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Implications of USDA Grain Stocks and Prospective Plantings Reports for Corn and Soybean Prices
1www.farmdocDaily.illinois.edu
Implications of USDA Grain Stocks and Prospective Plantings Reports for Corn and Soybean Prices
Scott Irwin, Darrel Good, and Todd Hubbssirwin@Illinois.edu / d-good@Illinois.eduDepartment of Agricultural and Consumer EconomicsUniversity of Illinois
Presentation Materials
Visit the ‘Downloads’ page at www.farmdoc.illinois.edu/webinars
– PDF of slides available soon– Video available tomorrow
QuestionsPlease submit questions during the presentation
6,068
6,859 6,954
7,694
6,523
6,023
5,400
7,008
7,750 7,822
8,616
5,000
5,500
6,000
6,500
7,000
7,500
8,000
8,500
9,000
2007- 2008- 2009- 2010- 2011- 2012- 2013- 2014- 2015- 2016- 2017-
mil.
bu.
Avg. Guess = 8,534 mbuSource: Reuters Mar 27, 2017
Figure 1. March 1 Corn Stocks
47
-217
-45
185
-178-142
386
-98
136
7
82
-300
-200
-100
0
100
200
300
400
500
2007- 2008- 2009- 2010- 2011- 2012- 2013- 2014- 2015- 2016- 2017-
mil.
bu
Figure 2. USDA March 1 Corn Stocks Estimate Minus Average Guess
Implications of USDA Grain Stocks and Prospective Plantings Reports for Corn and Soybean Prices
2www.farmdocDaily.illinois.edu
3,3293,147
3,771 3,670 3,6153,776
1,191 1,168 1,2301,610 1,505
???
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
2011-12 2012-13 2013-14 2014-15 2015-16 2016-17
mil.
bu.
1st half 2nd half
Figure 3. First Half and Second Half MY Feed and Residual Use of Corn
y = -0.4035x - 71.076R² = 0.0909
‐500
‐400
‐300
‐200
‐100
0
100
200
‐500 ‐400 ‐300 ‐200 ‐100 0 100 200 300 400 500
March 1 Stocks Surprise (mil. bu.)
Figure 4. Relationship Between March 1 Corn Stocks Surprise and Change in WASDE Feed and Residual Estimates from March to Final, 1991-2015
Cha
nge
in W
ASD
E Fe
ed a
nd R
esid
ual
(mil.
bu.
)
Rate of First Half Disappearance Implied 16/17 MY Feed and Residual Use
64%Observed During 1996/97-2005/06
5,900
68%Observed During 2006/07-2009/10
5,552
74%Observed During 2010/11-2013/14
5,103
70%Observed During 2014/15-2015/16
5,394
USDA 16/17 Projection 5,550 mbu
Figure 5. Projections for 2015/16 Marketing Year Feed and Residual Use of Corn Figure 6.
Corn
Balance
2016/17 2016/17 WASDE Mar 9
Supply: Planted Acreage (million acres) 94.0 94.0 Harvested Acreage (million acres) 86.7 86.7 Yield (Bushels / Acre) 174.6 174.6Beginning Stocks (million bushels) 1,737 1,737Total Production (million bushels) 15,148 15,148 Imports (million bushels) 55 55
Total Supply (million bushels) 16,940 16,940 Consumption: Feed and Residual (million bushels) 5,550 5,475Food, Seed, and Industrial (million bushels) 6,845 6,845Ethanol (million bushels) 5,400 5,400
Exports (million bushels) 2,225 2,225Total Consumption (million bushels) 14,620 14,545Ending Stocks (million bushels) 2,320 2,395Ending Stocks/Total Consumption (%) 15.9% 16.5%Average Price ($/bu.) $3.40 $3.40
Implications of USDA Grain Stocks and Prospective Plantings Reports for Corn and Soybean Prices
3www.farmdocDaily.illinois.edu
1,787
1,434
1,302 1,270 1,249
1,375
998 994
1,327
1,531
1,735
700
900
1,100
1,300
1,500
1,700
1,900
2007- 2008- 2009- 2010- 2011- 2012- 2013- 2014- 2015- 2016- 2017-
mil.
bu.
Avg. Guess = 1,684 mbuSource: Reuters Mar 27, 2017
Figure 7. March 1 Soybean Stocks
-17
76
-20
63
-46
11
64
4
-12-25
51
-60
-40
-20
0
20
40
60
80
100
2007- 2008- 2009- 2010- 2011- 2012- 2013- 2014- 2015- 2016- 2017-
mil.
bu
Figure 8. USDA March 1 Soybean Stocks Estimate Minus Average Guess
190.1158.2
201.1230.0
179.6158.1
-99.2
-52.7
-94.6 -84.6-52.5 ???
-150
-100
-50
0
50
100
150
200
250
300
2011-12 2012-13 2013-14 2014-15 2015-16 2016-17
mil.
bu.
First Half (Sep-Feb)Second Half (Mar-Aug)
Figure 9. First Half and Second Half Seed and Residual Use of Soybeans Figure 10.
Soybean
Balance
2016/17WASDE Mar 9 2016/17
Supply:Planted Acreage (mil.) 83.4 83.4Harvested Acreage (mil.) 82.7 82.7Yield (bu./ac.) 52.1 52.1
Production (mil. bu.) 4,307 4,307Beginning stocks (mil. bu.) 197 197Imports (mil. bu.) 25 25
Total Supply(mil. bu.) 4,528 4,528Consumption:
Crush (mil. bu.) 1,940 1,940Export (mil. bu.) 2,025 2,025 Seed and Residual (mil. bu.) 128 128
Total Consumption(mil. bu.) 4,093 4,093 Ending stocks (mil. bu.) 435 435 Stocks-to-use 10.6% 10.6% Average farm price ($/bu.) $9.60 $9.60
Implications of USDA Grain Stocks and Prospective Plantings Reports for Corn and Soybean Prices
4www.farmdocDaily.illinois.edu
Figure 11.
2017 Principal Crops Planted Area (000) Acres and Change from Previous Year
Crop 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Principal Crops 325.6 319.0 315.4 314.3 324.3 324.9 326.4 318.9 319.2 316.9*
CRP 34.6 33.7 31.2 31.2 29.7 27.0 25.6 24.2 23.9 23.4
Prevent Plant 1.7 4.2 6.9 9.6 1.2 8.3 4.4 6.7 3.4 2.5**
Total 361.9 356.9 353.5 355.1 355.2 360.2 356.4 349.8 346.5 342.8
* March Planting Intentions** Projected
Figure 12. Acreage Summary for Principal Crops, CRP, and PP (Million Acres)
89,996
60,000
65,000
70,000
75,000
80,000
85,000
90,000
95,000
100,000
thou
sand
s
Planted
Harvested
Avg. Guess = 90,969 thousand acresSource: Reuters Mar 27, 2017
Corn Acres Lower Than Trade Guess
Figure 13. Planted and Harvested Acreage of CornFigure 14.
90.0 Mil. Acres of Corn to be Planted in U.S.in 2017 Down 4.0 Mil. Acres from 2016 (-4.0%)
2017 Corn Planted Area (000) Acres and Change from Previous Year
Implications of USDA Grain Stocks and Prospective Plantings Reports for Corn and Soybean Prices
5www.farmdocDaily.illinois.edu
-616 -833
1,670
-991
-153-419
1,925
366 308
3,073
-32
1,396
-606-242
1,427
-1,917
-1,094-1,180
403
-3,500
-2,500
-1,500
-500
500
1,500
2,500
3,500
thou
sand
acr
es
Actual acreage always differs from March intentions.Which way in 2017? Down? Depends on weather and price.
Figure 15. Actual Planted Acres of Corn Minus March Intentions
89,482
50,000
55,000
60,000
65,000
70,000
75,000
80,000
85,000
90,000
95,000
thou
sand
s Planted
Harvested
Avg. Guess = 88,214 thousand acresSource: Reuters Mar 27, 2017
Soybean Acres Higher Than Trade Guess
Figure 16. Planted and Harvested Acreage of Soybeans
Figure 17.
89.5 Mil. Acres of Soybeans to be Planted in U.S. in 2017 Up 6.0 Million Acres from 2016 (+7.0%)
2017 Soybean Planted Area (000) Acres and Change from Previous Year
25625
-605
-2,582
997
222
-203
-1,878-1,373
-2,399
9251,427
-394
-1,563
3,296
-286
1,783
-1,985
1,462
-3,500
-2,500
-1,500
-500
500
1,500
2,500
3,500
4,500
thou
sand
acr
es
Actual acreage always differs from March intention Which way in 2017? Up? Depends on weather and price.
Figure 18. Actual Planted Acres of Soybeans Minus March Intentions
Implications of USDA Grain Stocks and Prospective Plantings Reports for Corn and Soybean Prices
6www.farmdocDaily.illinois.edu
7,57
6
6,89
9
7,11
1
6,93
4
9,56
4
7,65
9
7,29
8
6,66
2 7,68
9
7,00
7
7,41
2
6,89
2
6,74
6
8,05
7
9,92
6
7,91
4
7,46
1
7,26
6
7,25
6
0
2,000
4,000
6,000
8,000
10,000
thou
sand
acr
es
Figure 19. Planted Minus Harvested Acres of Corn
y = 1.8409x + 59.95R² = 0.8983
020406080
100120140160180200
bu. p
er a
c.
2017 Trend Yield168.7 bpa
Figure 20: U.S. Average Corn Yield
Figure 21.
Corn
Balance
USDA OutlookForum
2017/18 2017/18Supply: Planted Acreage (million acres) 90.0 90.0 Harvested Acreage (million acres) 82.4 82.5 Yield (Bushels / Acre) 170.7 168.7
Total Production(million bushels) 14,065 13,918 Beginning Stocks(million bushels) 2,320 2,395 Imports (million bushels) 50 50
Total Supply (million bushels) 16,435 16,363 Consumption:
Feed and Residual (million bushels) 5,450 5,500 Food, Seed, and Industrial (million bushels) 6,870 6,895
Ethanol (million bushels) 5,400 5,425 Exports (million bushels) 1,900 1,900
Total Consumption (million bushels) 14,220 14,295 Ending Stocks (million bushels) 2,215 2,068 Ending Stocks/Total Consumption (%) 15.6% 14.5% Average Price ($/bu.) $3.50 $3.60
1,584
1,284
1,858
1,100
1,466
964
1,250
781920
595
1,037 1,079 1,0881,270
1,054
587685
918
651
0
500
1,000
1,500
2,000
2,500
3,000
thou
sand
acr
es
Figure 22. Planted Minus Harvested Acres of Soybeans
Implications of USDA Grain Stocks and Prospective Plantings Reports for Corn and Soybean Prices
7www.farmdocDaily.illinois.edu
y = 0.4219x + 21.443R² = 0.8863
0
10
20
30
40
50
60
bu. p
er ac.
2017 Trend Yield46.1 bpa
Figure 23. U.S. Average Soybean Yield
y = 0.0037x2 + 0.2063x + 23.563R² = 0.9012
0
10
20
30
40
50
60
bu. p
er ac.
2017 Trend Yield48.2 bpa
Figure 24. U.S. Average Soybean Yield
Figure 24.
Soybean
Balance
USDA Outlook Forum
2017/18 2017/18Supply:Planted Acreage (mil.) 88.0 89.5 Harvested Acreage (mil.) 87.1 88.7 Yield (bu./ac.) 48.0 48.2
Production (mil. bu.) 4,180 4,275 Beginning stocks (mil. bu.) 420 435Imports (mil. bu.) 25 25
Total Supply (mil. bu.) 4,625 4,735 Consumption:
Crush (mil. bu.) 1,945 1,945 Export (mil. bu.) 2,125 2,125 Seed and feed (mil. bu.) 135 135
Total Consumption(mil. bu.) 4,205 4,205 Ending stocks (mil. bu.) 420 530 Stocks-to-use 10.0% 12.6% Average farm price ($/bu.) $9.60 $8.95
Closing Comments• March 1 Stocks Report Showed:
– March 1 corn and soybean stocks larger than expected– Forecast of feed and residual use of corn lowered 75 million bushels
• U.S. Farmers intend to plant:– 4 million fewer corn acres, 3.4 million fewer winter wheat acres and 900K fewer sorghum acres
– 6 million more soybean acres, 2 million more cotton acres, and 156,000 more acres of other oilseeds
• Balance Sheet Implications– Expect a smaller corn crop and larger soybean crop in 2017– Expect corn stocks to decline modestly and soybean stocks to become surplus
– Unchanged to higher corn prices and lower soybean prices in MY 2017/18
Implications of USDA Grain Stocks and Prospective Plantings Reports for Corn and Soybean Prices
8www.farmdocDaily.illinois.edu
Questions?
Please continue to submit questions during this part of the webinar
Scott Irwin Darrel Good Todd Hubbs sirwin@Illinois.edu d‐good@Illinois.edu jhubbs3@Illinois.edu
Visit the ‘Downloads’ page at www.farmdoc.illinois.edu/webinars
@ScottIrwinUI
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