 U.S. Corn Crop Scenarios to Examine

An analysis of U.S. and World corn supply-demand factors and 2015/16 price prospects following the USDA’s August 12th 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 Early September 2015″ 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_09-01-15_Corn.pdf

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Summary

Overview

When the USDA released its World Agricultural Supply and Demand Estimates (WASDE) report on August 12th, DEC 2015 corn futures prices dropped sharply, but have since traded in the $3.65-$3.85 /bu range. With prospects for a 13.2-13.8 billion bushel 2015 U.S. corn crop, and sizable 2015 foreign coarse grain crops, the likelihood of corn futures prices rising to $4.50-$5.00 or above in coming months is limited unless yield and/or maturity problems develop in late summer-early fall with the 2015 U.S. corn crop. Corn prices in the U.S. are likely to remain low relative to recent years – limiting U.S. corn enterprise profits in 2015. It is likely that current low prices will impact 2016 crop corn planting decisions of both South American and the U.S. farmers. Also, IF major geopolitical conflicts in key World ag production and usage areas and/or major financial market problems occur in late 2015-2016, grain markets could be volatile, with price direction uncertain to predict.

The development of volatile weather patterns in 2015 such as “El Nino” may cause production problems for corn and other coarse grains in parts of the U.S., South America, Australia, India, and elsewhere in the next 6-18 months. Low feedgrain prices – resulting in lower input costs for U.S. and Foreign livestock feeding and bioenergy users – have helped to increase profitability for corn-using industries, and led to increased feedgrain usage. A combination of these production and demand impacts over time are likely to eventually cause a change in the prevailing “large crop – low price” market scenario in U.S. and World coarse grain markets.

USDA U.S. Corn Market Forecast

The USDA projected lower U.S. corn production, higher usage, moderately tighter ending stocks and stocks-to-use, and marginally lower U.S. corn prices for “new crop” MY 2015/16 than for “old crop” MY 2014/15. Projected 2015 U.S. corn production of 13.686 billion bushels (bb) is up 156 million bushels (mb) from July, but still down from 14.216 bb in 2014, with total supplies of 15.488 bb in “new crop” MY 2015/16 being up from 15.477 bb in “old crop” MY 2014/15. Record forecast MY 2015/16 total corn usage of 13.775 bb (up from 13.705 bb in MY 2014/15), includes ethanol use of 5.250 bb (up 50 mb vs MY 2014/15), non-ethanol FSI use of 1.375 bb (up 20 mb vs last year), exports of 1.850 bb, and feed and residual use of 5.300 bb.

Ending stocks are forecast at 1.713 bb (12.4% S/U) in “new crop” MY 2015/16 – down from 1.772 bb (12.9% S/U) in “old crop” MY 2014/15, but still up from 1.232 bb (9.2% S/U) in MY 2013/14, and 821 mb (7.4% S/U) in MY 2012/13. “New crop” MY 2015/16 U.S. avg. cash prices are forecast in the range of $3.35-$3.95 /bu. (midpoint of $3.65) versus to $3.65-$3.75 /bu ($3.70 midpoint) in MY 2014/15, and $4.46 in MY 2013/14.

KSU U.S. Corn Market Forecasts

Projected supply-demand and price scenarios by Kansas State University (KSU) for “new crop” MY 2015/16 are as follows:

a) “2015 Normal Crop 13.568 bb Production” Scenario (40% prob.): 88.897 ma planted, 81.000 ma harvested, yield of 167.5 bu/ac, 2015 U.S. corn production of 13.568 bb, total supplies of 15.370 bb, total use of 13.775 bb, ending stocks of 1.595 bb, 11.6% S/U, & $4.25 /bu U.S. corn MYA prices;

b) “2015 Smaller Normal Crop 13.365 bb Production” Scenario (50% prob.): 88.897 ma planted, 81.000 ma harvested, yield of 165.0 bu/ac, 2015 U.S. corn production of 13.365 bb, total supplies of 15.167 bb, total use of 13.700 bb, ending stocks of 1.467 bb, 10.7% S/U, & $4.35 /bu U.S. corn MYA prices;

and c) “2015 Short Crop 12.555 bb Production” Scenario (10% prob.): Planted / harvested acres same as scenarios (a) & (b), but with a KSU low yield of 155.0 bu/ac, U.S. corn production of 12.555 bb, total supplies of 14.317 bb, total use of 13.415 bb, ending stocks of 902 mb, 6.72% S/U, & $6.90 /bu U.S. corn MYA prices.

World Corn Supply-Demand

World total supplies of 1,183 million metric tons (mmt) are projected for “new crop” MY 2015/16, up from 1,181 mmt in “old crop” MY 2014/15, and 1,128 mmt in MY 2013/14. Projected World corn ending stocks of 195.1 mmt (19.8% S/U) in “new crop” MY 2015/16 are down marginally from 197.4 mmt (20.1% S/U) in “old crop” MY 2014/15, but up from 175.0 mmt (18.4% S/U) in MY 2013/14.

https://i2.wp.com/southwestfarmpress.com/site-files/southwestfarmpress.com/files/imagecache/large_img/uploads/2015/01/combine-and-cart.jpg

An Image of Past U.S. Corn Harvests (Source: http://southwestfarmpress.com/grains/feed-grain-outlook-influenced-record-corn-yield)

https://i2.wp.com/oklahomafarmreport.com/wire/news/2015/01/media/00062_CornPile09122013.jpg

A large 2015 U.S. Corn Crop Appears to be Coming (Source: http://oklahomafarmreport.com/wire/news/2015/01/00061_USDAContinuesToPredictBigCrops011215_181835.php#.VeUmJ5daTGE)

KSU Corn Market Outlook in July 2015: Adjusted USDA and KSU Forecasts for MY 2015/16

An analysis of U.S. and World corn supply-demand factors and 2015/16 price prospects following the USDA’s July 10th USDA Crop Production and World Agricultural Supply Demand Estimates (WASDE) reports will be available on the KSU AgManager website on Tuesday, July 21st  (http://www.agmanager.info/default.asp).

Following is a summary of the article on “Corn Market Outlook in July 2015″ with the full article and accompanying analysis soon to be available on the KSU AgManager website at the following web address: http://www.agmanager.info/marketing/outlook/newletters/Corn.asp

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Summary

Overview & Commentary

Since the USDA released its World Agricultural Supply and Demand Estimates (WASDE) report on July 10th, corn futures prices first rose and then have declined. With 1) a record high 2014 U.S. corn crop of 14.216 billion bushels (bb), 2) prospects for another large 2015 U.S. corn crop in the 13.2-13.8 bb range, and c) sizable 2015 foreign corn and other coarse grain crops, the likelihood of corn futures prices having a strong rally to the $4.75-$5.00 or above is limited. This situation could change if crop production or export availability problems occur in major World production and exporting regions (i.e., U.S., South America, the Black Sea Region) in coming months. IF major geopolitical conflicts and/or financial market problems occur in 2015-2016, grain markets could be extremely volatile, but the direction of potential grain price changes is difficult to predict.

The development of volatile weather patterns in 2015 such as “El Nino” may cause production problems for corn and other coarse grains in parts of the U.S., South America, Australia, India, and elsewhere in the next 6-12 months. Low feedgrain prices – resulting in lower input costs for U.S. and Foreign livestock feeding and bioenergy users – have helped to increase profitability of corn-using industries and led to increased feedgrain usage. A combination of these production and demand impacts in the future are likely to eventually bring about a change in the current World-wide “large crop – low price” market scenario faced in coarse grain and other agricultural markets.

USDA U.S. Corn Market Forecast

The USDA projected lower production, higher usage, moderately tighter ending stocks and stocks-to-use, and marginally higher U.S. prices for “new crop” MY 2015/16 than for the “current” 2014/15 marketing year. Projected 2015 U.S. corn production of 13.530 bb is down from 14.216 bb a year earlier, with total supplies of 15.334 bb in “new crop” MY 2015/16 down from 15.474 bb in “current” MY 2014/15. Projected MY 2015/16 total corn usage of 13.735 bb is a record (up from 13.696 bb in MY 2014/15), with ethanol use of 5.225 bb (up 25 mb vs a year earlier), non-ethanol FSI use of 1.360 bb (up 14 mb), exports of 1.875 bb (up 25 mb), and feed and residual use of 5.275 bb (down 25 mb).

Ending stocks are forecast at 1.599 bb (11.6% S/U) in “new crop” MY 2015/16 – down from 1.779 bb (13.0% S/U) in “current” MY 2014/15, but still up from 1.232 bb (9.2% S/U) in MY 2013/14, and 821 mb (7.4% S/U) in MY 2012/13. “New crop” MY 2015/16 U.S. average cash prices are forecast to be in the range of $3.45-$4.05 per bu. (midpoint of $3.75) versus to $3.60-$3.80 /bu ($3.70 midpoint) in “current” MY 2014/15, and $4.46 in MY 2013/14.

KSU U.S. Corn Market Forecasts

Projected supply-demand and price scenarios by KSU for “new crop” MY 2015/16 are as follows:

a) “2015 ‘Normal Crop’ 13.382 bb Production” Scenario (30% prob.): 88.897 ma planted, 81.101 ma harvested, yield of 165.0 bu/ac, 2015 U.S. corn production of 13.382 bb, total supplies of 15.186 bb, total use of 13.710 bb, ending stocks of 1.476 bb, 10.77% S/U, & $4.25 /bu U.S. corn MYA prices;

b) “2015 ‘Smaller Normal Crop’ 13.163 bb Production” Scenario (55% prob.): 88.897 ma planted, 81.101 ma harvested, KSU long term trend yield of 162.25 bu/ac, 2015 U.S. corn production of 13.163 bb, total supplies of 14.967 bb, total use of 13.625 bb, ending stocks of 1.342 bb, 9.84% S/U, & $4.35 /bu U.S. corn MYA prices; and

c) “2015 ‘Short Crop’ 12.571 bb Production” Scenario (15% prob.): Planted / harvested acres same as scenarios (a) & (b), but with a KSU low yield of 155.0 bu/ac, U.S. corn production of 12.571 bb, total supplies of 14.375 bb, total use of 13.405 bb, ending stocks of 970 mb, 7.24% S/U, & $6.90 /bu U.S. corn MYA prices.

World Corn Supply-Demand

World total supplies of 1,181 mmt are projected for “new crop” MY 2015/16, up from 1,176 mmt in “current” MY 2014/15, and 1,128 mmt in MY 2013/14. Projected World corn ending stocks of 190.0 mmt (19.2% S/U) in “new crop” MY 2015/16 are down marginally from 194.0 mmt (19.7% S/U) in “current” MY 2014/15, but up from 174.7 mmt (18.3% S/U) in MY 2013/14.

https://i0.wp.com/kansasagnetwork.com/wp-content/uploads/2013/08/Corn-Field.jpg

Kansas Corn Fields in 2013 (Source: http://kansasagnetwork.com/2013/kansas-farmers-able-to-catch-up-on-haying-herbicide-spraying-activities-and-wheat-planting-preperation/)

KSU Soybean Market Outlook in June 2015 – Acreage and Production Questions to be Answered

An analysis of U.S. and World soybean supply-demand factors and 2015-2016 price prospects following the USDA’s June 10th 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 Soybean Market Outlook – with the full article and accompanying analysis available on the KSU AgManager website at the following web address:

http://www.agmanager.info/marketing/outlook/newletters/archives/GRAIN-OUTLOOK_06-22-15_Soybeans.pdf

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Summary

Overview

Since the USDA released its World Agricultural Supply and Demand Estimates (WASDE) report on June 10th, soybean futures prices moved first moderately lower and then sharply higher. Near term U.S. soybean market price prospects are limited by a) record 2014 South American and U.S. soybean crops leading to 33% growth in “current” MY 2014/15 World soybean stocks, b) prospects for record 2015 South American and near record U.S. soybean production – resulting in 11% more growth in ending stocks again “new crop” MY 2015/16, and c) the high value of the U.S. dollar – putting U.S. soybeans at a disadvantage to exportable supplies from South America (with their “weaker” currencies).

Soybean price prospects seem limited through July-August 2015 – when questions about potential U.S. production problems may be answered. That said, IF major World geopolitical conflicts and/or financial market problems occur, grain markets could be extremely volatile, but the direction of such potential grain price changes is difficult to predict.

Longer term, since MY 2008/09 the strong upward trend in World soybean production (up 7.1% annually) has “out-paced” the increase in World soybean use (up 5.4% per year), leading to record World soybean ending stocks and percent stocks-to-use, and to a dramatic reduction in price prospects in the coming year. Absent major unforeseen crop production problems in the U.S. and South America in “new crop” MY 2015/16, low prices and poor profitability are likely to cause a scaling back of World production in MY 2016/17 and beyond.

USDA U.S. Soybean Projection for “New Crop” MY 2015/16

The USDA forecast 2015 U.S. soybean production of 3.850 billion bushels (bb) – down 119 million bushels (mb) from the record high of 3.969 bb in 2014. For “new crop” 2015/16, USDA projected U.S. total supplies at a record 4.210 bb (vs 4.091 bb in 2014/15), crush at 1.830 bb (up 5 mb), exports at 1.775 bb (down from the record 1.810 bb in 2014/15), total use at 3.734 bb (vs record of 3.761 bb in 2014/15), and ending stocks at a 9 year high of 475 mb (down 25 mb and up from 330 mb in 2014/15). Ending stocks-to-use are projected at 12.72% – up from 8.77% in 2014/15, and the record low of 2.65% in 2013/14. The USDA forecast “new crop” 2015/16 prices to be in the range $8.25-$9.75 (midpoint = $9.00 /bu) – down from $10.05 in 2014/15, $13.00 in 2013/14, and the record high of $14.40 in 2012/13.

Kansas State University U.S. Soybean Forecasts for “New Crop” MY 2015/16

A) KSU “Normal Crop” Scenario: 30% prob. of 84.635 ma planted, 83.696 ma harvested, trend yield of 45.1 bu/ac, 3.775 bb 2015 production, 4.135 bb U.S. soybean total supplies, 3.682 bb total use, 453 mb end stocks, 12.30% ending S/U (vs 8.77% in “current” MY 2014/15), & $9.15 /bu (vs $10.05 in “current” MY 2014/15).

B) KSU “Normal-Large Crop” Scenario: 50% prob. of 86.701 ma planted, 85.739 ma harvested, trend yield of 45.1 bu/ac, 3.867 bb 2015 production, 4.227 bb U.S. soybean total supplies, 3.742 bb total use, 485 mb end stocks, 12.96% ending S/U (vs 8.77% in “current” MY 2014/15), & $8.90 /bu (vs $10.05 in “current” 2014/15).

C) KSU “Short Crop” Scenario: 20% prob. of 86.701 ma planted, 85.739 ma harvested, low yield of 40.0 bu/ac, 3.430 bb 2015 production, 3.800 bb U.S. soybean total supplies, 3.543 bb total use, 257 mb end stocks, 7.25% ending S/U (vs 8.77% in “current” MY 2014/15), & $10.75 /bu (vs $10.05 in “current” MY 2014/15).

World Soybean Supply-Demand

Record high World soybean production of 317.6 mmt in “new crop” MY 2015/16 is down from 318.25 mmt in “current” 2014/15, and up from 283.25 mmt in 2013/14. “New crop” MY 2015/16 soybean production in Brazil (97.0 mmt – up 2.5 mmt from a year earlier), Argentina (57.0 mmt – down 2.5 mmt), and Paraguay (8.8 mmt – up 0.3 mmt), total 162.8 mmt (up from 162.5 mmt last year). Record high projected World soybean ending stocks of 93.2 mmt (30.5% S/U) in “new crop” MY 2015/16 are up from 83.7 mmt (28.5% S/U) in “current” 2014/15, and up from 62.8 mmt (22.8 % S/U) in 2013/14.

https://i0.wp.com/kansasagnetwork.com/wp-content/uploads/2013/11/Soybean-Field.jpg

Kansas Soybean Fields (Source: http://kansasagnetwork.com/2013/trans-fat-ban-could-cut-u-s-soybean-acres/)

 

KSU Corn Market Outlook – Updated Corn Market Scenarios for “New Crop” MY 2015/16

An analysis of U.S. and World corn supply-demand factors and 2015/16 price prospects in mid-late May 2015, following the USDA’s June 10th USDA Crop Production and World Agricultural Supply Demand Estimates (WASDE) report, 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 2015″ 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_06-15-15_Corn.pdf

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Summary

Overall Situation

Since the USDA released its World Agricultural Supply and Demand Estimates (WASDE) report on June 10th, corn futures prices have declined. With 1) a record high 2014 U.S. corn crop of 14.216 billion bushels (bb), 2) prospects for another large U.S. crop in the 13.2-13.8 bb range in 2015, and c) large 2015 foreign corn and other coarse grain crops, the likelihood of corn futures prices having a strong rally to $5.00 or above in coming months is limited.

This situation could change if substantial crop production or export availability problems occur in either the U.S. or in other major coarse grain production and exporting regions of the World in coming months. As a caveat, IF major geopolitical conflicts and/or financial market problems occur, grain markets could be extremely volatile, but the direction of such potential grain price changes is difficult to predict.

USDA U.S. Corn Market Forecast

The USDA made it second official WASDE forecast of U.S. corn supply-demand and prices for the “new crop” 2015/16 marketing year in the June 10th report. The USDA maintained its projection of lower production and marginally lower ending stocks, stocks-to-use, and U.S. prices for “new crop” MY 2015/16 than for the “current” 2014/15 marketing year. Projected 2015 U.S. corn production of 13.630 bb is down from 14.216 bb a year earlier, but total supplies of 15.531 bb in “new crop” MY 2015/16 are up from 15.472 bb in “current” MY 2014/15.

Projected MY 2015/16 total corn usage of 13.760 bb is a record (up from 13.597 bb in MY 2014/15), with ethanol use of 5.200 bb (vs 5.175 bb a year earlier), non-ethanol FSI use of 1.360 bb, exports of 1.900 bb (up 75 mb vs last year), and feed and residual use of 5.300 bb (up 50 mb vs last year). Ending stocks are forecast at 1.771 bb (12.87% S/U) in MY 2015/16 – down from 1.876 bb (13.80% S/U) in “current” MY 2014/15, but still up from 1.232 bb (9.2% S/U) in MY 2013/14, and 821 mb (7.4% S/U) in MY 2012/13.

“New crop” MY 2015/16 U.S. average cash prices are forecast to be in the range of $3.20-$3.80 per bu. (midpoint of $3.50) versus to $3.65 /bu in “current” MY 2014/15, and $4.46 in MY 2013/14.

KSU U.S. Corn Market Forecasts

Projected supply-demand and price scenarios by KSU for “new crop” MY 2015/16 are as follows:

Scenario A) “2015 ‘Normal Crop’ 13.262 bb Production” Scenario (40% prob.): 89.199 ma planted, 81.715 ma harvested, KSU long term trend yield of 162.25 bu/ac, 2015 U.S. corn production of 13.262 bb, total supplies of 15.163 bb, total use of 13.730 bb, ending stocks of 1.433 bb, 10.44% S/U, & $4.25 /bu U.S. corn MYA prices;

Scenario B) “2015 ‘Smaller Normal Crop’ 13.190 bb Production” Scenario (45% prob.): 88.750 ma planted, 81.295 ma harvested, KSU long term trend yield of 162.25 bu/ac, 2015 U.S. corn production of 13.190 bb, total supplies of 15.031 bb, total use of 13.730 bb, ending stocks of 1.361 bb, 9.91% S/U, & $4.35 /bu U.S. corn MYA prices;

Scenario C) “2015 ‘Short Crop’ 12.666 bb Production” Scenario (15% prob.): Planted and harvested acres unchanged from scenario (a) above, but with a KSU low yield forecast of 155.0 bu/ac, U.S. corn production of 12.666 bb, total supplies of 14.567 bb, total use of 13.450 bb, ending stocks of 949 mb, 7.06% S/U, & $6.90 /bu U.S. corn MYA prices.

World Corn Supply-Demand

World total supplies of 1,186 mmt are projected for “new crop” MY 2015/16, up from 1,174 mmt in “current” MY 2014/15, and 1,127 mmt in MY 2013/14. Projected World corn ending stocks of 195.2 mmt (19.7% S/U) in “new crop” MY 2015/16 are down marginally from 197.0 mmt (20.2% S/U) in “current” MY 2014/15, but up from 174.5 mmt (18.3% S/U) in MY 2013/14.

With closing CME NOV-2015 soybean futures of $9.04 ¼ and CME DEC-2015 corn futures of $3.69 ½ on 6/12/2015, the soybean/corn price ratio of 2.45 still favors the planting of soybeans in the U.S. in 2015.

The development of volatile weather patterns in 2015 such as “El Nino” may cause production problems for corn and other coarse grains in parts of the U.S., South America, Australia, India, and elsewhere in the next 6-12 months, and eventually bring about a change in the current World-wide “large crop – low price” market scenario faced in coarse grain and other agricultural markets. World grain markets are also vulnerable to financial market volatility in 2015/2016.

https://i1.wp.com/lubbockonline.com/sites/default/files/imagecache/superphoto/12320331.jpg

Wet Corn fields in Iowa in early June, 2013 (Source: http://lubbockonline.com/agriculture/2013-06-09/delayed-planting-forces-tough-decisions)

https://i2.wp.com/www.agweb.com/assets/1/6/p52-Sidedress-Solutions-2.jpg

Sidedress fertilizer time in the U.S. Corn Belt (http://www.agweb.com/article/sidedress_solutions/)

KSU Soybean Market Outlook in Late May 2015 – 3 Possible Market Outcomes in MY 2015/16

An analysis of U.S. and World soybean supply-demand factors and 2015-2016 price prospects following the USDA’s May 12th 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 Soybean Market Outlook in Late May – with the full article and accompanying analysis available on the KSU AgManager website at the following web address

http://www.agmanager.info/marketing/outlook/newletters/Soybeans.asp

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Summary

Overview

Since the USDA released its World Agricultural Supply and Demand Estimates (WASDE) report on May 12th, soybean futures prices have moved lower. Near term U.S. soybean market price prospects are limited by a) record high 2014 South American and U.S. soybean crops and burgeoning World soybean stocks, b) prospects for record or near-record South American and U.S. soybean production and ending stocks again 2015, and c) the rising value of the U.S. dollar – putting U.S. soybeans at a disadvantage to those available from South America (with their “weaker” currencies). Soybean price prospects seem limited until June-July 2015 – the when questions about late planting problems in the U.S. in 2015 are answered. After that, 2015 U.S. soybean production prospects are likely to influence soybean markets through fall harvest.

Longer term, the strong upward trend in World soybean production since MY 2008/09 has “out-paced” the increase in World soybean use over the same period, leading to record World soybean ending stocks and stocks-to-use, and to a dramatic reduction in price prospects in the coming year. Absent major unforeseen crop production problems in the U.S. and South America in “new crop” MY 2015/16, low prices and poor profitability are likely to cause a scaling back of production by World farmers in MY 2016/17 and beyond.

USDA U.S. Soybean Projection for “New Crop” MY 2015/16

The USDA forecast 2015 U.S. soybean production of 3.850 billion bushels (bb) – down 119 million bushels (mb) from the record high of 3.969 bb in 2013. For “new crop” MY 2015/16, USDA projected U.S. total supplies at a record 4.230 bb (vs 4.091 bb in “current” MY 2014/15), crush at 1.825 bb (up 20 mb), exports at 1.775 bb (down from the record 1.800 bb), total use at 3.729 bb (vs record of 3.741 bb), and ending stocks at a 9 year high of 500 mb (vs 350 mb). Ending stocks-to-use are projected at 13.41% – up 9.36% in “current” MY 2014/15, and the record low of 2.65% in MY 2013/14. The USDA forecast “new crop” MY 2015/16 prices to be in the range $8.25-$9.75 (midpoint = $9.00 /bu) – down from $10.05 in MY 2014/15, $13.00 in MY 2013/14, and the record high of $14.40 in MY 2012/13.

KSU U.S. Soybean Forecasts for “New Crop” MY 2015/16

A) KSU “Normal Crop” Scenario: 30% prob. of 84.635 ma planted, 83.696 ma harvested, trend yield of 45.1 bu/ac, 3.775 bb 2015 production, 4.155 bb U.S. soybean total supplies, 3.682 bb total use, 473 mb end stocks, 12.85% ending S/U (vs 9.36% in MY 2014/15), & $9.25 /bu (vs $10.05 in MY 2014/15).

B) KSU “Normal-Large Crop” Scenario: 50% prob. of 86.701 ma planted, 85.739 ma harvested, trend yield of 45.1 bu/ac, 3.867 bb 2015 production, 4.247 bb U.S. soybean total supplies, 3.742 bb total use, 505 mb end stocks, 13.50% ending S/U (vs 9.36% in MY 2014/15), & $8.90 /bu (vs $10.05 in MY 2014/15).

C) KSU “Short Crop” Scenario: 20% prob. of 86.701 ma planted, 85.739 ma harvested, low yield of 40.0 bu/ac, 3.430 bb 2015 production, 3.820 bb U.S. soybean total supplies, 3.543 bb total use, 277 mb end stocks, 7.82% ending S/U (vs 9.36% in MY 2014/15), & $10.65 /bu (vs $10.05 in MY 2014/15).

World Soybean Supply-Demand

Record high projected World soybean production of 317.3 mmt in “new crop” MY 2015/16 is forecast equal to 317.25 mmt in “current” MY 2014/15, and up from 283.25 mmt in MY 2013/14. Forecast South American “new crop” MY 2015/16 soybean production is as follows: Brazil (97.0 mmt – up 2.5 mmt from a year earlier), Argentina (57.0 mmt – down 1.5 mmt), and Paraguay (8.8 mmt – up 0.3 mmt), totaling 162.8 mmt (up from 161.5 mmt last year).

World soybean exports of 122.0 mmt in “new crop” MY 2015/16 are up from 117.5 mmt in “current” MY 2014/15, and up from 112.9 mmt in MY 2013/14. Record high projected World soybean ending stocks of 96.2 mmt (31.6% S/U) in “new crop” MY 2015/16 are up from 85.5 mmt (29.3% S/U) in “current” MY 2014/15, and up from 63.4 mmt (23.1 % S/U) in MY 2014/15.

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Planting Soybeans in Iowa in Early-Mid May 2015 (Source: http://www.iasoybeans.com/TheBeanBlog/?tag=planting)

 

KSU Corn Market Outlook – Corn Market Scenarios for “New Crop” MY 2015/16

An analysis of U.S. and World corn supply-demand factors and 2015/16 price prospects in mid-late May 2015, following the USDA’s May 12th USDA Crop Production and World Agricultural Supply Demand Estimates (WASDE) report, 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 May 2015″ 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_05-18-15_Corn.pdf

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Summary

Overview

Since the USDA released its World Agricultural Supply and Demand Estimates (WASDE) report on May 12th, corn futures prices have moved sideways-to-higher. This is a temporary change from the downtrend in corn futures prices since January that had resulted in lows during late April-early May. With 1) a record high 2014 U.S. corn crop of 14.216 billion bushels (bb), and 2) prospects for another large U.S. crop in the 13.2-13.7 bb range in 2015, the likelihood of corn futures prices having a strong rally to $5.00 or above in coming months appear limited – unless unexpected, substantial crop production or export availability problems occur in either the U.S. or in other major coarse grain production and exporting regions of the World in coming months. As a caveat, IF major geopolitical conflicts and/or financial market problems occurred, it would could cause grain markets to be extremely volatile, but the direction of such potential price changes is difficult to predict.

USDA U.S. Corn Market Forecast

The USDA made it first official WASDE forecast of U.S. corn supply-demand and prices for the “new crop” 2015/16 marketing year in the May 12th report. The USDA projected lower production and marginally lower ending stocks, stocks-to-use, and U.S. prices for “new crop” MY 2015/16 than for the “current” 2014/15 marketing year. Projected 2015 U.S. corn production of 13.630 bb and total supplies of 15.506 bb (billion bushels) in “new crop” MY 2015/16 are both down from record high levels of 14.216 bb production and 15.472 bb total supplies in “current” MY 2014/15. Projected MY 2015/16 total corn usage of 13.760 bb is a record (up from 13.622 bb in MY 2014/15), with ethanol use of 5.200 bb (same as a year ago), non-ethanol FSI use of 1.360 bb, exports of 1.900 bb (up 100 mb vs last year), and feed and residual use of 5.300 bb (up 50 mb vs last year). Ending stocks are forecast at 1.746 bb (12.69% S/U) – down from 1.851 bb (13.59% S/U) in “current” MY 2014/15, but still up from 1.232 bb (9.2% S/U) in MY 2013/14, and 821 mb (7.4% S/U) in MY 2012/133. “New crop” MY 2015/16 U.S. average cash prices are forecast the range of $3.20-$3.80 per bu. (midpoint of $3.50) – which compares to $3.65 /bu in “current” MY 2014/15, and $4.46 in MY 2013/14.

KSU U.S. Corn Market Forecasts

Projected supply-demand and price scenarios by KSU for “new crop” MY 2015/16 are as follows:

a) “2015 “Normal Crop” 13.262 bb Production” Scenario (55% prob.): 89.199 ma planted, 81.715 ma harvested, KSU long term trend yield of 162.25 bu/ac, 2015 U.S. corn production of 13.262 bb, total supplies of 15.138 bb, total use of 13.730 bb, ending stocks of 1.408 bb, 10.25% S/U, & $4.25 /bu U.S. corn MYA prices;

b) “2015 “Smaller Normal Crop” 13.190 bb Production” Scenario (25% prob.): 88.750 ma planted, 81.295 ma harvested, KSU long term trend yield of 162.25 bu/ac, 2015 U.S. corn production of 13.190 bb, total supplies of 15.006 bb, total use of 13.730 bb, ending stocks of 1.336 bb, 9.73% S/U, & $4.35 /bu U.S. corn MYA prices;

c) “2015 “Short Crop” 12.666 bb Production” Scenario (20% prob.): Planted and harvested acres unchanged Scenario (a) above, but with a KSU low yield forecast of 155.0 bu/ac, U.S. corn production of 12.666 bb, total supplies of 14.542 bb, total use of 13.450 bb, ending stocks of 924 mb, 6.87% S/U, & $6.75 /bu U.S. corn MYA prices.

World Corn Supply-Demand

World total supplies of 1,182 mmt are projected for “new crop” MY 2015/16, up from 1,170 mmt in “current” MY 2014/15, and 1,007 mmt in MY 2013/14. Projected World corn ending stocks of 191.9 mmt (19.4% S/U) in “new crop” MY 2015/16 are down marginally from 195.5 mmt (19.7% S/U) in “current” MY 2014/15, but up from 173.8 mmt (18.2% S/U) in MY 2013/14. With closing CME NOV-2015 soybean futures of $9.34 ½ and CME DEC-2015 corn futures of $3.82 ¾ on 4/30/2015, the soybean/corn price ratio of 2.44 still favors the planting of soybeans in the U.S. in 2015.

A lack of profitability for both currently with the 2014 crop, and in 2015 at current fall 2015 harvest contract prices is likely to limit U.S. corn planted acres and corn production potential. Lower 2015 production eventually may provide at least moderate support for U.S. corn prices in “new crop” MY 2015/16 in the spring and early summer of next year.

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Corn Emergence in 2014 (Source: http://cornandsoybeandigest.com/2014-midwest-corn-amp-soybean-production-guide/uniform-emergence-must)