Download - Corn Outlook
Extension and Outreach/Department of Economics
Corn Outlook
Midwest, Great Plains, & Western Outlook ConferenceLouisville, Kentucky
August 16, 2011
Chad HartAssistant Professor/Grain Markets Specialist
Extension and Outreach/Department of Economics
U.S. Corn Supply and Use2008 2009 2010 2011
Area Planted (mil. acres) 86.0 86.4 88.2 92.3
Yield (bu./acre) 153.9 164.7 152.8 153.0
Production (mil. bu.) 12,092 13,092 12,447 12,914
Beg. Stocks (mil. bu.) 1,624 1,673 1,708 940
Imports (mil. bu.) 14 8 30 20
Total Supply (mil. bu.) 13,729 14,774 14,185 13,874
Feed & Residual (mil. bu.) 5,182 5,140 5,000 4,900
Ethanol (mil. bu.) 3,709 4,568 5,020 5,100
Food, Seed, & Other (mil. bu.) 1,316 1,371 1,400 1,410
Exports (mil. bu.) 1,849 1,987 1,825 1,750
Total Use (mil. bu.) 12,056 13,066 13,245 13,160
Ending Stocks (mil. bu.) 1,673 1,708 940 714
Season-Average Price ($/bu.) 4.06 3.55 5.25 6.70
Extension and Outreach/Department of Economics
Corn Area
Source: USDA-NASS
Extension and Outreach/Department of Economics
Crop Conditions
Source: USDA-NASS
60
61
62
63
64
65
66
67
68
69
70
% G
ood t
o E
xcelle
nt
Corn Soybeans
Extension and Outreach/Department of Economics
Crop Conditions & Corn Yields
80
90
100
110
120
130
140
150
160
170
Bu
she
ls p
er
acr
e
Actual Yield Projected Yield 20-yr Trend
Extension and Outreach/Department of Economics
Examining the Relationship
0.45
0.50
0.55
0.60
0.65
24 25 26 27 28 29 30 31 32 33 34 35 36
Week
Yie
ld p
er
Gto
E P
oin
t
0.80
0.85
0.90
0.95
1.00
R-s
qu
are
% Good to Excellent R-square
Extension and Outreach/Department of Economics
Preliminary Corn Yields
Source: USDA-NASS
Extension and Outreach/Department of Economics
Corn Production
Source: USDA-NASS
Extension and Outreach/Department of Economics
World Corn Production
Source: USDA
Extension and Outreach/Department of Economics
0.4
0.5
0.6
0.7
0.8
0.9
1.0
1.1
1.2
1.3
1.4
Jan-03
Jan-04
Jan-05
Jan-06
Jan-07
Jan-08
Jan-09
Jan-10
Jan-11
Canada Mexico Brazil EU China South KoreaJapan Australia
Exchange Rates (Jan. 2003 = 1)
Source: USDA, ERS
Extension and Outreach/Department of Economics
Corn Export Markets
Source: USDA, FAS
Unknown4%
Other23%
China2%
Taiwan6% South Korea
13%
Egypt7% Mexico
15%
Japan30%
Extension and Outreach/Department of Economics
Corn Export Shifts
Source: USDA, FAS
Japan Mexico
Taiwan
Egypt
Unknown
Other
South Korea
Total
China
-200
-150
-100
-50
0
50
100
Mill
ion b
ush
els
-6.9%-15.3%
-21.7%
-13.1%
3.1%
145.5%
-2.4%
-7.8%
-35.8%
Extension and Outreach/Department of Economics
Corn Advance Export Sales
Source: USDA, FAS
0
100
200
300
400
500
600
700
12/3
0
1/1
3
1/2
7
2/1
0
2/2
4
3/1
0
3/2
4
4/7
4/2
1
5/5
5/1
9
6/2
6/1
6
6/3
0
7/1
4
7/2
8
8/1
1
8/2
5
Mill
ion b
ush
els
2011 Crop 2010 Crop
Extension and Outreach/Department of Economics
Corn Advance Export Sales
Source: USDA, FAS
Unknown37%
Other11%
Japan16%
Mexico23%
Egypt0%
South Korea5%
Taiwan1%
China7%
Extension and Outreach/Department of Economics
Nearby Futures (Jan. 3, 2011 = 1)
0.90
1.00
1.10
1.20
1.30
1.40
1.501
/3/2
01
1
1/1
7/2
011
1/3
1/2
011
2/1
4/2
011
2/2
8/2
011
3/1
4/2
011
3/2
8/2
011
4/1
1/2
011
4/2
5/2
011
5/9
/20
11
5/2
3/2
011
6/6
/20
11
6/2
0/2
011
7/4
/20
11
7/1
8/2
011
8/1
/20
11
8/1
5/2
011
Corn Ethanol Gasoline
Extension and Outreach/Department of Economics
Ethanol Margin
Source: CARD
Extension and Outreach/Department of Economics
-0.04
-0.02
0.00
0.02
0.04
0.06
0.08
0.10
0.12
0.14
0.16
1/3
/20
07
4/3
/20
07
7/3
/20
07
10
/3/2
007
1/3
/20
08
4/3
/20
08
7/3
/20
08
10
/3/2
008
1/3
/20
09
4/3
/20
09
7/3
/20
09
10
/3/2
009
1/3
/20
10
4/3
/20
10
7/3
/20
10
10
/3/2
010
1/3
/20
11
4/3
/20
11
7/3
/20
11
$ p
er
ga
llon
Ethanol Blending Advantage
Extension and Outreach/Department of Economics
Corn Grind for Ethanol
86
88
90
92
94
96
98
100
Sep-10
Oct-10
Nov-10
Dec-10
Jan-11
Feb-11
Mar-11
Apr-11
May-11
Jun-11
Jul-11
Aug-11
Mill
ion
bush
els
Extension and Outreach/Department of Economics
Ethanol Stocks
650
700
750
800
850
900
Sep-10
Oct-10
Nov-10
Dec-10
Jan-11
Feb-11
Mar-11
Apr-11
May-11
Jun-11
Jul-11
Aug-11
Mill
ion
gallo
ns
Extension and Outreach/Department of Economics
Projected 2011 Season-Average Corn Price
3.50
4.00
4.50
5.00
5.50
6.00
6.50
7.00
12
/14
/200
9
2/1
4/2
010
4/1
4/2
010
6/1
4/2
010
8/1
4/2
010
10
/14
/201
0
12
/14
/201
0
2/1
4/2
011
4/1
4/2
011
6/1
4/2
011
8/1
4/2
011
$ p
er
bu
she
l
Futures USDA
Extension and Outreach/Department of Economics
Projected 2011 Season-Average Corn Price
5.50
6.00
6.50
7.00
$ p
er
bu
she
l
Futures USDA
Extension and Outreach/Department of Economics
Projected 2012 Season-Average Corn Price
4.50
5.00
5.50
6.00
6.50
$ p
er
bu
she
l
Futures USDA
Extension and Outreach/Department of Economics
Corn Prices vs. Costs
1.00
1.50
2.00
2.50
3.00
3.50
4.00
4.50
5.00
5.50
6.00
6.50
7.00$ p
er
Bu
she
l
Season-average Price Cost per Bushel
Extension and Outreach/Department of Economics
Input Costs
Source: USDA, Agricultural Prices, July 29, 2011
Extension and Outreach/Department of Economics
Iowa Cash Rents
Source: USDA-NASS
80
100
120
140
160
180
200
Ca
sh R
en
t ($
pe
r a
cre
)
Extension and Outreach/Department of Economics
Thoughts for 2011 and BeyondGeneral economic conditions
Continued worldwide economic recovery is a major key for crop pricesDebt limit, US credit ratingUS job recovery, European financial concerns, Chinese inflation
Supply/demand concernsPrevented planting, flooding, heat wave, nighttime temps?Biofuel growth and energy demandWill supply be able to keep pace with demand?
2010/11: USDA Corn $5.25
2011/12: USDA Corn $6.70 Futures (as of 8/15/2011) Corn $6.95
2012/13: Futures (as of 8/15/2011) Corn $6.27
Extension and Outreach/Department of Economics
Thank you for your time!
Any questions?
My web site:http://www.econ.iastate.edu/~chart/
Iowa Farm Outlook:http://www.econ.iastate.edu/ifo/
Ag Decision Maker:http://www.extension.iastate.edu/agdm/