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Economic Research Service
USDA Grains & Oilseeds OutlookAgricultural Outlook Forum 2012
Edward W. AllenU.S. Department of AgricultureEconomic Research Service
Economic Research Service
U.S. Producer Prices Are High
Monthly Prices Recieved
23456789
1011121314
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
U.S. $/bushel
Soybean
Wheat
Corn
Source: NASS, USDA
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More Acres Going to Corn and Wheat in 2012
280276
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Corn Price To Slip More Than Soy
2000 2002 2004 2006 2008 20102012
1
6
11
Season Average Price Recieved
U.S. $/bushel
Soybean
Wheat
Corn
Source: NASS, USDA
Economic Research Service
Key Drivers of USDA Projections
• Expanding U.S. and world area and production
• U.S. corn yield recovers after 2 years below trend • U.S. corn use for ethanol declines slightly • China’s import demand uncertain.
• South America’s 2011/12 problems support U.S. 2012/13 demand prospects.
• Record World wheat supplies overhang the market.
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World Corn Production and Consumption
600
650
700
750
800
850
2002/03 2005/06 2008/09 2011/12Year
Million tonnes
Production
Consumption
Source: USDA
Economic Research Service
U.S. Corn Area Up, Yields Fall For 2 Years
50000
55000
60000
65000
70000
75000
80000
85000
90000
1990/91 1993/94 1996/97 1999/00 2002/03 2005/06 2008/09 2011/12
1000 acres
100
125
150
175
200
bushels/acreCorn area harvested (left axis) Yield (right axis)
Source: NASS, USDA
Economic Research Service
World Corn Area Expanding
100
125
150
175
1981/1982 1986/1987 1991/1992 1996/1997 2001/2002 2006/2007 2011/2012
Year
Million hectares
World Corn Area Harvested
Source: USDA
Economic Research Service
0
5
10
15
20
25
2
2.2
2.4
2.6
2.8
3
3.2
3.4
3.6
3.8
Production (left axis) Area (right axis)
Argentina: Corn Production Stagnates
Million tonsMillion hectares
Source: USDA
Economic Research Service
0
5
10
15
20
25
0.5
1
1.5
2
2.5
3
3.5
4
Production (left axis) Area (right axis)
Ukraine: Corn Production Skyrockets
Million tons Million hectares
Source: USDA
Economic Research Service
U.S. Corn Yield Trend
100
120
140
160
180
Bushels/acreYield -1 STE Trd 90-10 +1 STE
Source: NASS, USDA
Economic Research Service
0
1
2
3
4
5
1990/91 1997/98 2004/05 2011/12
Crop year
U.S. Ethanol: Corn Use to Decline Slightly
Billion bushels
Source: USDA
Economic Research Service
Economic Research Service
Ethanol and RBOB Nearby Futures Prices
Note: Ethanol prices based on CBOT nearby futures. RBOB (Reformulated Gasoline Blend Stock) based on NYME nearby futures.
Reformulate Gasoline Blend Stock (RBOB)
Ethanol
$0.852/16/12
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Weekly Ethanol Stocks
Source: DOE-Energy Information Administration, Weekly Petroleum Status Report.
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Ethanol Producer Net Returns Above Variable Costs / Spot prices
Note: USDA-WAOB estimates based on USDA-AMS plant reports and DOE-EIA estimates and forecasts for natural gas and electricity prices.
+ 86 cents / gal. (11/23/11)
- 14 cents / gal. (2/17/12)
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U.S. Blended Gasoline Consumption
Source: DOE-Energy Information Administration, Short-term Energy Outlook (STEO) and Annual Energy Outlook (AEO).
7.6 bil. gal.
7.4 bil. gal.
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China’s Soybean Import Growth Leads World
Soybean Imports
Corn Imports
0
10
20
30
40
50
60
1997/98 1999/00 2001/02 2003/04 2005/06 2007/08 2009/10 2011/12
Million tonnes
Economic Research ServiceSource: USDA
Economic Research Service
0
20
40
60
80
100
120
Corn Soymeal Swine meat
China: Data Issues Increase Uncertainty, Corn and Soymeal Feed and Residual Use Do Not
Track Well With Swine Production
Million tonnes
Soybean Meal
Source: USDA
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China’s High Corn Prices Support Imports
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U.S. Soybean Production Takes a Backseat, Drought Hits Brazil and Argentina in 2011/12
30
40
50
60
70
80
90
100
110
120
130
Million tonnes
U.S.
Argentina and Brazil
Source: USDA
Economic Research Service
Brazil: Double Cropping to Boost Corn Area With Soybeans
9,000
11,000
13,000
15,000
17,000
19,000
21,000
23,000
25,000
1990 1993 1996 1999 2002 2005 2008 2011
Corn Soybeans
1000 hectares
Harvested area
Harvested area
Source: USDA
Economic Research Service
South American October 1, Soybean Beginning Stocks
0
10
20
30
40
50
60Million Tonnes
-8 million tons
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World Wheat Production and Consumption
500
550
600
650
700
1995/96 1997/98 1999/00 2001/02 2003/04 2005/06 2007/08 2009/10 2011/12
Million tonnes
ProductionConsumption
Source: USDA
Economic Research Service
Record World Wheat Stocks
0
50
100
150
200
250
Mill
ion
tonn
es
Rest of the World
United States
China
Source: USDA
Economic Research Service
Russia’s Wheat Yields Highly Variable
1
1.5
2
2.5
3
3.5
1987/88 1989/90 1991/92 1993/94 1995/96 1997/98 1999/00 2001/02 2003/04 2005/06 2007/08 2009/10 2011/12
Tonnes per hectare
Russia CV=.181United States CV= .096
Source: USDA
Economic Research Service
Key Developments To Watch
• Soybean and corn crops currently growing in South America,
• Prices and weather ahead of U.S. spring planting,
• China’s soybean and corn import growth,
• Gas prices, gasoline consumption, and ethanol margins,
• Global macro-economic growth,
• U.S. dollar.
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