KSU Soybean Market Outlook in Late-December 2017 – Healthy Demand Upholding World Soybean Markets

An analysis of U.S. and World soybean supply-demand factors and 2018 price prospects following the USDA’s December 12th Crop Production and World Agricultural Supply Demand Estimates (WASDE) reports will be available on the KSU AgManager website (http://www.agmanager.info/)

This article also analyzes information from the USDA’s Long Term Agricultural Projections for U.S. soybeans, particularly for the “Next Crop” 2018/19 Marketing Year to begin on September 1, 2018.  The USDA’s long term outlook is found at the following web address:

https://www.usda.gov/oce/commodity/projections/

Following is a summary of the article on Soybean Market Outlook in Late-December 2017 – with the full article and accompanying analysis to be available on the KSU AgManager website at the following web address:

http://www.agmanager.info/grain-marketing/grain-market-outlook-newsletter

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KSU U.S. Sorghum and World Coarse Grain Market Outlook in Late-December 2017

An analysis of U.S. and World Grain Sorghum & World Coarse Grain Market Outlook following the USDA’s December 12th USDA Crop Production and World Agricultural Supply Demand Estimates (WASDE) reports is available on the KSU AgManager website  (http://www.agmanager.info/).

This article also examines the USDA’s Long Term Agricultural Projections in regards to U.S. grain sorghum market outlook in “next crop” MY 2018/19.  The USDA’s Long Term Agricultural Projections can be found at the following web address:

https://www.usda.gov/oce/commodity/projections/

Following is a summary of the article on “U.S. Grain Sorghum and World Coarse Grain Market Outlook” with the full article and accompanying analysis on the KSU AgManager website to be available shortly at the following web address:

http://www.agmanager.info/grain-marketing/grain-market-outlook-newsletter

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Summary

A. Grain Sorghum Market Overview

In the December 12th Crop Production and World Agricultural Supply and Demand Estimates (WASDE) reports, the USDA forecast that the 2017 U.S. grain sorghum crop would be 356 million bushel (mb).  This projection of 2017 U.S. Grain Sorghum production combined with a large 2017 U.S. Corn crop of 14.578 billion bushels (bb) have caused U.S. feedgrain markets to focus on “large feedgrain production and supply” scenarios – and have brought continued pressure to both U.S. grain sorghum and corn market prices.  Just as with U.S. corn, wheat, and soybeans, current cash bids for grain sorghum are below full economic cost of production in most instances.  However, higher than anticipated 2017 grain sorghum yields at many Kansas locations may help lower cost of production per bushel and help to mitigate low grain sorghum prices to some degree. 

Strong exports of U.S. grain sorghum during November-mid December 2017 have had a tangible, positive impact on grain sorghum prices in Central and parts of Western Kansas.  China and Japan have been the main  export buyers from the U.S., while purchases from Mexico have declined to date in the “new crop” 2017/18 marketing year.  In response, the USDA raised its’ U.S. Grain Sorghum export projections sharply – up 50 million bushels (mb) to 260 mb for this marketing year ending August 31, 2018.  And in a textbook example of economic “crowding out” – this strong foreign export demand for U.S. grain sorghum has raised domestic prices and is causing a projected shifting of usage away from U.S. domestic livestock feeding and ethanol production in “new crop” MY 2017/18.

The USDA also released Long Term Agricultural Projections on November 28th that anticipate both an increase in U.S. grain sorghum average prices to $3.30 per bushel (equal to the U.S. corn price forecast), and a 1 million acre (+17%) increase in grain sorghum planted acreage in the “next crop” 2018/19 marketing year.  

B. Kansas Cash Grain Sorghum Prices

On December 26th cash grain sorghum price bids at major grain elevators in Western Kansas were in the range of $3.08 – $3.31 /bu – with basis levels $0.45 to $0.22 /bu under CME MARCH 2018 corn futures.  The high bid of $3.31 /bu was in Colby, where the corn price that same day was $3.00 /bu ($0.53 under MARCH).  

Central Kansas cash grain sorghum price bids ranged from $3.17 ½ to $3.48 /bu with basis $0.35 to $0.05 / bu under.  The high bid of $3.48 /bu was in Salina, where the highest corn price was $3.09 ¾ /bu ($0.43 under MARCH).

In East Central Kansas at Topeka, the highest reported grain sorghum price bid was $3.87 ½ /bu (basis = $0.35 over MARCH 2018 corn) – compared to the highest corn bid of $3.09 ¾ /bu ($0.43 under MARCH). 

Kansas ethanol plant price bids for grain sorghum on Dec. 26th ranged from $3.42 to $3.57 /bu, with basis $0.10 under to $0.05 over.  Ethanol plant corn bids were $3.32-$3.79 /bu, with basis $0.20 under to $0.27 over.

C. Market Factors for U.S. Grain Sorghum & Other Feedgrains in 2018

1) Whether the recent strength in U.S. Grain Sorghum exports to China and Japan continues through Spring-Summer 2018 will be THE key factor in grain sorghum price prospects for at least the first half of the year.  IF the recent pace of U.S. grain sorghum exports were to continue at the levels of November-early December 2017 through August 2018, then total U.S. grain sorghum exports would end up being over 300 million bushels in “new crop” MY 2017/18 by KSU estimates. 

2) Usage of U.S. grain sorghum for ethanol production and livestock feeding is likely to be “crowded out” by strong sorghum exports in “new crop” MY 2017/18 – should they continue at their current pace through Spring-Summer 2018.   However, there are ample to abundant supplies of low priced U.S. corn available for these domestic U.S. feedgrain usage industries to use without interruption.  This is occurring when continued strong domestic U.S. fuel ethanol use and livestock feeding of the 2017 crop U.S. feedgrains are anticipated for the remainder of the “new crop” 2017/18 marketing year.

3) Given the pace of U.S. grain sorghum exports, it is likely that there will be reduced grain sorghum storage  beyond the Winter months – as attractive pricing opportunities perform their “demand pull” effect upon farmer’s marketing actions.

4) Higher U.S. grain sorghum prices relative to competitive feedgrains will likely “draw” increased 2018 U.S. grain sorghum planted acreage – as projected by the USDA in its Long Term Agricultural Projections.  The question may be “Just how many more acres of grain sorghum will U.S. farmers plant in 2018?”   It is possible that higher acreage and good growing conditions could bring about an increase in 2018 U.S. Grain Sorghum production to 450-500+ million bushels – much larger than the USDA’s 2018 forecast of 384 mb. 

D. USDA Forecast for “Next Crop” MY 2018/19 & “New Crop” MY 2017/18

In its November 28th Long Term Agricultural Projections, the USDA projected 2018 U.S. Grain Sorghum plantings of 6.700 million acres (ma), up 17% or ≈ 1 ma from 5.709 ma in 2017.  Harvested acres U.S. grain sorghum in 2018 are projected to be 5.700 ma, up from 5.049 ma in 2017.   Average yields in 2018 in the U.S. are forecast at 67.3 bu/ac, down from 70.4 bu/ac in 2017.  As a result, 2018 U.S. Grain Sorghum production is forecast to be 384 mb – up from 356 mb in 2017, but down from 480 mb in year 2016 and 597 mb in 2017.  

Forecast “next crop” MY 2018/19 U.S. Grain Sorghum total supplies are 405 mb (vs 391 this marketing year, and 519-620 mb the 2 years before).   United States’ Grain Sorghum exports are projected to be 230 mb in “next crop” 2018/19 – down from 260 mb in “new crop” MY 2017/18, and less than 241 mb in MY 2016/17.  Total use of U.S. Grain Sorghum in “next crop” MY 2018/19 of 370 mb is unchanged from “new crop” MY 2017/18 – but down from 485-583 mb the two previous years. 

Ending stocks of U.S. Grain Sorghum in “next crop” MY 2018/19 are projected to be 35 mb (9.46% Stocks/Use) – up from 21 mb (5.68% Stocks/Use) in “new crop” MY 2017/18.  

The season average price for U.S. Grain Sorghum in “next crop” MY 2018/19 is projected to be $3.30 /bu – up from $3.10 /bu in “new crop” MY 2017/18. 

This scenario for “new crop” MY 2017/18 is given an 80% likelihood of occurring by KSU Extension Agricultural Economist D. O’Brien.

E. Alternative KSU Supply-Demand & Price Forecast for “New Crop” MY 2017/18

Two (2) alternative KSU projections for “new crop” MY 2017/18 U.S. Grain Sorghum Total Use include the following forecasts:

1) “Higher Exports” scenario (10% probability) for “new crop” MY 2017/18: 2017 Planted / harvested acres of 5.519/4.812 ma, 2017 production of 339 mb, total supplies of 339 mb, exports of 290 mb, total use of 359 mb, ending stocks of 13 mbb, 3.62% ending stocks-to-use, and $3.40 /bu U.S. average price.

2) “Lower Exports” scenario (10% probability) for “new crop” MY 2017/18:  2017 Planted / harvested acres of 5.519/4.812 ma, 2017 production of 339 mb, total supplies of 339 mb, exports of 230 mb, total use of 350 mb, ending stocks of 23 mbb, 6.57% ending stocks-to-use, and $3.00 /bu U.S. average price.

F. World Coarse Grain Supply-Demand

The USDA projected that “new crop” 2017/18 marketing year World Coarse Grain total supplies of 1,586.3 mmt will be down 2.0% from 1,618.7 mmt in “old crop” MY 2016/17, but still up 5.2% over 1,507.35 mmt in MY 2015/16.   Projected World Coarse Grain total use of 1,354.1 mmt in “new crop” MY 2017/18 is down marginally from “old crop” MY 2016/17, but up 7.9% over 1,254.9 mmt in MY 2015/16.   “Coarse Grains” include grain sorghum, corn, barley, oats, rye, millet, and mixed grains.

World Coarse Grain ending stocks are forecast to decline, with the USDA projecting ending stocks of 232.2 mmt in “new crop” MY 2017/18, down 11.5% from 262.4 mmt in “old crop” MY 2016/17, and down 8.0% from 252.4 mmt in MY 2015/16.  Although World Coarse Grain ending stocks are projected to be the eighth highest on record in “new crop” MY 2017/18 at 232.2 mmt, World Coarse Grain percent ending stocks-to-use in “new crop” MY 2017/18 are forecast to actually decline to 17.15% – to the lowest level since 17.12% in MY 2013/14.  This is indicative that strong World usage for coarse grains at low prices is expected to continue.  

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KSU Wheat Market Outlook in Late-December 2017 – U.S., World, and “World-Less-China” Market Scenarios for 2018

This report provides an analysis of U.S. and World wheat supply-demand factors and 2018 marketing year price prospects following the USDA’s December 12, 2017 Crop Production and World Agricultural Supply Demand Estimates (WASDE) reports.  It also incorporates U.S. wheat market supply-demand and price projections for the “next crop” 2018/19 marketing year from the USDA’s Long Term Agricultural Projections released on November 28, 2017. This article will be available in full on the KSU AgManager website in coming days (http://www.agmanager.info/).

Following is a summary – with the full analysis-article for Wheat Market Outlook in Late-December 2018 to be found at this web location:

http://www.agmanager.info/grain-marketing/grain-market-outlook-newsletter

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Summary

A. Wheat Market Response to the December 12th USDA Reports

Since the USDA’s December 12th World Agricultural Supply and Demand Estimates (WASDE) report, CME MARCH 2018 Kansas HRW Wheat futures have traded higher.  MARCH 2018 Kansas HRW wheat futures opened at $4.13 on 12/12/2017 – the day of the report – but closed lower to $4.11 ¼ that day.  Since then, MARCH 2018 HRW wheat futures have trended higher to a close of $4.22 ¾ on Friday, December 22nd.   

That same day Kansas cash wheat price terminal quotes in central and eastern Kansas ranged from $3.42 ¼ to $3.83 ¼ per bushel – with basis ranging from $0.80 under to $0.39 under MARCH 2018 futures.  In western Kansas, representative wheat elevator bids ranged from $3.47 to $3.64 per bushel – with basis ranging from $0.85 under to $0.58 under MARCH 2018 futures.  Although cash prices are markedly above marketing loan rates, basis levels are still “wide and weak” compared to historic Kansas wheat basis patterns.

B. Key World Wheat Supply-Demand Findings in the December 12th USDA WASDE Report

For the “new crop” 2017/18 marketing year (MY) beginning on June 1, 2017, the USDA projected the following.

First, that World wheat total supplies would be 1,010.5 million metric tons (mmt) with total use of 742.1 mmt – both being record high levels for “new crop” MY 2017/18. 

Second, that World wheat exports will also trend marginally lower to 182.15 mmt in the “new crop” 2017/18 marketing year – down from a record high of 183.2 mmt last year, but still up from 172.8 mmt two years ago. 

Third, that World wheat ending stocks would be a record high 268.4 mmt in “new crop” MY 2017/18 – up from the previous record of 255.3 mmt in MY 2016/17, and from 241.4 mmt in MY 2015/16. 

Fourth, that World wheat percent ending stocks-to-use (S/U) would be 36.24% – up from 34.5% last year, and from 33.9% two years ago – rising to the highest level since 36.25% in MY 1998/99.

C. Perspectives on Current World Wheat Stock Levels

For a perspective on how historically large World total wheat stocks and World wheat percent stocks-to-use now are, consider that in MY 2007/08 the 34-year low in World wheat ending stocks of 128.2 mmt and at least a 57-year low in percent ending stocks-to-use of 20.9% stocks/use both occurred.  The 2007/08 marketing year was the last significant World wheat “short crop” marketing year to have occurred. 

The “tight supply-demand” situation in MY 2007/08 compares to the most recent USDA projections of 268.4 mmt ending stocks and 36.2% ending stocks-to-use projected for “new crop” MY 2017/18.  The present “large crop-over supply” situation in World and U.S. wheat markets continues to have a prevalent limiting influence on U.S. and World wheat prices – even with recent drought-fueled moves higher in the market. 

D. “World Less China” Wheat Market Situation

The broader “large crop-over supply-low price” situation in the World wheat market may be “obscuring” at some important underlying market issues.  

While the aggregate supply of wheat in World markets has grown, the supply of wheat from a “World Less China” perspective is projected to have actually “contracted” or “diminished” further in “new crop” MY 2017/18.   “World-Less-China” wheat percent (%) stocks-to-use have declined to the tightest level since at least MY 2012/13 when U.S. wheat cash prices averaged a record high $7.77 /bu.  If this “China supply isolation factor” eventually leads to noticeably tighter available global supplies of openly exportable wheat in the next 12 months, it could have a significant positive impact on U.S. and World wheat market prices.

However, unless there is this change in the broader, overriding focus of the World wheat market away from aggregate global supplies to available “World-Less-China supplies – it is likely that significant World wheat production problems and/or trade disruptions would need to occur in year 2018 in order to have wheat prices recover significantly in 2018.   Such disruptions elsewhere would likely cause the market to then focus on the limited availability of food quality wheat outside of China in the World market.   Also, ongoing strength in the U.S. dollar exchange rate continues to be a negative factor limiting the competitive affordability of U.S. wheat exports in World markets.    

E. U.S. Wheat Supply/Demand for “New Crop” MY 2017/18 & “Next Crop” MY 2018/19  

The USDA released their wheat production, supply-demand and price projections for the U.S. for “new crop” MY 2017/18 in the December 12th WASDE report, and for “next crop” MY 2018/19 in its November 28th Long Term Agricultural Projections.   

U.S. wheat plantings are forecast to be 45.000 million acres (ma) in 2018, down from 46.012 ma in 2017, and 50.119 ma in 2016, to the lowest level since the early 1900s.  Harvested acres are forecast at 38.3 ma in 2018 (85.11% harvested-to-planted), up from 37.586 ma (81.69% harvested-to-planted) in 2017, but down from 43.850 ma in 2016.  

The 2018 U.S. average wheat yield is estimated at 47.4 bu/ac, up from 46.3 bu/ac in 2017, but down from the 2016 record of 52.7 bu/acre. 

Wheat production in the U.S. in 2018 is forecast to be 1.815 billion bushels (bb), up from 1.741 bb in 2017, but down from 2.309 bb in 2016.  After adjustments by Kansas State University from the December 12th WASDE report, projected “next crop” MY 2018/19 total supplies are forecast at 2.910 bb, down from 3.071 bb in “new crop” MY 2017/18, and down from 3.402 bb in MY 2016/17.  U.S. Wheat total use of 2.072 bb is forecast for “next crop” MY 2018/19, down from 2.111 bb in “new crop” MY 2017/18, and from 2.222 bb in MY 2016/17. 

With previously mentioned KSU adjustments from the December 12th WASDE report, the USDA projected “next crop” MY 2018/19 ending stocks to be 838 million bushels (mb) (40.44% stocks/use), down from 960 mb in “new crop” MY 2017/18 (45.48% stocks/use), and 976 mb in MY 2016/17 (50.03% stocks/use).   

United States’ wheat prices are projected to average $4.60 /bu in “next crop” MY 2018/19, unchanged from “new crop” MY 2017/18, but up from $3.89 in MY 2016/17, and comparable to $4.89 /bu in MY 2015/16, and $5.99 /bu in MY 2014/15.   It is estimated by Kansas State University that these USDA projections for “new crop” MY 2017/18 have a 75% probability of occurring.

F. Two Alternative KSU U.S. Wheat S/D Forecast for “New Crop” MY 2017/18 

To represent possible alternative outcomes from the USDA’s December 12th projection, two potential KSU-Scenarios for U.S. wheat supply-demand and prices are presented for “new crop” MY 2017/18.    

KSU Scenario 1) “Lower Export” Scenario (15% probability) assumes for “new crop” MY 2017/18 that the following outcome occurs.  This scenario assumes that there will be 46.012 ma planted, 81.69% harvested-to-planted, 37.586 ma harvested, 46.3 bu/ac average yield, 1.741 bb production, 3.071 bb total supplies, 775 mb exports, 120 mb feed & residual use, 1.911 bb total use, 1.160 bb ending stocks, 60.70% Stocks/Use, & $4.10 /bu U.S. wheat average price.

KSU Scenario 2) “Higher U.S. Wheat Exports” Scenario (10% probability) assumes for “new crop” MY 2017/18 that the following outcome happens.  This scenario assumes that there will be 46.012 ma planted, 81.69% harvested-to-planted, 37.586 ma harvested, 46.3 bu/ac average yield, 1.741 bb production, 3.071 bb total supplies, 1.150 bb exports, 120 mb feed & residual use, 2.286 bb total use, 785 mb ending stocks, 34.34% Stocks/Use, & $5.10 /bu U.S. wheat average price.

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KSU Corn Market Outlook in December 2017: Prospects for “New Crop” MY 2017/18 and “Next Crop” MY 2018/19

An analysis of U.S. and World Corn supply-demand & price prospects for the “New Crop” 2017/18 and “Next Crop” 2018/19 Marketing Years are provided in the following article summary.  This information follows the USDA Crop Production and World Agricultural Supply and Demand Estimates (WASDE) reports on December 12, 2017.

A full version of this article is available on the KSU AgManager website http://www.agmanager.info/ at the following web address:

http://www.agmanager.info/grain-marketing/grain-market-outlook-newsletter

Following is a summary of the article on “Corn Market Outlook in December 2017″

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Summary

A. Corn Market Overview

Since the USDA’s December 12th Crop Production and World Agricultural Supply and Demand Estimates (WASDE) reports, MARCH 2018 CME corn futures prices have traded higher and lower in a mixed manner.  Longer term – MARCH 2018 Corn futures have been trending lower – closing at $3.49 ¼ on December 20th.   In its’ December 12th USDA Crop Production report, the USDA maintained its projection from November of 2017 U.S. corn yields to average a record high 175.4 bu/ac, with 2017 U.S. corn production at 14.578 billion bushels (bb) – both up substantially from trade expectations during the summer of 2017.

Since both the November 9th and December 12th USDA reports, market expectations have reinforced a consensus consistent with the USDA projection of a “large supply – low price” scenario, leaving DEC 2017 corn futures (now expired) to trade in the range of $3.35 ¼ – $3.47 per bushel during the November 10th through December 14th late- harvest period.  The USDA will provide updated 2017 U.S. corn production numbers in its upcoming January 12, 2018 USDA Crop Production report.

It continues to be true that any significant corn futures or cash market price rallies through winter 2017-2018 on into early Spring 2018 are likely to be limited by ending stocks of U.S. corn in the 2.350-2.500 billion bushels (bb) range, coupled with ending stocks-to-use of 16.0%-17.5% for the 2017/18 marketing year.   However, in Spring-early Summer 2018 the U.S. corn market is likely again to have to weigh the annual risk of weather-limiting 2018 U.S. corn production prospects (i.e., the possibility of 2018 U.S. corn production less than 13.500 bb??) and tighter ending stocks (less than 1.500 bb??) in “next crop” MY 2018/19.  And that risk again is likely to provide both old crop and new crop pricing opportunities in Spring-Summer 2018.

One positive long-term factor in the U.S. corn market is the considerable “tightening up” that is forecast for foreign (non-U.S.) corn supply-demand balances in the “new crop” 2017/18 marketing year.   If this occurs, it would lead to larger U.S. corn export shipments in early 2018 than are currently happening, and support higher U.S. corn prices in Spring-Summer 2018 than are represented by 2018 Corn futures contracts.

B. Kansas Cash Corn Prices & Basis Bids

In Western Kansas on Wednesday, December 20th cash corn bids at major grain elevators ranged from $2.96 ($0.53 under MARCH futures) to $3.37 ($0.12 under), and ranged from $3.01 ½ ($0.48 under) to $3.24 ¼ ($0.25 under) in Central Kansas.  Even though Kansas corn prices have remained low in recent weeks, these prices still are still mostly higher than a year ago when bids statewide had fallen to $2.66-$2.96 on December 23, 2016.  These prices were still above marketing loan rates for corn across the state, with corn loans near $2.05 in Central Kansas and $2.19 per bushel in Western Kansas

Cash corn price bids in East Central and Northeast Kansas at major terminal locations were $3.24 ¼ – $3.31 ¼ on December 20th, nearly equal to the range of $3.26-$3.28 per bushel on 12/23/2016.  Cash corn bids at Kansas ethanol plants on December 20th ranged from $3.27 ½ ($0.20 under MARCH) to $3.74 ½ ($0.27 over MARCH) – indicating continuing strength in ethanol demand for corn in Kansas and nationwide.

C. Major Corn Market Considerations for Winter-Spring 2018

First, the corn market is likely to be only moderately responsive to any early season 2018 U.S. corn production threats since beginning stocks for “new crop” MY 2017/18 have been projected to be near 2.295 bb rather than down to 1.250-1.500 bb.  If no significant production risk emerges in summer 2018, then these large “old crop” MY 2017/18 carryover supplies will continue to limit 2018 corn crop forward pricing prospects.

Second, low prices for U.S. corn will help maintain strong usage for domestic U.S. ethanol and wet milling production, as well as livestock feeding through at least spring 2018 if not into the summer months. 

Third, the USDA is projecting at least “moderate” continued strength in U.S. corn exports of 1.925 bb for “new crop” MY 2017/18.  United States’ corn export shipments have been “slow” to date in the current marketing year.  However, the USDA maintains its optimism for “new crop” MY 2017/18 U.S. corn exports because of a) low U.S. corn prices,  b) expectations of significantly tighter foreign stocks and percent (%) stocks-to-use for corn, and c) the eventual “using up” of competing South American corn exports in early 2018.

Early forecasts are for 2018 Brazilian corn production to be 95 million metric tons (mmt) in this marketing year with harvests lasting from February through May.  Early forecasts are for 2018 Argentina corn production to be 42 mmt in this marketing year with harvests lasting from March through May.  However, dry conditions may limit 2018 corn production in Argentina and southern Brazil – and subsequently support U.S. corn exports.

Fourth, a continuing threat exists of U.S. and Foreign economic and/or financial system disruptions that could impact grain, energy, and other commodity markets in 2018.  World geo-political events could provide “shocks” to U.S. and World energy and grain markets which could in turn impact grain prices in either direction depending on the circumstances, the countries involved, and their role in global corn export trade.

D. USDA Supply-Demand & Price Forecast for “New Crop” MY 2017/18

In the December 12th Crop Production reports, the USDA left unchanged its projections of a) projected yields up to a record high of 175.4 bu/ac (vs the previous record of 174.6 in 2016), and b) 2017 U.S. corn production up to 14.578 bb – down from the record high of 15.148 bb in 2016.  The also USDA left unchanged its forecast “new crop” MY 2017/18 total supplies to 16.922 bb – down marginally (20 mb) from last year’s record high.  Total use is forecast at 14.485 bb – raised 50 mb from November on higher ethanol use, but still down 162 mb from last year’s record high.  Ending stocks are projected to be a 2.437 bb (16.8% S/U) – up from 2.295 bb (15.7% S/U) in “old crop” MY 2016/17.  United States’ corn prices are projected to average $3.20 /bu (range of $2.85-$3.55).  This is down $0.16 /bu from $3.36 /bu from “old crop” MY 2016/17. This scenario is given an 80% likelihood of occurring by KSU Extension Agricultural Economist D. O’Brien.

E. Alternative KSU Supply-Demand & Price Forecast for “New Crop” MY 2017/18

Two alternative KSU-Scenarios for U.S. corn supply-demand and prices are presented for “new crop” MY 2017/18.  These projections are to show how varying corn export outcomes could affect the USDA’s projection in the December 9, 2017 WASDE report. 

#1 – KSU “Higher Exports” MY 2017/18 Scenario: “2.250 bb Exports” Scenario (10% probability) assumes: 90.348 ma planted, 82.890 ma harvested, 175.4 bu/ac trend yield, 14.539 bb production, 16.884 bb total supplies, 2.250 bb exports, 14.785 bb total use, 2.099 bb ending stocks, 14.20% S/U, & $3.55 /bu U.S. corn average price; 

#2 – KSU “Lower Exports” MY 2017/18 Scenario: “1.800 bb Exports” Scenario (10% probability) assumes: 90.348 ma planted, 82.890 ma harvested, 175.4 bu/ac trend yield, 14.539 bb production, 16.884 bb total supplies, 1.800 bb exports, 14.360 bb total use, 2.524 bb ending stocks, 17.58% S/U, & $3.20 /bu U.S. corn average price;

F. USDA Supply-Demand & Price Forecast for “Next Crop” MY 2018/19

In the November 28th Long Term Baseline projections, the USDA forecast for “next crop” MY 2018/19 that  2018 U.S. corn planted and harvested acres would equal 91.0 million acres (ma) and 83.7 ma, respectively, both up from 90.429 ma planted and 83.119 ma harvested in 2017.  Corn yields in 2018 are forecast at 173.5 bu/ac, down from the record high of 175.4 bu/ac in 2017.  U.S. corn production is 2018 is projected to be 14.520 bb – down from 14.578 bb now projected for 2017.  

The USDA forecast “new crop” MY 2017/18 total supplies to 17.007 bb – adjusted for changes in the December WASDE report in MY 2017/18 ending stocks.  Total use is forecast at 14.450 bb – down 35 mb from this current marketing year.  Ending stocks are projected to be a 2.557 bb (17.7% S/U) – up from 2.437 bb (16.8% S/U) in “new crop” MY 2017/18.  United States’ corn prices are projected to average $3.30 /bu – up from $3.20 /bu in “new crop” MY 2017/18.

G. World Corn Supply-Demand – With & Without China

World corn production of 1,044.8 million metric tons (mmt) is projected for “new crop” MY 2017/18, down 2.9% from the record of 1,074.8 mmt in “old crop” MY 2016/17, but still up 7.3% from 973.5 mmt in MY 2015/16.  World corn total supplies of 1,272.1 mmt are down marginally from the record high 1,290.5 mmt in “old crop” MY 2016/17, but up from 1,183.2 mmt in MY 2015/16. 

World corn exports of a 151.6 mmt are projected for “new crop” MY 2017/18, down 7.6% from the record high of 164.1 mmt in “old crop” MY 2016/17, and up 26.7% from 119.7 mmt in MY 2015/16.  Projected World corn ending stocks of 204.1 mmt (19.1% S/U) in “new crop” MY 2017/18 are down from the record high 227.3 mmt (21.4% S/U) in “old crop” MY 2016/17, and from 214.9 mmt (22.2% S/U) in MY 2015/16.  Projected Foreign (Non-U.S.) corn ending stocks of 142.2 mmt (16.5% S/U) in “new crop” MY 2017/18 are down from 169.0 mmt (19.8% S/U) in “old crop” MY 2016/17, and from 170.8 mmt (23.1% S/U) in MY 2015/16.  

An alternative view of the World corn supply-demand is presented if Chinese corn usage and ending stocks are isolated from the World market.  “World-Less-China” corn ending stocks are projected to be 124.5 mmt (15.0% S/U) in “new crop” MY 2017/18, down from 126.6 mmt (15.2% S/U) in “old crop” MY 2016/17, but up from 104.1 mmt (13.9% S/U) in MY 2015/16.  These figures show that World stocks-to-use of corn less China’s direct influence are projected to be approximately 21% lower (i.e., 15.0% S/U for the “World-Less-China” versus 19.1% S/U for the “World” overall in “new crop” MY 2017/18).  

At the same time, these figures also show that Chinese ending stocks of corn as proportion of the World total are declining – down from 51.5% in MY 2015/16, to 44.3% in “old crop” MY 2016/17, and down to 39.0% in “new crop” MY 2017/18.  The deliberate actions in recent years – taken by the Chinese government to reduce feedgrain stockpiles – is impacting the relative amount of World total corn stocks they hold.  These actions may increase Chinese import demand for both U.S. corn and grain sorghum.

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KSU Ag Econ “Soybean and Cotton Market Outlook for 2018” Presentation

Following is a presentation on “Soybean & Cotton Market Outlook for 2018”.  This information was given as part of a larger “Grain Market Outlook for 2018” presentation given by Kansas State University Extension Agricultural Economist Daniel O’Brien at a Farming for the Future meeting in Pratt, Kansas on December 14, 2017.

Additional Farming for the Future conferences in Kansas are planned for December 19th in Salina, January 10th in Scott City, and January 11th in Emporia.  Registration information can be found at the following web address:

http://www.agmanager.info/events/farming-future

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The full “Grain Market Outlook for 2018” presentation is available online at the KSU AgManager website at the following web address:

http://www.agmanager.info/sites/default/files/pdf/AGEC520_GrainOutlook_10-19-17.pdf

Information on Wheat, Soybean & Cotton supply-demand and market outlook will be provided in succeeding posts.

Following is information on “Soybean and Cotton Market Outlook for 2018”:

 

KSU Ag Econ “Wheat Market Outlook for 2018” Presentation

Following is a presentation on “Wheat Market Outlook for 2018”.  This information was given as part of a larger “Grain Market Outlook for 2018” presentation given by Kansas State University Extension Agricultural Economist Daniel O’Brien at a Farming for the Future meeting in Pratt, Kansas on December 14, 2017.

Additional Farming for the Future conferences in Kansas are planned for December 19th in Salina, January 10th in Scott City, and January 11th in Emporia.  Registration information can be found at the following web address:

http://www.agmanager.info/events/farming-future

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The full “Grain Market Outlook for 2018” presentation is available online at the KSU AgManager website at the following web address:

http://www.agmanager.info/sites/default/files/pdf/AGEC520_GrainOutlook_10-19-17.pdf

Information on Corn, Grain Sorghum, Soybean & Cotton supply-demand and market outlook is be provided in companion posts.

Following is information on “Wheat Market Outlook for 2018”:

KSU Ag Econ “Corn & Grain Sorghum Market Outlook for 2018” Presentation

Following is a presentation on “Corn & Grain Sorghum Market Outlook for 2018”.  This information was given as part of a larger “Grain Market Outlook for 2018” presentation given by Kansas State University Extension Agricultural Economist Daniel O’Brien at a Farming for the Future meeting in Pratt, Kansas on December 14, 2017.

Additional Farming for the Future conferences in Kansas are planned for December 19th in Salina, January 10th in Scott City, and January 11th in Emporia.  Registration information can be found at the following web address:

http://www.agmanager.info/events/farming-future

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The full “Grain Market Outlook for 2018” presentation is available online at the KSU AgManager website at the following web address:

http://www.agmanager.info/sites/default/files/pdf/AGEC520_GrainOutlook_10-19-17.pdf

Information on Wheat, Soybean & Cotton supply-demand and market outlook will be provided in succeeding posts.

Following is information on “Corn and Grain Sorghum Market Outlook for 2018”: