webinar april 3 2017 implications of usda grain stocks and ......2017/04/03 · implications of...

Implications of USDA Grain Stocks and Prospective Plantings Reports for Corn and Soybean Prices

1www.farmdocDaily.illinois.edu


Scott Irwin, Darrel Good, and Todd [email protected] / [email protected] of Agricultural and Consumer EconomicsUniversity of Illinois

Presentation Materials

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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



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


5,552


5,103


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



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



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



-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



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



y = 0.4219x + 21.443R² = 0.8863

0

10

20

30

40

50

60

bu. p

er ac.


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.


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



Questions?

Please continue to submit questions during this part of the webinar

Scott Irwin Darrel Good Todd Hubbs [email protected] d‐[email protected] [email protected]

Visit the ‘Downloads’ page at www.farmdoc.illinois.edu/webinars

@ScottIrwinUI

webinar april 3 2017 implications of usda grain stocks and ......2017/04/03 · implications of...

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