KSU Soybean Market Outlook in March 2015 – Questions of 2015 U.S. Soy Acreage and Production Lay Ahead

An analysis of U.S. and World soybean supply-demand factors and 2015-2016 price prospects following the USDA’s March 10th Crop Production and World Agricultural Supply Demand Estimates (WASDE) reports either 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/Soybeans.asp

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Summary

Overview

Since the USDA released its World Agricultural Supply and Demand Estimates (WASDE) reports on March 10th, MAY 2015 and NOV 2015 soybean futures prices have traded generally lower, but have followed a volatile price pattern. Near term U.S. soybean market price prospects are limited by a) record high 2014 South American and U.S. soybean crops, 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). Unless substantial crop production or soybean export availability problems occur very soon in South America, price prospects seem limited until at least May-June 2015 – the main U.S. soybean planting season. After that, 2015 U.S. soybean production prospects are likely to influence soybean markets through fall harvest. The March 31st USDA Prospective Plantings report is likely to have a major impact on U.S. soybean prices, providing direction as to whether the USDA expectation of no increase in 2015 U.S. soybean planted acres, or that of market analysts’ expecting a 1-4 million acre increase is correct.

USDA U.S. Soybean Projection for “current crop” MY 2014/15

The USDA maintained its forecast of record 2014 U.S. soybean production of 3.969 billion bushels (bb) – up 611 million bushels (mb) from 3.358 bb in 2013. For “current crop” MY 2014/15, USDA maintained its projections of U.S. total supplies at a record 4.086 billion bushels (bb), crush at 1.795 bb, exports at a record 1.790 bb, record total use at 3.701 bb, and ending stocks at an 8 year high of 385 million bushels (mb). Ending stocks-to-use are projected to be 10.4% – up from the record low of 2.65% in MY 2013/14. The USDA forecast “current crop” MY 2014/15 prices to be in the range $9.45-$10.95 with a midpoint of $10.20 /bu – down from $13.00 and $14.40 the last two years.

USDA & KSU U.S. Soybean Forecasts for “next crop” MY 2015/16

In the USDA Agricultural Outlook Forum the USDA projected the following for 2015 and “next crop” MY 2015/16: 83.5 ma planted, 82.6 ma harvested, 46.0 bu/ac yield, 3.800 bb production, 4.205 bb total supplies, 3.775 bb total use, 430 mb ending stocks, 11.39% S/U, and $9.00 /bu price.

Alternative KSU forecasts for “next crop” MY 2015/16 are as follows:

A) KSU “Same Acreage” Scenario: 40% prob. of 83.701 ma planted (same as 2014), 82.692 ma harvested, trend yield of 45.1 bu/ac, 3.729 bb 2015 production, 4.129 bb U.S. soybean total supplies, 3.730 bb total use, 399 mb end stocks (vs 385 mb in 2014/15), 10.70% ending S/U (vs 11.40%), & $10.10 /bu (vs $10.20 last year).

B) KSU “Up 2 Million Acres” Scenario: 60% prob. of 85.701 ma planted (up 2.0 ma) and 84.668 ma harvested (up 1.607 ma), trend yield of 45.1 bu/ac, 3.818 bb 2015 production, 4.218 bb U.S. soybean total supplies, 3.760 bb total use, 458 mb end stocks, 12.18% ending S/U, & $9.60 /bu.

World Soybean Supply-Demand

Record high projected World soybean production of 315.1 mmt in “current crop” MY 2014/15 is projected to be up from 283.7 mmt in MY 2013/14, and from 268.8 mmt in MY 2012/13. Forecast South American “current crop” MY 2014/15 soybean production is as follows: Brazil (94.5 mmt – up 7.8 mmt from a year earlier), Argentina (56.0 mmt – up 2.0 mmt), and Paraguay (8.5 mmt – up 0.3 mmt), totaling 159.0 mmt (up 10.1 mmt or 6.8% from 148.9 mmt last year). World soybean exports of 117.4 mmt in “current crop” MY 2014/15 are up from 113.0 mmt in MY 2013/14, and up from 100.5 mmt in MY 2012/13. Record high projected World soybean ending stocks of 89.5 mmt (31.0% S/U) in “current crop” MY 2014/15 are up from 66.35 mmt (24.3% S/U) in MY 2013/14, and up from 57.4 mmt (22.0 % S/U) in MY 2012/13.

https://i1.wp.com/farmprogress.com/cdfm/Faress1/author/198/2014/4/control_weeds_spring_burndown_1_635336394376912000.jpg

Contol of Weeds with Spring Burndown Herbicide Treatments (Source: http://farmprogress.com/story-control-weeds-spring-burndown-9-111481)

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Considering No-till Soybeans (Source: http://unitedsoybean.org/article/no-till-and-soybean-yields/)

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Cedar Bluff Reservoir, Near Wakeeney, Kansas (Source:http://www.kgs.ku.edu/Extension/KSplaces/visit17.html )

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

An analysis of U.S. and World corn supply-demand factors and 2014 price prospects following the USDA’s March 10th USDA Crop Production and World Agricultural Supply Demand Estimates (WASDE) reports will be available on the KSU AgManager website on Tuesday, March 17th  (http://www.agmanager.info/default.asp).

Following is a summary of the article on “Corn Market Outlook in March 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

Since the USDA released its World Agricultural Supply and Demand Estimates (WASDE) report on March 10th, corn futures prices have moved sideways-to-lower, at least temporarily diminishing farmer’s hopes that seasonal lows have occurred during January-March 2015. As of yet, U.S. corn producers have not observed enough market price strength to allow cash prices to move higher into the spring and provide eventual returns to storage for U.S. crop producers resisting sales at sub-$4.00 cash sales. With 1) a record high 2014 U.S. corn crop, and 2) prospects for record or near-record World corn production and ending stocks in the “current crop” 2014/15 marketing year, the likelihood of corn futures prices rallying above say $5.00 before spring planting appear limited – unless unexpected, substantial crop production or export availability problems occur in other major coarse grain production regions of the World.

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

The USDA made several significant changes in its forecast of U.S. corn usage and ending stocks in the current 2014/15 marketing year, but these adjustments resulted in only a small change in projected average corn prices. Projected record U.S. corn total supplies of 15.472 bb (billion bushels) are up 5.4% from 14.686 bb last year. Projected MY 2014/15 total corn usage of 13.695 bb (up 50 mb or million bushels from a month ago) is also a record, with ethanol use of 5.200 bb (down 50 mb – but up 66 mb from last year), non-ethanol FSI use of 1.395 bb (up 28 mb vs last year), exports of 1.800 bb (up 50 mb but down 117 mb from a year ago), and feed and residual use of 5.300 bb (up 50 mb, and up 264 mb vs last year). Ending stocks are forecast at 1.777 bb (12.98% S/U) – down 50 mb from February, and 100 mb from January, but up from 1.232 bb (9.2% S/U) in MY 2013/14, and 821 mb (7.4% S/U) in MY 2012/13. “Current crop” MY 2014/15 U.S. average cash prices are forecast the range of $3.50-$3.90 per bu. with a midpoint of $3.70 – up $0.05/bu, vs. $4.46 in MY 2013/14, and $6.89 in MY 2012/13.

USDA and KSU U.S. Corn Supply/Demand and Price Forecasts

USDA Forecast (adjusted): The USDA’s projected supply-demand, and price scenarios for “next crop” MY 2015/16 (with minor adjustments) are as follows: a) “2015 Less 1.6 Million Acre-13.6 bb Production” Scenario: 89.000 ma planted, 81.500 ma harvested, early season USDA baseline forecast yields of 166.8 bu/ac, 2015 U.S. corn production of 13.595 bb, total supplies of 15.397 bb, total use of 13.760 bb, ending stocks of 1.637 bb, 11.9% S/U, & $3.70 /bu U.S. corn MYA prices.

KSU Forecasts: Projected supply-demand and price scenarios by KSU for “next crop” MY 2015/16 are as follows: a) “2015 Less 2.5 Million Acre-13.5 bb Production” Scenario (45% prob.): 88.097 ma planted, 80.706 ma harvested, early season USDA forecast yields of 166.8 bu/ac, 2015 U.S. corn production of 13.462 bb, total supplies of 15.264 bb, total use of 13.660 bb, ending stocks of 1.604 bb, 11.74% S/U, & $3.95 /bu U.S. corn MYA prices; b) “2015 Less 2.5 Million Acre-13.1 bb Production” Scenario (55% prob.): Planted and harvested acres unchanged from the previous scenario, but with a KSU trend line yield forecast of 162.3 bu/ac, U.S. corn production of 13.095 bb, total supplies of 14.897 bb, total use of 13.510 bb, ending stocks of 1.387 bb, 10.27% S/U, & $4.25 /bu U.S. corn MYA prices.

World Corn Supply-Demand

World total supplies of 1,162 mmt are projected for “current crop” MY 2014/15, up from 1,125 mmt in MY 2013/14, and 1,000 mmt in MY 2012/13. Projected World corn ending stocks of 185.3 mmt (19.0% S/U) in “current crop” MY 2014/15 are up from 172.1 mmt (18.1% S/U) in MY 2013/14, and from 138 mmt (15.7% S/U) in MY 2012/13. With closing CME NOV-2015 soybean futures of $9.51 ¼ and CME DEC-2015 corn futures of $4.04 ¼ on 3/17/2015, the soybean/corn price ratio of 2.35 continues to be neutral for the two crops in the United States. That said, a lack of profitability for U.S. corn at expected 2015 harvest prices is likely to limit 2015 U.S. corn planted acres and 2015 corn production potential, and to provide at least a moderate amount of support for U.S. corn prices in “next crop” MY 2015/16 in the spring and early summer.

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KSU Soybean Market Outlook in February 2015 – Assessing 2015 South American and U.S. Soybean Prospects Going Forward

An analysis of U.S. and World soybean supply-demand factors and 2015-2016 price prospects following the USDA’s February 10th Crop Production and World Agricultural Supply Demand Estimates (WASDE) reports, and the February 19-20th USDA Agricultural Outlook Conference 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/Soybeans.asp

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Summary

Overview

Since the USDA released its World Agricultural Supply and Demand Estimates (WASDE) reports on February 10th, MAR 2015 and NOV 2015 soybean futures prices have traded generally higher, raising hopes that seasonal lows in January-mid February have occurred, and that cash prices may eventually move higher into the spring and provide returns to storage for U.S. crop producers resisting sales at sub-$10.00 cash prices.

With 1) record high 2014 South American and U.S. soybean crops, and 2) prospects for record or near-record South American and U.S. soybean production and ending stocks again in the “current crop” 2014/15 marketing year, prospects for a soybean futures price rally above say $11.00 appear limited – unless unexpected and substantial crop production or export availability problems occur in the U.S. or abroad. Absent these occurrences, price prospects seem limited until at least May-June 2015 – the main U.S. soybean planting season. After that, 2015 U.S. soybean production prospects are likely to seasonally influence soybean market prices through the remainder of this calendar year.

USDA U.S. Soybean Forecast for “current crop” MY 2014/15

The USDA maintained its forecast of record 2014 U.S. soybean production of 3.969 billion bushels (bb) – up 611 million bushels (mb) from 3.358 bb in 2013. For “current crop” MY 2014/15, USDA raised by 10 mb its projections of U.S. imports (25 mb) and total supplies (4.086 bb). Soybean crush was raised by 10 mb (1.795 bb) and exports by 20 mb (1.790 bb), with a 35 mb increase in total use (3.701 bb), leading to 35 mb decrease ending stocks (385 mb). Ending stocks-to-use are projected to be 10.4% – down from 11.2% last month, but up from the record low of 2.65% in MY 2013/14. The USDA forecast “current crop” MY 2014/15 prices to be in the range $9.45-$10.95 with a midpoint of $10.20 /bu – down from $13.00 a year ago in MY 2013/14, and from the record high of $14.40 in MY 2012/13.

USDA & KSU U.S. Soybean Forecasts for “next crop” MY 2015/16

In the USDA Agricultural Outlook Forum the USDA projected the following for 2015 and “next crop” MY 2015/16: 83.5 ma planted, 82.6 ma harvested, 46.0 bu/ac yield, 3.800 bb production, 4.205 bb total supplies, 3.775 bb total use, 430 mb ending stocks, 11.39% S/U, and $9.00 /bu price. At this time the key market factor to assess in regards to U.S. soybean production and supply-demand prospects for “next crop” MY 2015/16 is the amount of U.S. soybean acres to be planted in 2015. The USDA’s forecast of 2015 planted area is 1-3 million acres less than trade expectations.

Alternative KSU forecasts for “next crop” MY 2015/16 are as follows:

A) KSU “Same Acreage” Scenario: 40% prob. of 83.701 ma planted (same as 2014), 82.692 ma harvested, trend yield of 45.1 bu/ac, 3.729 bb 2015 production, 4.129 bb U.S. soybean total supplies, 3.730 bb total use, 399 mb end stocks (vs 385 mb in 2014/15), 10.70% ending S/U (vs 11.40%), & $10.10 /bu (vs $10.20 last year).

B) KSU “Up 2 Million Acres” Scenario: 60% prob. of 85.701 ma planted (up 2.0 ma) and 84.668 ma harvested (up 1.607 ma), trend yield of 45.1 bu/ac, 3.818 bb 2015 production, 4.218 bb U.S. soybean total supplies, 3.760 bb total use, 458 mb end stocks, 12.18% ending S/U, & $9.60 /bu.

World Soybean Supply-Demand

Record high projected World soybean production of 315.1 mmt in “current crop” MY 2014/15 is projected to be up from 283.7 mmt in MY 2013/14, and from 268.8 mmt in MY 2012/13. Record high projected World soybean ending stocks of 89.3 mmt (31.9% S/U) in “current crop” MY 2014/15 are up from 66.25 mmt (24.3% S/U) in MY 2013/14, and up from 57.3 mmt (21.9 % S/U) in MY 2012/13. Forecast South American “current crop” MY 2014/15 soybean production that will be harvested in early 2015 is as follows: Brazil (94.5 mmt – up 7.8 mmt from a year earlier), Argentina (56.0 mmt – up 2.0 mmt), and Paraguay (8.5 mmt – up 0.3 mmt), totaling 159.0 mmt (up 10.1 mmt or 6.8% from 148.9 mmt last year).

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Planting Soybeans in the Southeastern U.S. in 2014 (Source: http://southeastfarmpress.com/markets/usda-report-soybeans-look-set-acreage-record-peanuts)

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2015 Brazilian Soybean and Corn Acres & Production Affected by Earlier Weather / Planting Patterns (Source: http://en.mercopress.com/2015/02/18/brazil-s-corn-and-soybean-crops-flattening-out-influenced-by-climate-conditions)

Grain and Oilseed Outlook – USDA 2015 Ag Outlook Forum (Feb. 19-20, 2015)

Registration site: 2015 Agricultural Outlook Forum, Smart Agriculture in the Twenty-first Century, February 19-20, 2015, Crystal Gateway Marriott Hotel, Arlington, Virginia. Note: To register by phone, call 703-925-9455, x119 or toll free 1-844-430-7073

Source: USDA Office of the Chief Economist (http://www.usda.gov/oce/forum/index.htm)

The USDA  2015 Ag Outlook Forum – Smart Agriculture in the 21st Century – is/has been held in Arlington, VA on February 19-20, 2015. The website for the Forum is found here: http://www.usda.gov/oce/forum/

Background papers specific to the major U.S. agricultural commodities can be found at the following web location: http://www.usda.gov/oce/forum/commodity.html

The specific outlook paper by ag commodity group are available as follows:

A. USDA Grain and Oilseed Outlook paper:  http://www.usda.gov/oce/forum/2015_Speeches/Grains_Oilseeds.pdf

Grain and Oilseed Outlook presentation: http://www.usda.gov/oce/forum/2015_Speeches/BGeorge.pdf

B. USDA Livestock and Poultry Outlook paper:  http://www.usda.gov/oce/forum/2015_Speeches/Livestock_Poultry.pdf

C. USDA Sugar Outlook paper:  http://www.usda.gov/oce/forum/2015_Speeches/Sugar.pdf

D. USDA Cotton Outlook paper:  http://www.usda.gov/oce/forum/2015_Speeches/Cotton.pdf

E. Dairy Outlook paper:  http://www.usda.gov/oce/forum/2015_Speeches/Dairy.pdf

F. “Brazil’s Response to Low Commodity Prices – Will Infrastructure Improvements Support Further Expansion?” presentation: http://www.usda.gov/oce/forum/2015_Speeches/MCordonnier.pdf

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“Old Style” Agriculture in the U.S. (1921 picture) (Source: http://en.wikipedia.org/wiki/Agriculture_in_the_United_States)

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Modern Kansas Crop Production Practices – Planting Corn in 2014 (Source: https://kansasgrains.wordpress.com/category/agriculture/)

KSU Wheat Market Outlook in February 2015 – Examining “Next Crop” 2015/16 Market Scenarios

An analysis of U.S. and World Wheat supply-demand factors and price prospects based on information from the February 10, 2015 USDA Crop Production and World Agricultural Supply and Demand Estimates (WASDE) reports will shortly be 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 here: http://www.agmanager.info/marketing/outlook/newletters/Wheat.asp

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Summary

Overview

Since the USDA released its World Agricultural Supply and Demand Estimates (WASDE) report on February 10, 2014, U.S. wheat market prices traded in a volatile pattern – moving both higher and lower than the price range the day of the report. For the “current crop” 2014/15 marketing year the USDA projected that a) World wheat production, supplies, and total use would be at record high levels, b) World wheat export trade would be 3.4% lower than a year ago but still the second highest on record, and c) World wheat ending stocks and percent ending stocks-to-use would be at their highest levels in three marketing years, although still less than during the 2009/2010 through 2011/2012 period. For the U.S., the USDA also lowered its projection of U.S. wheat exports for MY 2014/15 to the lowest level in 5 years. Wheat prices in the U.S. are projected to be down to a four year low due to limited U.S. wheat exports and domestic livestock wheat feeding.
The USDA projects that foreign wheat supplies are more than adequate to “mitigate” shortfalls in 2014 U.S. hard red winter wheat production in the Central and Southern plains states again in MY 2014/15 as in MY 2013/14. Also, no other major production problems in competing World wheat exporting countries have yet emerged to the degree that the “large crop-over-supply” situation in World wheat markets has been changed. However, there are developing concerns about wheat export supply availability from the Black Sea region, and the ongoing possibility of crop problems developing among major World wheat producers / exporters. United States’ wheat exports have been reduced by a recent strong positive trend in the U.S. dollar.

USDA U.S. Wheat Forecast for “current crop” MY 2014/15

The USDA maintained its projection of lower 2014 U.S. wheat production, reduced total use, increased ending stocks and % stocks-to-use, and lower prices in “current crop” MY 2014/15 vs a year ago. The USDA’s projected “current crop” MY 2014/15 scenario is for a 2.026 billion bushel (bb) 2014 U.S. wheat crop, 2.776 bb total supplies (down 20 million bushels or ‘mb’ from January on reduced imports), 900 mb exports (down 25 mb), 2.084 bb total use (down 25 mb), 692 mb ending stocks (up 5 mb), 33.2% ending stocks-to-use (vs 32.6% last month), and a forecast U.S. price of $6.00 /bu (range of $5.85 to $6.15) – compared to $5.90-$6.30 ($6.10 midpoint) from January.

KSU U.S. Wheat Forecast for “next crop” MY 2015/16

KSU projections of “next crop” MY 2015/16 supply-demand balances and prices are represented in two scenarios, either “Trend Yield” or “Short Yield” scenarios, which are as follows. A) “Trend Yield” Scenario: 60% prob. of 54.830 million acres (ma) planted, 46.105 ma harvested, 45.9 bu/ac trend yield, 2.116 billion bu. (bb) production, 2.958 bb total supplies, 1.050 bb exports, 2.260 bb total use, 698 mb end stocks, 30.9% S/U, $6.20 /bu U.S. average price. B) “Short Yield” Scenario: 40% prob. of 54.830 ma planted, 46.105 ma harvested, 43.5 bu/ac trend yield, 2.006 bb production, 2.858 bb total supplies, 1.025 bb exports, 2.224 bb total use, 634 mb end stocks, 28.5% S/U, $6.45 /bu U.S. average price. The key assumption in these KSU projections is that there will be a moderate recovery in U.S. wheat exports.

USDA World Wheat

World wheat total supplies of 912.5 mmt in “current crop” MY 2014/15 are up from 891.6 mmt in MY 2013/14, and 855.4 mmt in MY 2012/13. Projected World wheat ending stocks in “current crop” MY 2014/15 of 197.9 mmt (27.7% S/U) are up from 187.5 mmt (26.6% S/U) in MY 2013/14, and from 174.5 mmt (25.8% S/U) in MY 2012/13. For perspective, these figures can be compared to the historic World wheat ending stocks and ending stocks-to-use minimums of 129.7 mmt and 21.1% S/U in MY 2007/08.

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Kansas Wheat fields a year ago (January 2014) (Source: http://kansasagnetwork.com/2014/kansas-wheat-condition-drops-significantly-during-the-month-of-january/)

KSU Corn Market Outlook in February 2015: Forecasts for 2014/15 and 2015/16 Corn Market S/D and Prices

An analysis of U.S. and World corn supply-demand factors and 2014 price prospects following the USDA’s February 10th USDA Crop Production and World Agricultural Supply Demand Estimates (WASDE) reports will be available on the KSU AgManager website on Wednesday, February 18th  (http://www.agmanager.info/default.asp).

Following is a summary of the article on “Corn Market Outlook in February 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_02-18-15_Corn.pdf

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Summary

Introduction

Since the USDA released its World Agricultural Supply and Demand Estimates (WASDE) reports on February 10th, MAR 2015 and DEC 2015 corn futures prices have moved sideways, raising hopes that seasonal lows in January-February have occurred, and that prices may eventually move higher into the spring and provide eventual returns to storage for U.S. crop producers resisting sales at sub-$4.00 cash prices. With 1) a record high 2014 U.S. corn crop, and 2) prospects for record or near-record World corn production and ending stocks in the “current crop” 2014/15 marketing year, prospects for a corn futures price rally above say $5.00 appear limited – unless unexpected and substantial crop production or export availability problems occur in other major coarse grain production regions of the World (such as in South America or Ukraine). Absent these occurrences, price prospects are limited until at least April-May 2015 – the main U.S. corn planting season.

USDA U.S. Corn Forecast for “Current crop” MY 2014/15

The USDA left unchanged its forecast of 2014 U.S. corn production to be a record 14.216 billion bushels (bb), based on projected planted and harvested acreage of 90.597 million acres or ‘ma’, and 83.136 ma, respectively, and a record 2014 U.S. corn yield of 171.0 bushels per acre. Projected record U.S. corn total supplies of 15.668 bb (billion bushels) are up 5.4% from 14.686 bb last year. Projected MY 2014/15 total corn usage of 13.645 bb (up 50 mb or million bushels from a month ago) is also a record, with ethanol use of 5.250 bb (up 116 mb from last year), non-ethanol FSI use of 1.395 bb (up 28 mb), exports of 1.750 bb (down 167 mb from a year ago), and feed and residual use of 5.250 bb (up 214 mb vs last year). Ending stocks are forecast at 1.827 bb (13.4% S/U) – down 50 mb from a month ago, but up from 1.232 bb (9.2% S/U) in MY 2013/14, and 821 mb (7.4% S/U) in MY 2012/13. The USDA forecast that “current crop” MY 2014/15 U.S. average cash corn prices to be in the range of $3.40-$3.90 per bu. with a midpoint of $3.65 – vs. $4.46 in MY 2013/14, and $6.89 in MY 2012/13.

KSU U.S. Corn Increased Usage Scenario for “Current Crop” MY 2014/15

An alternative KSU forecast for “current crop” MY 2014/15 is: 20% prob. of 15.472 bb U.S. corn supplies (same as USDA), 13.741 bb total use (up 0.7% from USDA), 1.731 bb ending stocks, 12.6% S/U, & $3.80 /bu U.S. corn price (up $0.15 vs USDA)

KSU U.S. Corn S/D Forecasts for “Next Crop” MY 2015/16

Two KSU projections for “next crop” MY 2015/16 are as follows:

a) “2015 Less 3 Million Acre-13.4 bb Production” Scenario: 87.597 ma planted, 80.248 ma harvested, early season USDA baseline forecast yields of 167.2 bu/ac, 2015 U.S. corn production of 13.417 bb, total supplies of 15.269 bb, total use of 13.725 bb, ending stocks of 1.444 bb, 10.52% S/U, & $4.15 /bu U.S. corn MYA prices;

b) “2015 Less 3 Million Acre-13.0 bb Production” Scenario: Planted and harvested acres unchanged, but a KSU trend line yield forecast of 162.3 bu/ac, U.S. corn production of 13.024 bb, total supplies of 14.876 bb, total use of 13.585 bb, ending stocks of 1.291 bb, 9.50% S/U, & $4.30 /bu U.S. corn MYA prices.

World Corn Supply-Demand

World total supplies of 1,165 mmt are projected for “current crop” MY 2014/15, up from 1,127 mmt in MY 2013/14, and 1,002.5 mmt in MY 2012/13. Projected World corn ending stocks of 189.6 mmt (19.5% S/U) in “current crop” MY 2014/15 are up from 172 mmt (18.1% S/U) in MY 2013/14, and from 138 mmt (16.0% S/U) in MY 2012/13.

Combined MY 2014/15 corn production of major exporters Brazil (75.0 mmt – down 4.5) and Argentina (23.0 mmt – down 3.0) is projected to be down 10.5 mmt (down 10%) from MY 2013/14. Forecast Ukraine 2014 corn production of 28.5 mmt is down 2.45 mmt from a year ago.

With closing CME NOV-2015 soybean futures of $9.86 ¼ and CME DEC-2015 corn futures of $4.20 ½ on 2/17/2015, the soybean/corn price ratio of 2.35 is neutral for the two crops in the U.S. (i.e., being equal to the customary 2.3 breakeven level). Lack of profitability for U.S. corn at expected 2015 harvest prices is likely to limit 2015 U.S. corn planted acres and corn production potential, and to provide at least a moderate amount of support for U.S. corn prices in “next crop” MY 2015/16.

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KSU 2015 Soybean Markets & Profitability Prospects in South Central Kansas

Following is the Soybean Markets and Profitability Prospects presentation given at the K-State 2015 Soybean School in Derby, Kansas on Wednesday, February 4, 2015.  This presentation is focused on both the profitability of soybean production in South Central Kansas, and market prospects for U.S. soybeans in “current crop” 2014/15 and “next crop” 2015/16.  This presentation is also available on the KSU AgManager website at the following web addresses:

http://www.agmanager.info/marketing/outlook/crop_outlook/default.asp

http://www.agmanager.info/marketing/outlook/crop_outlook/OBrien_SoybeanSchool_Derby_02-04-15.pdf

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Following are selected parts of the presentation given in Derby, Kansas on Wednesday, February 4th.

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