Transcript WHEAT OUTLOOK Midwest Outlook Conference 2005

GRAIN OUTLOOK
Agricultural Lenders
Conference
2007
Mike Woolverton
Kansas State University
[email protected]
WHEAT
PRODUCTION PROJECTIONS,
MAJOR WHEAT EXPORTERS,
2006/07 - 2007/08 (MMT)





EU-27
United States
Canada
Australia
Argentina
Total World Prod.
Ending Stocks
2006/07
124.80
49.32
25.27
9.90
15.20
593.07
125.08
2007/08
121.83
57.53
20.30
21.00 (15.5)
14.00
606.24
112.36
Wheat Balance Sheet
Plant A. (mil.)
Harvest A. (mil.)
Bu./A.
Production
Imports
Carryover
Total Supply
Utilization:
Feed and Residual
Food
Seed
Exports
Total Utilization
Carryover
U.S. Farm Price
05-06
06-07
57.2
50.1
42.0
2,105
82
540
2,727
57.3
46.8
38.7
1,812
122
571
2,505
154
129
914
930
78
81
1,009
909
2,155
2,049
571 (26%) 456
$3.42
$4.26
07/08
60.5
52.1
40.6
2,114
85
456
2,655
170
940
83
1,100
2,293
(22%)
362 (16%)
$5.50-6.10
U.S. Wheat Planted Acreage
90.0
.
85.0
Million Acres
80.0
75.0
70.0
65.0
60.0
55.0
73 75 77 79 81 83 85 87 89 91 93 95 97 99 01 03 05 07
Harvest Year
Source: USDA
WASDE Report: 7.12.07
KSU Dept. of Ag Econ
www.agmanager.info
U.S Wheat Yields
Wheat Yield (Bu./Acre)
.
2007 Estimate
47.0
45.0
43.0
41.0
39.0
37.0
35.0
33.0
31.0
29.0
27.0
25.0
73 75
77 79 81 83 85 87 89 91 93 95 97KSU
99Dept.
01 03
05 Econ
07
Source: USDA
& KSU
of Ag
Year
WASDE Report: 7.12.07
www.agmanager.info
U.S. Wheat Production
Production (Billion Bu)
3.0
2007 Estimate
2.8
2.6
2.4
2.2
2.0
1.8
1.6
1.4
73 75 77 79 81 83 85 87 89 91 93 95 97 99 01 03 05 07
Year
Source: USDA
WASDE Report: 7.12.07
KSU Dept. of Ag Econ
www.agmanager.info
U.S. Wheat Exports
Exports (Billion Bu.)
.
2.0
1.8
1.6
1.4
2007 Estimate
1.2
1.0
0.8
73 75 77 79 81 83 85 87 89 91 93 95 97 99 01 03 05 07
Source: USDA
WASDE Report: 7.12.07
Year
KSU Dept. of Ag Econ
www.agmanager.info
Share of World Wheat Exports,
2007/08, USDA
U.S.
Canada
Australia
EU-27
Russia
Argentina
Kazak.
Ukraine
SOYBEANS
Soybean Balance Sheet
05-06
Plant A. (mil.)
Harvest A. (mil.)
Bu./A.
Production
Imports
Beginning Carryover
Total Supply
72.0
71.3
43.0
3,063
3
256
3,322
Utilization:
Crushings
Seed
Exports
Residual
Total Utilization
Ending Carryover
1,739
93
947
93
2,873
449 (16%)
U.S. Farm Price
$5.66
06-07
75.5
74.6
42.7
3,188
8
449
3,646
1,805
79
1,115
92
3,091
555
$6.40
07/08
64.1
63.3
41.4
2,619
6
555
3,180
1,825
85
975
79
2,964
(18%)
215 (7%)
$7.35-8.35
U.S. Average Soybean Price
Average Farm Price ($/Bu.)
.
$8.50
$8.00
$7.50
$7.00
$6.50
$6.00
$5.50
$5.00
$4.50
$4.00
73 75 77 79 81 83 85 87 89 91 93 95 97 99 01 03 05 07
Year
Source: USDA
7.12.07
KSU Dept. of Ag Econ
www.agmanager.info
U.S. Soybean Planted Acreage
.
80
75
Million Acres
70
65
60
55
50
45
73 75 77 79 81 83 85 87 89 91 93 95 97 99 01 03 05 07
Source: USDA
Harvest Year
KSU Dept. of Ag Econ
www.agmanager.info
Soybean Yield (Bu/Acre)
.
U.S. Soybean Yields
45
Actual Yield
Trend Yield
40
35
30
25
20
73 75 77 79 81 83 85 87 89 91 93 95 97 99 01 03 05 07
Source: USDA & KSU
WASDE Report: 7.12.07
Year
KSU Dept. of Ag Econ
www.agmanager.info
U.S. Soybean Exports
Exports (Billion Bu.)
,
1.2
1.1
1.0
0.9
0.8
0.7
0.6
0.5
0.4
0.3
73 75 77 79 81 83 85 87 89 91 93 95 97 99 01 03 05 07
Year
KSU Dept. of Ag Econ
Source: USDA
Share of World Soybean Exports,
2007/08, USDA
U.S.
Brazil
Argentina
CORN
Corn Balance Sheet
Plant A. (mil.)
Harvest A. (mil.)
Bu./A.
Production
Imports
Beginning Carryover
Total Supply
Utilization:
Feed and Residual
Food, seed, industrial
Ethanol for fuel
Exports
Total Utilization
Ending Carryover
U.S. Farm Price
05-06
06-07
81.8
75.1
148.0
11,114
9
2,114
13,237
78.3
70.6
149.1
10,535
10
1,967
12,512
6,141
2,981
1,603 (14%)
2,147
11,270
1,967 (17%)
$2.00
07/08
92.9
85.4
152.8
13,054
15
1,137
14,206
5,750
5,750
3,525
4,790
2,150 (20%)
3,400 (26%)
2,100
2,150
11,375
12,690
1,137 (10%) 1,516 (12%)
$3.00
$2.80-3.40
U.S. Corn Planted Acreage
100
.
95
Million Acres
90
85
80
75
70
65
60
40
45
50
55
60
65
Source: USDA Acreage Report: 6.29.07
70
75
80
Harvest Year
85
90
95
00
05
KSU Dept. of Ag Econ
www.agmanager.info
Production (Billion Bu.)
.
Total U.S. Corn Production
14
Assumes national average yield of 155.8 bu./A.
13
12
11
10
9
8
7
6
5
4
73 75 77 79 81 83 85 87 89 91 93 95 97 99 01 03 05 07
Source: USDA
Harvest Year
KSU Dept. of Ag Econ
Corn Used for Ethanol
4.0
Billion Bushels
3.5
3.0
2.5
2.0
1.5
1.0
0.5
0.0
Source: USDA
02
03
04
05
Harvest Year
06
07
KSU Dept. of Ag Econ
U.S. Total Corn Usage
.
14.0
13.0
12.0
Billion Bu.
11.0
10.0
9.0
8.0
7.0
6.0
5.0
Domestic Corn Usage
Trendline
4.0
73 75 77 79 81 83 85 87 89 91 93 95 97 99 01 03 05 07
Harvest Year
KSU Dept. of Ag Econ
Source: USDA
www.agmanager.info
Corn Usage Estimates (Millions of Bushels)
USDA/WASDE
2006/07
Feed and Residual
Food, Seed, and Industrial
Ethanol for Fuel
Net Exports
Ending Stocks
Total Usage
1
2
5,750
1,375
2,150
2,100
1,137
12,512
USDA/WASDE
2007/08 est.
5,7001 (-1%)
1,3902 (+1%)
3,400 (+58%)
2,000 (-5%)
1,502
13,992 (+12%)
Assumes 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. Corn Exports
2007 Estimate
.
Exports (Billion Bu.)
2.6
2.4
2.2
.
2.0
1.8
1.6
1.4
1.2
1.0
73 75 77 79 81 83 85 87 89 91 93 95 97 99 01 03 05 07
Source: USDA
Harvest Year
KSU Dept. of Ag Econ
www.agmanager.info
World Corn Production and Consumption

Global production
up 10% from
2006/07. Demand
up 6%.
750
Million MT
700
650
600

Production will be
4.5 MMT (176 mil.
Bu.) greater than
consumption.
550
500
450
400
350
300
Ending stocks
forecast to increase
slightly from last
year to 14 % of
usage.
250
200
19
79
19 /19
81 80
19 /19
83 82
19 /19
85 84
19 /198
87 6
19 /19
89 88
19 /19
91 90
19 /199
93 2
19 /19
95 94
19 /19
97 96
19 /19
99 98
20 /200
01 0
20 /20
03 02
20 /20
05 04
20 /20
07 06
/2
00
8

Production
Consumption
Share of World Corn Exports,
2007/08, USDA
U.S.
Argentina
Brazil
China
Ukraine
S. Africa
Land in Crops
(Millions of acres)
5 yr. Ave. 07/08USDA Proj. 08/09
Corn
Soybeans
Hay
Wheat
Cotton
Grain Sorghum
Principle Crops
CRP
79.6
74.2
62.4
59.5
14.1
8.1
322.0
92.9
64.1
61.8
60.5
11.1
7.8
320.1
35.9
88.2 (-5%)
68.9 (+7%)
61.8 (--)
62.6 (+2%)
10.0 (-11%)
7.4 (-5%)
321.1
34.9 (-3%)
Total crop land in the United States – 441.6 million acres
Crop Acres Coming Out of CRP,
2007–2017, Millions of Acres
Source: USDA, FSA
1.6
1.4
1.2
1
Out of CRP
Mil. A.
0.8
0.6
0.4
20
17
20
15
20
13
20
11
20
09
20
07
0.2
0
Land in CRP, Leading States, 2007
Millions of Acres
Source: USDA, FSA
4.5
4
3.5
3
2.5
2
1.5
1
0.5
0
Land In CRP
TX MT ND KS CO IA MN MO SD WA NE
IL
Grain Marketing Considerations



Wheat – Global shortage of quality milling
wheat, Australian production, and acres planted
N. Hemisphere.
Corn/G.S. – Strong demand from domestic
livestock and overseas buyers, ethanol
demand, and bid for acres.
Soybeans – national average yield, hectares in
Brazil and acres in the U.S., growing demand
for SBO for biodiesel.
Factors to Watch:
 Global S/D balances
 Battle for Acres
 Southern Hemisphere Crops
 Ethanol Price