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)

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/)

https://i1.wp.com/www.kgs.ku.edu/Extension/KSplaces/jpegs/Cedarbluff.jpg

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.

https://i0.wp.com/www.agweb.com/assets/1/6/4-20-12_planting_corn_2012.png

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/)

https://i1.wp.com/www.kgs.ku.edu/Extension/KSplaces/jpegs/Cedarbluff.jpg

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/)