Transcript WHEAT OUTLOOK Midwest Outlook Conference 2005

Feedgrain Market Outlook
& Pricing Opportunities
Grain Sorghum School
Ness City, Kansas
February 29, 2008
Daniel O’Brien & Mike Woolverton
K-State Research and Extension
[email protected]
[email protected]
Historic vs Current Grain Prices
2007/08 Mkt Yr
USDA Est.
$3.65 – $4.15 /bu
KC MO.
Crop
Grain Sorghum
2000-06
Average
$2.20 /bu
$5.23
/bu
Corn
$2.24 /bu
$3.75 – $4.25
/bu
$5.36
/bu
Wheat
$3.35 /bu
$6.45 – $6.85
/bu
$11.95
/bu
Soybeans
$5.66 /bu
$10.00 – $10.80
$14.17
/bu
/bu
Feb. 28, ‘08
Land in Crops
(Millions of acres)
Corn
Soybeans
Hay
Wheat
Cotton
Grain Sorghum
Principle Crops 2
CRP
1Estimates
5 yr. Ave.
07/08
USDA Proj. 08/09 1
79.6
74.2
62.4
59.5
14.1
8.1
297.9
93.6
63.6
61.8
60.4
10.8
7.7
297.9
35.9
90.0 (-4%)
71.0 (+11%)
61.8 (--)
64.0 (+6%)
9.5 (-13%)
7.4 (-4%)
303.7
34.9 (-3%)
for corn, soybeans, wheat, and cotton from the USDA Commodity Outlook Forum,
released February 22, 2008.
2 Total crop land in the United States – 441.6 million acres
Feedgrain
Markets:
Corn &
Grain Sorghum
Current Feedgrain Market Factors

U.S. Feedgrain stocks are adequate




U.S. Ethanol demand continues strong
Strong demand from overseas export buyers



Feedgrain supplies not as tight as for wheat & soybeans
Large 2008 crop (12.5–13.0 billion bu) needed to meet demand
Reduced production in Argentina (dry Dec-Jan) & Mexico (lower
area than expected), increases in South Africa (good rains)
Southern hemisphere corn export competition to increase
seasonally.
Expected competition for U.S. crop acres vs
other crops in Spring 2008 (“bidding” during Feb-May)
MAY 2008 Corn Futures
CBOT: April 2006-February 2008
“2008 MAY Old Crop Corn Contract”
Contract Volume & Open Interest
Ness City, Kansas
Cash Grain Sorghum Price
De Bondurant Grain Co., Ness City, Kansas
March 2, 2007 – February 28, 2008
Source: DTN Bid Analyzer
$4.97/bu on 2/28/08
Basis: $0.46/bu under
CBOT March 2008 Corn
Ness City, Kansas
Cash Corn Price
De Bondurant Grain Co., Ness City, Kansas
March 2, 2007 – February 28, 2008
Source: DTN Bid Analyzer
$5.30/bu on 2/28/08
Basis: $0.13/bu under
CBOT March 2008 Corn
December 2008 Corn Futures
CBOT: Jan 2006-February 2008
“2008 New Crop Corn Contract”
Contract Volume & Open Interest
Wakeeney, Kansas
New Crop Grain Sorghum Prices
Midwest Coop, Wakeeney, Kansas
March 2, 2007 – February 28, 2008
Source: DTN Bid Analyzer
$5.18/bu on 2/28/08
FC Basis: $0.47/bu under
CBOT DEC 2008 Corn
Scott City, Kansas
New Crop Corn Prices
Scott Coop Assn., Scott City, Kansas
March 2, 2007 – Feb. 28, 2008
Source: DTN Bid Analyzer
$5.51/bu on 2/28/08
FC Basis: $0.14/bu under
CBOT DEC 2008 Corn
U.S. Corn Supply-Demand
Planted Ac. (mln.)
Harvested Ac (mln.)
Yield (bu./ac.)
Beg. Stocks
Production
Total Supplies
Ethanol
Other Food, Seed, Indust.
Exports
Feed & Residual
Total Use
End Stocks (%S/U)
U.S. Ave. Farm $
2006/07
2007/08
2008/09
78.3
70.6
149.1
1,967
10,535
12,514
2,117
1,371
2,125
5,598
11,210
(12%) 1,304
$3.04
93.6
86.5
151.1
1,304
13,074
14,393
3,200
1,355
2,450
5,950
12,955
(11%) 1,438
$3.75-$4.25
90.0
82.7
154.9
1,438
12,810
14,263
4,100
1,370
2,150
5,400
13,020
(9.5%) 1,243
$4.60
Dynamics of U.S. Corn Usage
USDA
2006/07
Feed and Residual
Food, Seed, and Industrial
Ethanol for Fuel
Net Exports
Ending Stocks
Total Usage
11,210
Production
1 Assumes
2
USDA
2007/08 est. (Mln. Bu.)
5,598
5,9501 (+6%)
1,371
1,3552 (‫־‬1%)
2,117
3,200 (+51%)
2,125
2,450 (+15%)
1,304
1,438 (+10%)
12,995 (+16%)
10,535
13,074 (+24%)
DDGS retain 30% of the feed value of corn and are included in the feed and residual
category by the USDA.
Industrial, food, and seed less ethanol.
U.S. Grain Sorghum Supply-Demand
Planted Ac. (mln.)
Harvested Ac (mln.)
Yield (bu./ac.)
Beg. Stocks
Production
Total Supplies
Food, Seed, Indust.
Exports
Feed & Residual
Total Use
End Stocks (%S/U)
U.S. Ave. Farm $
2005/06
2006/07
2007/08
6.5
5.7
68.5
57
393
450
50
194
140
384
(17%) 66
$1.86
6.5
4.9
56.2
66
278
343
45
157
109
311
(10%) 32
$3.29
7.7
6.8
74.2
32
505
537
35
285
175
495
(9%) 42
$3.65-$4.15
U.S. Corn Planted Acreage
1973-2007 + Projected 2008
100.0
93.6
90.0
Million Acres
90.0
80.0
70.0
60.0
50.0
'73 '75 '77 '79 '81 '83 '85 '87 '89 '91 '93 '95 '97 '99 '01 '03 '05 '07 '09
Marketing Year
U.S. Corn Yields
1998-2007 + 2008 Trend Yield
180
160
Bushels / Acre
140
160
134
'98
134
137
138
'99
'00
'01
129
142
148
149
151
154.9
'05
'06
'07
'08
120
100
80
60
40
20
0
'02
'03
'04
Harvest Year
U.S. Corn Production
1973-2007 + Projected 2008
15.0
Billion Bushels
12.0
9.0
13.1
Record 2007 Corn Production
Projected 264 mln bu decrease in 2008
7.9
8.2
8.9
9.5
10.1
11.8
12.8
9.9
6.0
3.0
0.0
'73 '75 '77 '79 '81 '83 '85 '87 '89 '91 '93 '95 '97 '99 '01 '03 '05 '07
Marketing Year
U.S. Corn Food, Seed & Industrial Use
1973/74 thru 2007/08 Marketing Years
Projected 2008/09 Ethanol-related Corn Use: 4.1 bln bu.
6.0
Billion Bushels
5.0
4.0
3.0
2007/08 Ethanol-related Use of Corn = 3.2 billion bu.
25% of Total U.S. Corn Use
Estimated Bioenergy / Ethanol Use for 1973/74 - 2001/02
2.0
1.0
0.0
'73
'76
'79
'82
'85
'88
'91
'94
'97
'00
'03
Marketing Year
Other Food, Seed, Industrial Use
Ethanol
'06
U.S. Ethanol Industry at a Glance
2006





2008
Number of operating ethanol plants:
97
139 Under construction or expanding:
35
69
Announced plants:
300(17%) 100(?)
Current production capacity: (BGPY) 4.8
7.9
Projected production capacity:
11.7 BGPY end of 2008
13.5 BGPY end of 2009
Feedstock Use Proportion:
Corn
97%
Sorghum
2%
Other
1%
Corn Demand Increase
Due to Ethanol Development
Corn
Price
DCorn
DCorn w. Ethanol
Corn
Quantity
Short Run Ethanol Effect on Prices
Corn
Price
DCorn
DCorn w. Ethanol
Short Run Supply
(2007-08 Corn Crop & Stocks)
PSR
P0
Q 2007-08
Corn
Quantity
Ethanol vs RBOB Prices
April 2007 – February 2008 (Source: DTN)
Ethanol Plant Profitability
February 2007 – January 2008 (Source: DTN)
Long Run Effect of Ethanol
on Corn-Feedgrain Prices
Corn
Price
DCorn
DCorn w. Ethanol
SSht Run
Long Run Supply
(2008-2012 Corn Supplies)
PSR
PLR
Q07 Q2008-2012
Corn
Quantity
U.S. Corn Exports
1973/74 thru 2007/08 Marketing Years + Projected 2008/09
3.5
325 Million Bu Increase (15%) in 2007/08 over 2006/07
Billion Bushels
3.0
2.5
2.40
2.37
2.23
?
2.45
2.15 2.15
2.0
1.5
1.0
0.5
0.0
'73 '75 '77 '79 '81 '83 '85 '87 '89 '91 '93 '95 '97 '99 '01 '03 '05 '07 '09
Marketing Year
Total U.S. Corn Use
1973/74 thru 2007/08 Marketing Years
15.0
Total Use Over Trend in 2007/08
Due to Ethanol, Exports, etc.
Billion Bushels
12.0
9.4
9.0
6.0
7.6
5.9
6.2
7.2
13.0 13.0
9.3
9.8
11.3
10.7
8.1
3.0
0.0
'73 '75 '77 '79 '81 '83 '85 '87 '89 '91 '93 '95 '97 '99 '01 '03 '05 '07 '09
Marketing Year
World Coarse Grain Supply-Demand
2005/06 thru 2007/08 Marketing Years
Million Metric Tons
1500
World Coarse Grain S-D driven by
U.S. Feedgrain S-D Trends:
1200
977 982
1052
1062
992 1010
900
Record World Corn Exports,…
Lowest Ending Stocks in 30 Yrs
600
300
107 115 120
164 137 126
Exports
Ending Stocks
0
Production
'2005/06 Mktg Yr
Use
'2006/07 Mktg Yr
'2007/08 Mktg Yr
Production of World Coarse Grain
Exporters
2005/06 thru 2007/08 Marketing Years
400
Major Increase in U.S. Coarse Grain Production
Million Metric Tons
350
300
250
200
150
Record '07
Canada Corn
Crop
100
50
0
U.S.
Argentina Australia
'2005/06 Mktg Yr
Canada
Brazil
'2006/07 Mktg Yr
China
FSU-12
'2007/08 Mktg Yr
Exports of World Coarse Grain Exporters
2005/06 thru 2007/08 Marketing Years
80
U.S. is the only major Supplier with marked
increase in Exports in 2007/08 Mktg Year
Million Metric Tons
70
60
50
Limited prospects for other Coarse Grain Exporters
40
30
1.15 mmt MORE
Canada Coarse
Grain Exports
20
4.37 mmt LESS
China Coarse
Grain Exports
10
0
U.S.
Argentina Australia
'2005/06 Mktg Yr
Canada
Brazil
'2006/07 Mktg Yr
China
FSU-12
'2007/08 Mktg Yr
World Corn Supply & Demand

Global production up
9% from 2006/07.
Use up 7%
750
Million MT
700
650
600

Production will be 5.37
MMT (212 mil. Bu.)
less than Usage
550
500
450
400
350

World Ending Stocks
to decrease 5.37 MMT
from last year, down
to 13 % of Usage.
300
250
200
80 982 984 986 988 990 992 994 996 998 000 002 004 006 008
9
1
1
1
1
1
1
1
1
1
1
2
2
2
2
2
9 / 81 / 83 / 85 / 87 / 89 / 91 / 93 / 95 / 97 / 99 / 01 / 03 / 05 / 07 /
7
19 19 19 19 19 19 19 19 19 19 19 20 20 20 20
Production
Consumption
U.S. Corn Ending Stocks
Corn Ending Stocks as a % of Usage
72
66
62
2007/08 Ending Stocks:
1.438 Billion Bu.
11% Stocks/Use
% Stocks to Use
55
49
48
'08/09
Est.
23
24
27
23
27
25
19 20
17
87
11
11
5
10
20
11 9
1211
9.5
0
'73 '75 '77 '79 '81 '83 '85 '87 '89 '91 '93 '95 '97 '99 '01 '03 '05 '07 '09
Marketing Year
U.S. Corn Stocks/Use% vs Price
2008/09 Projection
% Stocks/Use
60.00
2007/08 Record High:
$3.75 - $4.25 / bu
@ 11% Stocks/Use
50.00
40.00
$3.12
$5.00
$4.60
$4.50
$4.00
$4.00
$3.50
$3.21
$3.24
$3.04
$3.02
30.00
$2.42
20.00
$3.00
$2.50
$2.00
$2.00
10.00
$1.50
0.00
$1.00
'73 '75 '77 '79 '81 '83 '85 '87 '89 '91 '93 '95 '97 '99 '01 '03 '05 '07 '09
Marketing Year
Stocks/Use%
U.S. Corn Price
U.S. Corn $
70.00
Wheat
Markets
Current Wheat Market Factors

World wheat stocks at a 30 year low

Global shortage of quality milling wheat


Weak U.S. dollar & Lower Ocean Freight Rates Helping
U.S. wheat exports



Wheat export regulations in Argentina & Russia
Attracting speculative interest to U.S. commodity markets
U.S. wheat acreage & production concerns in ’08


Strong support for U.S. Hard Red Spring Wheat prices
HRS vs soybeans in upper Great Plains; HRW production
Need for greater 2008 U.S. / World wheat production
in to rebuild stocks.
MAY 2008 HRW Wheat Futures
KCBT: February 2007-March 2008
“2008 MAY Old Crop HRW Contract”
Contract Volume & Open Interest
Ness City, Kansas
Cash Wheat Prices
De Bondurant Grain Co., Ness City, Kansas
March 1, 2007 – Feb. 28, 2008
Source: DTN Bid Analyzer
$11.55 /bu on 2/28/08
Basis: $0.80/bu under
KC March 2008 Wheat
July 2008 HRW Wheat Futures
KCBT: April 2006-February 2008
“2008 JULY New Crop HRW Contract”
Contract Volume & Open Interest
Scott City, Kansas
New Crop Wheat Prices
Scott Coop Assn., Scott City, Kansas
March 1, 2007 – February 28, 2008
Source: DTN Bid Analyzer
$10.71 /bu on 2/28/08
FC Basis: $0.60 /bu under
July 2008 KC Wheat
March 2008 Hard Red Spring Wheat
MGE: April 2006-February 2008
“2008 MARCH Old Crop HRS Contract”
Contract Volume & Open Interest
U.S. Wheat Supply-Demand
2006/07
Planted Ac. (mln.)
Harvested Ac (mln.)
Yield (bu./ac.)
Beg. Stocks
Production
Total Supplies
Food, Seed & Ind.
Exports
Feed & Residual
Total Use
End Stocks (%S/U)
U.S. Ave. Farm $
2007/08
2008/09
57.3
60.4
46.8
51.0
38.7
40.5
571
456
1,812
2,067
2,505
2,613
1,014
1,031
909
1,200
125
110
2,049
2,341
(22.3%) 456 (11.6%) 272
$4.26 $6.45-$6.85
64.0
54.4
42.8
272
2,330
2,702
1,039
950
175
2,164
(24.9%) 538
$7.00
U.S. Wheat Planted Acreage
1973-2007 + Projected 2008
Kansas HRW Acres Seeded down by 500K in 2007/08
125
U.S. Wheat Seedings Up 4%;
but lower than expected 2007/08 HRW Wheat seedings (-1%);
(SRW up 21%, HRS up 13% to 17.4 mln acres)
57
60
.4
64
62
75
75
77
88
80
Million Acres
100
50
25
'73 '75 '77 '79 '81 '83 '85 '87 '89 '91 '93 '95 '97 '99 '01 '03 '05 '07 '09
Marketing Year
U.S. Wheat Yields
1973-2007 + 2008 Trend Yield
60
U.S. Trend Wheat Yields for 2008/09: 42.8 bu / ac
Bushels / Acre
50
42.8
40
30
20
10
0
'89
'91
'93
'95
'97
'99
'01
Harvest Year
'03
'05
'07
'09
U.S. Wheat Production
1973-2007 + Projected 2008
4.0
Projected increase in U.S. Wheat Production in 2008/09
(More U.S. Wheat Acres x Trend Yields)
2.8
Billion Bushels
3.0
2.6
2.7
2.2
2.0
2.6
2.4
2.3
2.1 2.1
1.0
0.0
'73 '75 '77 '79 '81 '83 '85 '87 '89 '91 '93 '95 '97 '99 '01 '03 '05 '07 '09
Marketing Year
U.S. Wheat Exports
1973/74 thru 2007/08 + Projected 2008/09
2.5
Billion Bushels
2.0
1.5
Strong Pace for U.S. Wheat Exports for 2007/08
Export declines expected in March-May 2008
1.77
1.59
1.42
1.38
1.35
1.24
1.09
1.0
'08/09
Forecast
1.16
1.2
0.95
0.5
0.0
'73 '75 '77 '79 '81 '83 '85 '87 '89 '91 '93 '95 '97 '99 '01 '03 '05 '07 '09
Marketing Year
World Wheat Supply-Demand
2005/06 thru 2007/08 Marketing Years
800
Million Metric Tons
621
600
593 604
"Some" Price Rationing of
Wheat Export Purchases
624 616 619
30 year low for
World Wheat Ending Stocks
(since 1977/78)
400
200
116 111 106
148 125
110
Exports
Ending Stocks
0
Production
'2005/06 Mktg Yr
Use
'2006/07 Mktg Yr
'2007/08 Mktg Yr
Production of World Wheat Exporters
2005/06 thru 2007/08 Marketing Years
Million Metric Tons
150
Unchanged-Declining 2007/08 Wheat Production
for World's Major Wheat Exporters
120
FSU-12 production gains
90
60
30
0
EU-27
U.S.
'2005/06 Mktg Yr
Canada
Australia Argentina
'2006/07 Mktg Yr
FSU-12
'2007/08 Mktg Yr
Exports of World Wheat Exporters
2005/06 thru 2007/08 Marketing Years
35
U.S. & FSU 12 Only Major Exporters
to increase Sales in 2007/08
Million Metric Tons
30
25
20
15
10
5
0
EU-27
U.S.
'2005/06 Mktg Yr
Canada
Australia Argentina
'2006/07 Mktg Yr
FSU-12
'2007/08 Mktg Yr
U.S. Wheat Ending Stocks
Wheat Ending Stocks as a % of Usage
100
60 Year Low U.S. Wheat Ending Stocks
12% Stocks/Use @ 272 mln bu
% Stocks to Use
80
Forecast
60
40
20 17
20
20 19
16
27
25
12
0
'73 '75 '77 '79 '81 '83 '85 '87 '89 '91 '93 '95 '97 '99 '01 '03 '05 '07 '09
Marketing Year
U.S. Wheat Stocks/Use% vs Price
125
Record 2007/08 U.S. Wheat Price:
$6.45 - $6.85 /bu @ 12% Stocks/Use
$7.00
$7.00
$6.65
100
$6.00
$5.00
$4.50
75
$3.99
$3.72
$3.56
$4.26
$4.00
$3.42
50
$3.00
$2.00
25
$1.00
0
$0.00
'73 '75 '77 '79 '81 '83 '85 '87 '89 '91 '93 '95 '97 '99 '01 '03 '05 '07 '09
Marketing Year
U.S. Wheat Ending Stocks to Use %
U.S. Wheat Price
U.S. Wheat $
% Stocks/Use
$8.00
Forecast
Impact of Scarce U.S. & World
Wheat Supplies on Prices
Wheat
Price
DWheat
SShort Supply
SMedium Supply
SLarge Supply
PSS
PMS
Marketing Loan$
PLS
QSS
QMS
QLS
Wheat
Quantity
Soybean
&
Oilseed
Markets
Current Oilseed Market Factors

Brazilian soybean area up only 1%


High soymeal-soyoil prices & exports


Attracting speculative interest to U.S. commodity markets
Critically low U.S. carryover


High soyoil prices damaging U.S. soydiesel industry
Weak U.S. dollar & lower ocean freight rates
helping soybean exports


Recent South American rains helping soybean crop
Only 19 days inventory on hand at end of 2007/08
Need for U.S. acreage & production increase in
2008 to rebuild stocks
March 2008 Soybean Futures
CBOT: December 2006-March 2008
“2008 MAY Old Crop Soybean Contract”
Contract Volume & Open Interest
Ness City, Kansas Cash Soybean $s
De Bondurant Grain Co., Ness City, Kansas
March 1, 2007 – Feb. 28, 2008
Source: DTN Bid Analyzer
$13.65 /bu on 2/28/08
Basis: $1.34/bu under
CBOT March 2008 Soybeans
November 2008 Soybean Futures
CBOT: January 2006-February 2008
“2008 NOV New Crop Soybean Contract”
Contract Volume & Open Interest
Scott City, Kansas
New Crop Soybean Prices
Scott Coop Assn., Scott City, Kansas
March 1, 2007 – Feb. 28, 2008
Source: DTN Bid Analyzer
$13.14 /bu on 2/28/08
FC Basis: $1.25/bu under
CBOT NOV 2008 Soybeans
U.S. Soybean Supply-Demand
2006/07
Planted Ac. (mln.)
Harvested Ac (mln.)
Yield (bu./ac.)
Beg. Stocks
Production
Total Supplies
Crushings
Exports
Seed & Residual
Total Use
End Stocks (%S/U)
U.S. Ave. Farm $
2007/08
2008/09
75.5
63.6
74.6
62.8
42.7
41.2
449
574
3,188
2,585
3,647
3,165
1,806
1,835
1,118
1,005
148
165
3,073
3,005
(19%) 574
(5.3%) 160
$6.43 $10.00-$10.80
71.0
70.1
42.1
160
2,950
3,116
1,860
910
177
2,947
(5.7%) 169
$11.50
U.S. Soybean Planted Acreage
1973-2007 + Projected 2008 Acreage
100
Recovery in U.S. Soybean Acres Expected for 2008/09
Million Acres
75
74.3
71.4 70.9
75.5
71
63.6
50
25
0
'73 '75 '77 '79 '81 '83 '85 '87 '89 '91 '93 '95 '97 '99 '01 '03 '05 '07 '09
Marketing Year
U.S. Soybean Yields
1973-2007 + 2008 Trend Yield
60
U.S. Trend Soybean Yield for 2008/09: 42.1 bu/acre
Bushels / Acre
50
40
32
31
29
30 28
34
37
38
41
39
40
43 41 42.1
20
10
0
'73 '75 '77 '79 '81 '83 '85 '87 '89 '91 '93 '95 '97 '99 '01 '03 '05 '07 '09
Harvest Year
U.S. Soybean Production
1973-2007 + Projected 2008
4.0
Higher U.S. Soybean Production Expected for 2008/09
3.1 3.2
Billion Bushels
3.0
2.3
2.0
1.5
2.5
2.2
2.7
2.9
2.95
2.6
2.1
1.8
1.0
0.0
'73 '75 '77 '79 '81 '83 '85 '87 '89 '91 '93 '95 '97 '99 '01 '03 '05 '07 '09
Marketing Year
U.S. Soybean Exports
1973/74 thru 2007/08 Marketing Years
Million Bushels
1600
U.S. Soybean exports maintaining (weak dollar, lower ocean freight)
Exports to slow when Brazil & Argentina crops available.
1200
875
800
539
929
838
804
1064 1103 1118
1005
973
910
622
400
0
'73 '75 '77 '79 '81 '83 '85 '87 '89 '91 '93 '95 '97 '99 '01 '03 '05 '07 '09
Marketing Year
World Soybean Supply-Demand
2005/06 thru 2007/08 Marketing Years
Million Metric Tons
300
250
220
236
220
215 225
200
236
Decreasing World Production
Increasing Use & Exports
Declining Ending Stocks
150
100
76
64 71
50
53 62 46
0
Production
'2005/06 Mktg Yr
Use
Exports
'2006/07 Mktg Yr
Ending Stocks
'2007/08 Mktg Yr
Production of World Soybean Exporters
2005/06 thru 2007/08 Marketing Years
Million Metric Tons
100.00
Brazil 2007/08 Acres up 3.9% to 21.5 mln hectares
(500K hectares less than expected)
80.00
60.00
40.00
20.00
0.00
U.S.
'2005/06 Mktg Yr
Brazil
'2006/07 Mktg Yr
Argentina
'2007/08 Mktg Yr
Exports of World Soybean Exporters
2005/06 thru 2007/08 Marketing Years
Million Metric Tons
40
Not as large an increase in Brazilian soybean production as expected has
diminished Export prospects & pushed World Soybean $Prices higher
30
Record Prospects for
Argentina Soy Exports
20
10
0
U.S.
'2005/06 Mktg Yr
Brazil
'2006/07 Mktg Yr
Argentina
'2007/08 Mktg Yr
U.S. Soybean Ending Stocks
Soybean Ending Stocks as a % of Usage
40
% Stocks to Use
Sharp Reduction in 2007/08 Soybean Stocks (160 mb, 5.3% S/U),
i.e., 19 days inventory: lowest since 2003/04 (112 mln bu)
30
19
16
20
10
7
10
10
Forecast
8
6
8
9
76
9
4
56
0
'73 '75 '77 '79 '81 '83 '85 '87 '89 '91 '93 '95 '97 '99 '01 '03 '05 '07 '09
Marketing Year
U.S. Soybean Stocks/Use% vs Price
35
30
$14.00
Forecast
$11.50
Record U.S. Soybean Price: $10.00 - $10.80 /bu
$12.00
% Stocks/Use
$10.40
25
$10.00
$7.57
20
$6.64
$7.83
$7.42
$7.35
$7.34
$8.00
$6.81
$6.43
15
$6.00
10
$4.00
5
$2.00
0
$0.00
'73 '75 '77 '79 '81
'83 '85 '87 '89 '91 '93 '95 '97 '99
'01 '03 '05 '07 '09
Marketing Year
Stocks/Use%
U.S. Soybean Price
Impact of Scarce U.S. & World
Soybean Supplies on Prices
Soybean
Price
DSoybeans
SShort Supply
SMedium Supply
SLarge Supply
PSS
PMS
Marketing Loan$
PLS
QSS
QMS
QLS
Soybean
Quantity
Long Run
Grain
Market
Perspectives
Crop Acres Coming Out of CRP
2007–2017 (Source: USDA, FSA)
1.75
1.4
1.25
1.3
1.1
1.0
0.9 1.0
1.00
0.9
0.8 0.8
0.75
0.5
0.50
0.4
0.25
2017
2016
2015
2014
2013
2012
2011
2010
2009
2008
0.00
2007
Million Acres
1.50
1
Prices
Corn
Soybeans
Wheat
SB/Corn
Wheat/Corn
SB/Wheat
1Prices
and Price Ratios
05/06
$2.00
5.66
3.42
06/07
$3.04
6.43
4.26
07/08
$4.00
10.40
6.65
2.8
1.7
1.7
2.1
1.4
1.5
2.6
1.7
1.6
are actual and USDA projected average farm prices.
Long Run Grain Prices
Wheat
Corn
Grain Sorghum
Soybeans
Sunflowers
1 National
2000-06
Average
$3.35
$2.24
$2.20
$5.66
$11.57
USDA
2007/08
$6.45 - $6.85
$3.70 - $4.30
$3.60 - $4.20
$9.90 - $10.90
$19.60 - $21.20
marketing year average price per unit, 2000-2006.
Long Run
Projection
$4.50 - $5.50
$3.50 - $4.50
$3.40 - $4.40
$7.50 - $8.50
$15 - $17
Questions???
K-State Extension Agricultural Economics:
www.AgManager.info