Grain Market Outlook November 12 & 13, 2013 Crop Insurance ... · Grain Market Outlook Crop...

Grain Market OutlookCrop Insurance Workshop

November 12 & 13, 2013

Stephen R. KoontzColorado State University 1

Grain Market Outlook

Stephen R. KoontzProfessor & extension economist

Department of Agricultural & Resource Economics

Colorado State University

Stephen.Koontz@ColoState.Edu

http://webdoc.agsci.colostate.edu/koontz

Crop Insurance Workshops – CO & NE

November, 2013

DEC 2013 Corn Contract

DEC 2013 Corn @ $4.26¼/bu..

DEC 2013 Corn @ $6.40/bu..

Price Forecasts & 90% Confidence Intervals

Commodity 2013/14 2014/15

Corn $5.00/bu.$4.40‐$6.00

$4.25/bu.$3.50‐$5.25

Soybeans $13.00/bu.$11.00‐$16.25

$11.00/bu.$10.00‐$15.00

Wheat $7.00/bu.$6.50‐$8.00

$7.25/bu.$6.25‐$8.75

Grain Market OutlookCrop Insurance Workshop

November 12 & 13, 2013

Stephen R. KoontzColorado State University 2

Cumulative Rainfall - Year

Grain Market OutlookCrop Insurance Workshop

November 12 & 13, 2013

Stephen R. KoontzColorado State University 3

Cumulative Rainfall – 90 Days

Cumulative Rainfall – 60 Days

Outline

• Weather

• Feed Markets: Corn & Forage

• Wheat

• Soybeans

• Inputs & Land Values

• Short‐term & Long‐term Price Outlook

• Management Strategies

Grain Market OutlookCrop Insurance Workshop

November 12 & 13, 2013

Stephen R. KoontzColorado State University 4

Grain Market OutlookCrop Insurance Workshop

November 12 & 13, 2013

Stephen R. KoontzColorado State University 5

Grain Market OutlookCrop Insurance Workshop

November 12 & 13, 2013

Stephen R. KoontzColorado State University 6

Weekly Corn Contract

The trading range for corn was $3.50-$6.00/bu. Except…

$8.00

$5.00

Grain Market OutlookCrop Insurance Workshop

November 12 & 13, 2013

Stephen R. KoontzColorado State University 7

Grain Market OutlookCrop Insurance Workshop

November 12 & 13, 2013

Stephen R. KoontzColorado State University 8

Grain Market OutlookCrop Insurance Workshop

November 12 & 13, 2013

Stephen R. KoontzColorado State University 9

Weekly Crude Oil Contract

$150

$35

$80-$105

Grain Market OutlookCrop Insurance Workshop

November 12 & 13, 2013

Stephen R. KoontzColorado State University 10

Weekly Gasoline Contract

Weekly Ethanol Contract

Grain Market OutlookCrop Insurance Workshop

November 12 & 13, 2013

Stephen R. KoontzColorado State University 11

Grain Market OutlookCrop Insurance Workshop

November 12 & 13, 2013

Stephen R. KoontzColorado State University 12

Grain Market OutlookCrop Insurance Workshop

November 12 & 13, 2013

Stephen R. KoontzColorado State University 13

DEC 2013 Corn Contract

DEC 2013 Corn @ $4.26¼/bu.

Grain Market OutlookCrop Insurance Workshop

November 12 & 13, 2013

Stephen R. KoontzColorado State University 14

Grain Market OutlookCrop Insurance Workshop

November 12 & 13, 2013

Stephen R. KoontzColorado State University 15

DEC 2014 Corn Contract

Forecast $3.50-5.25/bu.…

Corn Outlook

• Current corn market priced like 2010‐12 never happened.

• Acreage next year?  Rotation or fallow?  Leverage, debt & recent purchases?

• Structural change for livestock?

• Price outlook – $4.75‐$5.50/bu. for 13/14.  14/15 @ $3.25‐$5.25/bu.

Weekly KC Wheat Contract

Grain Market OutlookCrop Insurance Workshop

November 12 & 13, 2013

Stephen R. KoontzColorado State University 16

Grain Market OutlookCrop Insurance Workshop

November 12 & 13, 2013

Stephen R. KoontzColorado State University 17

Grain Market OutlookCrop Insurance Workshop

November 12 & 13, 2013

Stephen R. KoontzColorado State University 18

Grain Market OutlookCrop Insurance Workshop

November 12 & 13, 2013

Stephen R. KoontzColorado State University 19

Grain Market OutlookCrop Insurance Workshop

November 12 & 13, 2013

Stephen R. KoontzColorado State University 20

Grain Market OutlookCrop Insurance Workshop

November 12 & 13, 2013

Stephen R. KoontzColorado State University 21

JUL 2014 KC Wheat Contract

Forecast $6.25-8.75/bu.

Grain Market OutlookCrop Insurance Workshop

November 12 & 13, 2013

Stephen R. KoontzColorado State University 22

Wheat Outlook

• Four years of tighter U.S. & world stocks.

• Uncertainty about U.S. & world crop.

• Likely expansions in U.S. acreage.

• Strong demand.

• Good prices & strong basis – mainly upside potential.

• Forecasts

– JUL 2014 @ $7.25 with range $6.25‐8.75/bu.

Weekly Soybean Contract

Weekly Soybean Meal Contract

Grain Market OutlookCrop Insurance Workshop

November 12 & 13, 2013

Stephen R. KoontzColorado State University 23

Grain Market OutlookCrop Insurance Workshop

November 12 & 13, 2013

Stephen R. KoontzColorado State University 24

Grain Market OutlookCrop Insurance Workshop

November 12 & 13, 2013

Stephen R. KoontzColorado State University 25

Grain Market OutlookCrop Insurance Workshop

November 12 & 13, 2013

Stephen R. KoontzColorado State University 26

Grain Market OutlookCrop Insurance Workshop

November 12 & 13, 2013

Stephen R. KoontzColorado State University 27

Grain Market OutlookCrop Insurance Workshop

November 12 & 13, 2013

Stephen R. KoontzColorado State University 28

NOV 2013 Soybean Contract

Grain Market OutlookCrop Insurance Workshop

November 12 & 13, 2013

Stephen R. KoontzColorado State University 29

NOV 2014 Soybean Contract

Oilseeds Outlook

• World production & consumption of oilseeds grows.

• Foreign production & trade of oilseeds grows.

• Stocks remain tight.

• Potential for much volatility.

• How many acres in 2014?

• $11.75/bu. soybeans.  And volatility with the most downside risk…

• $10.00/bu. and $325/T are potential lows.

Grain Market OutlookCrop Insurance Workshop

November 12 & 13, 2013

Stephen R. KoontzColorado State University 30

Outlook Summary

• Corn: $4.40‐6.00/bu. for 2013/14 & $3.50‐$5.25/bu. for 2014/15.

• Hay: $200/T through winter.

• Wheat: $6.50‐$8.00/bu. for 2013/14 & $6.25‐$8.75/bu. for  2014/15.

• Soybeans: $11.00‐$16.25/bu. for 2013/14 & $10.00‐$15.00/bu. for 2014/15.

Contact and Link Information

Stephen.Koontz@ColoState.Edu

http://webdoc.agsci.colostate.edu/koontz/