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)

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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.

https://i2.wp.com/farm8.staticflickr.com/7291/8741367904_07a1231f76_b.jpg

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.

https://i0.wp.com/cornandsoybeandigest.com/site-files/cornandsoybeandigest.com/files/imagecache/large_img/uploads/2013/12/4-corn-uniform-emergencea.jpg

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

KSU Soybean Market Outlook in Early May 2015 – Heading into the 2015 Planting and Growing season

An analysis of U.S. and World soybean supply-demand factors and 2015-2016 price prospects following the USDA’s April 9th 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 ************************

Summary

Introduction

Since the USDA released its World Agricultural Supply and Demand Estimates (WASDE) report on April 9th, soybean futures prices have moved sideways-to-higher. 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). Soybean price prospects seem limited until at least late 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.

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 projected U.S. total supplies at a record 4.091 billion bushels (bb) (up 5 mb), crush at 1.795 bb, exports at a record 1.790 bb, record total use at 3.721 bb (up 20 mb), and ending stocks at an 8 year high of 370 mg (down 15 mb). Ending stocks-to-use are projected at 9.94% – 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 $9.60-$10.60 (midpoint of $10.10 /bu) – down from $13.00 in MY 2013/14, and from $14.40 in MY 2012/13.

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

Adjusting the USDA forecast from USDA Agricultural Outlook Forum for more current planted acreage estimates, the following projection is obtained: for 2015 and “next crop” MY 2015/16: 84.635 ma planted, 82.615 ma harvested, 46.0 bu/ac yield, 3.800 bb production, 4.241 bb total supplies, 3.775 bb total use, 466 mb ending stocks, 12.34% S/U, and $9.00 /bu price. Alternative KSU forecasts for “next crop” MY 2015/16 are as follows: A) KSU “Normal Crop” Scenario: 80% prob. of 84.635 ma planted, 83.615 ma harvested, trend yield of 45.1 bu/ac, 3.771 bb 2015 production, 4.161 bb U.S. soybean total supplies, 3.730 bb total use, 431 mb end stocks (vs 370 mb in 2014/15), 11.55% ending S/U (vs 9.94% in MY 2014/15), & $9.60 /bu (vs $10.10 in MY 2014/15). B) KSU “Short” Scenario: 20% prob. of 84.635 ma planted, 83.615 ma harvested, low yield of 40.0 bu/ac, 3.345 bb 2015 production, 3.745 bb U.S. soybean total supplies, 3.493 bb total use, 252 mb end stocks, 7.21% ending S/U (vs 9.94% in MY 2014/15), & $11.20 /bu (vs $10.10 in MY 2014/15).

World Soybean Supply-Demand

Record high projected World soybean production of 315.5 mmt in “current crop” MY 2014/15 is forecast to be up from 283.6 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 (57.0 mmt – up 3.0 mmt), and Paraguay (8.5 mmt – up 0.3 mmt), totaling 160.0 mmt (up 11.1 mmt or 7.5% from 148.9 mmt last year). World soybean exports of 117.5 mmt in “current crop” MY 2014/15 are up from 112.9 mmt in MY 2013/14, and up from 100.5 mmt in MY 2012/13. Record high projected World soybean ending stocks of 89.6 mmt (31.0% S/U) in “current crop” MY 2014/15 are up from 66.3 mmt (24.3% S/U) in MY 2013/14, and up from 57.4 mmt (22.0 % S/U) in MY 2012/13. With the USDA projecting “next crop” MY 2015/16 U.S. soybean prices at $9.00 /bu, an implied World soybean percent stocks-to-use level of approximately 33.5% is implicitly projected – which would be a new record high by 3.5% over 31.0% in “current crop” MY 2014/15. This implied level of World soybean stocks-to-use does not adjust for potential impacts of current U.S. currency exchange rates, which would likely lower this implied World soybean % stocks-to-use to somewhere in the range of a minimum of 31.0% to less than 33.5%.   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 – “Normal” vs “Short” Crop Scenarios for MY 2015/16

An analysis of U.S. and World corn supply-demand factors and 2014 price prospects in late April 2015, following the USDA’s April 9th USDA Crop Production and World Agricultural Supply Demand Estimates (WASDE) report, and ahead of its May 12th 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 Late April 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_04-30-15_Corn.pdf

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Summary

Overview

Since the USDA released its World Agricultural Supply and Demand Estimates (WASDE) report on April 9th, corn futures prices have moved sideways-to-lower, leading to the lowest futures prices that have occurred during the January-April 2015 period. 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 some important changes in its forecast of U.S. corn usage and ending stocks in the current 2014/15 marketing year, but these adjustments resulted in no major 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 13.645 bb (down 50 mb or million bushels from a month ago) is also a record, with ethanol use of 5.200 bb, non-ethanol FSI use of 1.395 bb (up 28 mb vs last year), exports of 1.800 bb, and feed and residual use of 5.250 bb (down 50 mb, and up 214 mb vs last year).

Ending stocks are forecast at 1.827 bb (13.39% S/U) – up 50 mb from March, and 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 $3.55-$3.85 per bu. with a midpoint of $3.70 vs. $4.46 in MY 2013/14, and $6.89 in MY 2012/13.

https://bunge.s3.amazonaws.com/categories/images/000/000/029/content/AnimalFeed-CORNFEED_iStock_000019403998Medium_pw_v1.jpg?1357859290

Corn being fed to beef cattle (source: https://www.bungenorthamerica.com/products/categories/29-corn-feed)

USDA U.S. Corn S/D and Price Forecast for “New Crop” MY 2015/16

The USDA’s projected supply-demand, and price scenarios for “new crop” MY 2015/16 (with minor adjustments) are as follows: a) “2015 Less 1.4 Million Acre-13.6 bb Production” Scenario: 89.199 ma planted, 81.706 ma harvested, early season USDA baseline forecast yields of 166.8 bu/ac, 2015 U.S. corn production of 13.629 bb, total supplies of 15.481 bb, total use of 13.750 bb, ending stocks of 1.731 bb, 12.6% S/U, & $3.85 /bu U.S. corn MYA prices.

KSU U.S. Corn S/D and Price Forecast for “New Crop” MY 2015/16

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

a) “2015 “Normal Crop” 13.3 bb Production” Scenario (80% prob.): 88.199 ma planted, 81.706 ma harvested, KSU long term trend yield of 162.3 bu/ac, 2015 U.S. corn production of 13.261 bb, total supplies of 15.113 bb, total use of 13.700 bb, ending stocks of 1.413 bb, 10.31% S/U, & $4.30 /bu U.S. corn MYA prices;

b) “2015 “Short Crop” 12.7 bb Production” Scenario (20% prob.): Planted and harvested acres unchanged from the previous scenario, but with a KSU low yield forecast of 155.0 bu/ac, U.S. corn production of 12.664 bb, total supplies of 14.516 bb, total use of 13.550 bb, ending stocks of 966 mb, 7.13% S/U, & $6.75 /bu U.S. corn MYA prices.

World Corn Supply-Demand

World total supplies of 1,163 mmt are projected for “current crop” MY 2014/15, up from 1,124 mmt in MY 2013/14, and 1,000 mmt in MY 2012/13. Projected World corn ending stocks of 188.5 mmt (19.3% S/U) in “current crop” MY 2014/15 are up from 170.8 mmt (17.9% S/U) in MY 2013/14, and from 135.4 mmt (15.7% S/U) in MY 2012/13.

With closing CME NOV-2015 soybean futures of $9.53 and CME DEC-2015 corn futures of $3.83 ¼ on 4/30/2015, the soybean/corn price ratio of 2.48 favors the planting of soybeans in the United States in 2015. 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 “new crop” MY 2015/16 in the spring and early summer.

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Late corn planting in 2012 (Source: http://www.agweb.com/article/odds_for_a_late-planted_corn_crop_NAA_University_News_Release/)

 

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)

https://i2.wp.com/unitedsoybean.org/wp-content/uploads/2013/07/No-till_habitat_buffer_strip_Lloyd_Farm_KS.jpg

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 )