View
219
Download
0
Category
Tags:
Preview:
Citation preview
Grain, Oilseed, and Biofuel Outlook
Chad Hart
Center for Agricultural and Rural Development
Iowa State UniversityE-mail: chart@iastate.edu
January 18, 2008
Pro Ag Outlook
Harlan, Iowa
Nearby Corn Futures
2.00
2.50
3.00
3.50
4.00
4.50
5.00
5.50
9/1/
2006
11/1
/200
6
1/1/
2007
3/1/
2007
5/1/
2007
7/1/
2007
9/1/
2007
11/1
/200
7
1/1/
2008
$ pe
r B
ushe
l
Corn Futures As Of 1/16/2008
4.80
5.00
5.20
5.40$
per
Bus
hel
Corn Market Factors
Domestic demand changes•Livestock feed•Biofuels
South American plantings•Export competition
Competition for acreage•Corn vs. soybeans vs. wheat
Tighter stocks•More sensitivity to weather shocks
U.S. Corn Supply and Demand2006/07 estimate
2007/08 forecast
Change from last month
Change from last year
Planted area (million acres) 78.3 93.6 0.0 19.5Harvested area (million acres) 70.6 86.5 0.5 22.5Yield (bushels per acre) 149.1 151.1 -1.2 1.3
Beginning stocks 1,967 1,304 0.0 -33.7Production 10,535 13,074 -0.7 24.1
Total supply 12,514 14,393 -0.6 15.0Feed and residual 5,598 5,950 5.3 6.3Food, seed, and industrial 3,488 4,555 -0.8 30.6
Ethanol 2,117 3,200 0.0 51.2Domestic use 9,086 10,505 2.6 15.6Exports 2,125 2,450 0.0 15.3
Total use 11,210 12,955 2.1 15.6Ending stocks 1,304 1,438 -20.0 10.3
Stocks/use 11.6 11.1
Average market price 3.04 3.70/4.30 10.4/8.9 21.7/41.4
Million bushels
Percent
Dollars per bushel
Percent
Source: USDA
Corn for Grain Yields 2007Bushels and Change From Previous Year
797
18515 168#
22
180#15
142-14
97-48
9513
13018
165-5
17512
155-2
1715
14025 129
-17
165#25
103-39
124-23
146-15
150#40
1424
145-1
1608
125-4
175-10
127-2
100-32
1165
150-9
14540
195#15
1286
100-10
U.S. 151.12.0
# Record High
NC = No Change
12124
106-19
148#27
148-9 85
-35
210#NC
111-9
135-8
129NC
Source: USDA
U.S. Corn Stocks
10.3
0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
16.0
98-99 99-00 00-0l 0l-02 02-03 03-04 04-05 05-06 06-07 07-08
Billion Bushels
Beginning Supply Dec Mar Jun SepSource: USDA
Corn Utilization
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
96/97 98/99 00/01 02/03 04/05 06/07
Mil
lion
Bus
hels
Feed Ethanol Other Exports
Exchange Rates
0.80
0.85
0.90
0.95
1.00
1.05
Jan-07 Mar-07 May-07 Jul-07 Sep-07 Nov-07
Canada Mexico Brazil Argentina RussiaIndia China South Korea Japan EU
Exchange Rate Futures
0.80
0.85
0.90
0.95
1.00
1.05
Jan-08 Mar-08 May-08 Jul-08 Sep-08 Nov-08
Canada Mexico Brazil Russia South Korea Japan EU
World Corn ProductionCountry or
Region 2007/08 2006/07 ChangePercent Change
Million tons PercentWorld 766.7 703.9 62.9 8.9EU-27 47.4 54.7 -7.3 -13.3FSU-12 13.5 12.8 0.7 5.3South Africa 10.0 7.3 2.7 37.0Argentina 22.5 22.5 0.0 0.0Brazil 50.0 51.0 -1.0 -2.0China 145.0 145.5 -0.5 -0.3United States 332.1 267.6 64.5 24.1
Source: USDA
South American Corn Area
0
5
10
15
20
25
30
35
40
1992/1993 1995/1996 1998/1999 2001/2002 2004/2005 2007/2008
Mil
lion
Acr
es
Argentina Brazil
WMO data indicate that temperatures were not high enough to cause significant widespread damage to corn advancing through the tasseling and silking stages.
Source: USDA
Temperatures in Argentina
Corn Production Costs - NationalCorn
Item 2005 2006 2007F 2008F 2009FOperating costs: Seed 40.47 43.55 48.93 50.02 51.21 Fertilizer 69.35 80.17 93.96 99.95 102.34 Chemicals 22.84 23.62 24.67 25.64 26.40 Custom operations 9.97 10.58 10.93 11.27 11.59 Fuel, lube, and electricity 26.50 28.73 30.98 32.98 34.56 Repairs 14.00 14.45 14.86 15.22 15.60 Other variable expenses 0.12 0.12 0.12 0.13 0.13 Interest on operating capital 3.12 4.76 5.16 4.94 5.81 Total, operating costs 186.37 205.98 229.61 240.15 247.64
Allocated overhead: Hired labor 2.08 2.19 2.22 2.27 2.33 Unpaid labor 22.02 23.56 23.86 24.45 25.02 Capital recovery 64.02 66.71 69.99 73.12 75.56 Land 93.27 90.84 95.44 97.78 100.67 Taxes and insurance 6.51 7.01 7.39 7.51 7.63 General farm overhead 12.61 13.45 13.83 14.17 14.52 Total, allocated costs 200.51 203.76 212.73 219.30 225.73
Total costs listed 386.88 409.74 442.34 459.45 473.37
Source: USDA-ERS
Basis in 2006
Basis in 2007
Basis in 2008
Nearby Soybean Futures
5
6
7
8
9
10
11
12
13
149/
1/20
06
11/1
/200
6
1/1/
2007
3/1/
2007
5/1/
2007
7/1/
2007
9/1/
2007
11/1
/200
7
1/1/
2008
$ pe
r B
ushe
l
Soybean Futures As Of 1/16/2008
11.50
12.00
12.50
13.00
13.50$
per
Bus
hel
Soybean Market Factors
Domestic demand changes•Livestock feed•Biofuels
South American plantings•Export competition
Competition for acreage•Corn vs. soybeans vs. wheat
Tighter stocks•More sensitivity to weather shocks
U.S. Soybean Supply and Demand2006/07 estimate
2007/08 forecast
Change from last month
Change from last year
Planted area (million acres) 75.5 63.6 -0.1 -15.7Harvested area (million acres) 74.6 62.8 0.0 -15.8Yield (bushels per acre) 42.7 41.2 -0.4 -3.7
Beginning stocks 449 574 0.2 27.7Production 3,188 2,585 -0.3 -18.9Imports 9.0 6.0 0.0 -33.6
Total Supply 3,647 3,165 -0.3 -13.2Crush 1,806 1,830 0.0 1.3Seed and Residual 148 165 1.1 11.3
Domestic use 1,955 1,995 0.1 2.1Exports 1,118 995 0.0 -11.0
Total Use 3,073 2,990 0.1 -2.7Ending stocks 574 175 -5.4 -69.5
Stocks/use ratio 18.7 5.9
Average market price 6.43 9.90/10.90 7.0/6.3 54.0/69.5
Percent
Million bushels
Percent
Dollars per bushel
Source: USDA
Soybean Yields 2007Bushels and Change From Previous Year
211
361
24-7
24-3
305
43-5
45-5
51.51
331 26
-18
42#7
27-7
39-6
41-3
40#14
37-1
50.50.5
31-4
38-8
21-11
354
47#NC
247
411
19-10
U.S. 41.2-1.5
# Record HighNC = No Change
42#8
18-21
37#13
27-4
33-9
39-5
#
Source: USDA
U.S. Soybean Stocks
2.33
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
98-99 99-00 00-0l 0l-02 02-03 03-04 04-05 05-06 06-07 07-08
Billion Bushels
Beginning Supply Dec Mar Jun Sep
Source: USDA
Soybean Meal Futures as of 1/16/2008
320
330
340
350
360$
per
Ton
Soybean Oil Futures as of 1/16/2008
52
53
54
55
56C
ents
per
Pou
nd
Exchange Rates
0.80
0.85
0.90
0.95
1.00
1.05
Jan-07 Mar-07 May-07 Jul-07 Sep-07 Nov-07
Canada Mexico Brazil Argentina RussiaIndia China South Korea Japan EU
World Soybean Production
Country or Region 2007/08 2006/07 Change
Percent Change
Million tons PercentWorld 220.3 235.6 -15.2 -6.5U.S. 70.4 86.8 -16.4 -18.9Argentina 47.0 47.2 -0.2 -0.4Brazil 60.5 59.0 1.5 2.5China 14.3 16.0 -1.7 -10.6Foreign 150.0 148.8 1.2 0.8
Source: USDA
South American Soybean Area
0
10
20
30
40
50
60
1992/1993 1995/1996 1998/1999 2001/2002 2004/2005 2007/2008
Mil
lion
Acr
es
Argentina Brazil
BrazilCrop Weather Summary
January 10, 2008
• Significant late start to the rainy season in most major soybean areas;
• Seasonal showers still sporadic in portions of the central interior (beans flowering – pod-filling);
• Near-normal precipitation in southern growing areas.
ErraticShowers
Normalrains
Favorable
Source: USDA
Precipitation in Brazil
Corn-Soybean Price Ratio
1.5
2.0
2.5
3.09/
1/20
06
11/1
/200
6
1/1/
2007
3/1/
2007
5/1/
2007
7/1/
2007
9/1/
2007
11/1
/200
7
1/1/
2008
Soybean Production Costs - National
Source: USDA-ERS
Soybeans Item 2005 2006 2007F 2008F 2009FOperating costs: Seed 32.62 34.06 38.27 39.12 40.05 Fertilizer 10.06 11.08 13.94 14.82 15.18 Chemicals 14.32 14.97 14.79 15.37 15.83 Custom operations 6.67 7.02 7.25 7.48 7.69 Fuel, lube, and electricity 13.62 15.75 16.98 18.08 18.95 Repairs 11.29 11.60 11.93 12.22 12.52 Other variable expenses 0.13 0.15 0.15 0.16 0.16 Interest on operating capital 1.50 2.23 2.37 2.24 2.64 Total, operating costs 90.21 96.86 105.68 109.49 113.02
Allocated overhead: Hired labor 2.03 2.12 2.15 2.20 2.25 Unpaid labor 16.77 16.81 17.02 17.44 17.85 Capital recovery 50.17 51.47 54.00 56.41 58.30 Land 86.68 88.25 92.72 94.99 97.80 Taxes and insurance 6.06 6.57 6.93 7.04 7.15 General farm overhead 12.47 12.54 12.90 13.21 13.54 Total, allocated costs 174.18 177.76 185.72 191.29 196.89
Total costs listed 264.39 274.62 291.40 300.78 309.91
2008 Winter Wheat PlantedAcres (000) and Change From Previous Year
17050
104 870
50
600100
2400-100
8023
185
480120
900150
1200200
550130
5015
9900-500 530
90
400165
25030
780220
705
40030
1200150
2700460
1950-10011
-6
343
480-10
12525
800#170
650185
1020200
5700-200
78030
18010
17010
U.S. 46,6101,623
# Record High& Record Low
1900-200
620200
6000-200
130&-5
28050
175030
124
330#40
130-10
Source: USDA
Price Summary2006/07 estimate
2007/08 forecast
(midpoint)Change from
last monthChange from
last year
Crops and productsWheat ($/bu) 4.26 6.65 3.9 56.1Rice ($/cwt) 9.74 11.15 0.0 14.5Corn ($/bu) 3.04 4.00 9.6 31.6Soybeans ($/bu) 6.43 10.40 6.7 61.7Soybean oil (¢/lb) 31.02 47.50 10.5 53.1Soybean meal ($/s.t.) 205.44 320.00 14.3 55.8Cotton (¢/lb) 46.50 51.50*
*Average price for August-November 2007. USDA is prohibited by law from publishing cotton price projections.
Percent
Source: USDA
Biofuel Factors
Feedstock costs and competition•High corn prices•High soybean oil prices•Vegetable oil demand in Southeast Asia
Energy markets•High oil and gas prices
Continued government support•Passage of the 2007 Energy Act•Efforts to extend biofuel tax credits
Consumer demand for biofuels•Southeast U.S.
Ethanol Expansion
Source: Renewable Fuels Association
0
1
2
3
4
5
6
7B
illi
on G
allo
ns
Biodiesel Growth
Source: National Biodiesel Board
0
50
100
150
200
250
300
350
400
450
500
1999 2000 2001 2002 2003 2004 2005 2006 2007
Mil
lion
Gal
lons
Renewable Fuels Standard
0
5
10
15
20
25
30
35
40B
illi
on G
allo
ns
RFS by Fuel
0
5
10
15
20
25
30
35
40B
illi
on G
allo
ns
Corn-based Ethanol Cellulosic BiofuelsBiodiesel Additional Advanced Biofuels
Current ethanol capacity: 137 plants, 7.63 billion gallons/year
Total capacity under construction and expansion: 5.74 billion gallons/year
63 new ethanol plants and 7 expansion projects underway
U.S. Ethanol Industry
2.1 billion bushels of corn were used in producing fuel ethanol in 2006/2007 marketing year.
3.2-3.5 billion bushels of corn are expected to be used in producing fuel ethanol for 2007/2008 marketing year.
Oil Futures As Of 1/16/2008
82
83
84
85
86
87
88
89
90
91
92
Feb.2008
Dec.2008
Dec.2009
Dec.2010
Dec.2011
Dec.2012
Dec.2013
$ pe
r B
arre
l
Historical Ethanol Margins
0.00
0.50
1.00
1.50
2.00
2.50
3.00
3.50
4.00
4.50
3/21
/200
5
5/21
/200
5
7/21
/200
5
9/21
/200
5
11/2
1/20
05
1/21
/200
6
3/21
/200
6
5/21
/200
6
7/21
/200
6
9/21
/200
6
11/2
1/20
06
1/21
/200
7
3/21
/200
7
5/21
/200
7
7/21
/200
7
9/21
/200
7
11/2
1/20
07
$ pe
r G
allo
n
Ethanol Gross Margin Net Cost of Corn Cost of Nat. Gas
Projected Ethanol Margins
0.00
0.50
1.00
1.50
2.00
2.50
Feb-08
Apr-08
Jun-08
Aug-08
Oct-08
Dec-08
Feb-09
Apr-09
Jun-09
Aug-09
Oct-09
Dec-09
$ pe
r G
allo
n
Ethanol Gross Margin Net Cost of Corn Cost of Nat. Gas
Plant Location
Comparing Futures Prices
2.00
2.10
2.20
2.30
2.40
2.50$
per
Gal
lon
Ethanol Gasoline
A Quick Look at Ethanol Blending
January 2007 November 2007
Unleaded E-10 Unleaded E-10
($/gallon) ($/gallon)
Gasoline 1.490 1.341 2.520 2.268
Ethanol 0.226 0.208
Price before Taxes
1.490 1.567 2.520 2.476
Fed. Gas Tax 0.184 0.184 0.184 0.184
Ethanol Tax Credit
-0.051 -0.051
Price after Fed. Taxes
1.674 1.700 2.704 2.609
Gasoline and ethanol prices are monthly average rack prices for Omaha
Ethanol Usage - 2004 (latest available)
Blending Percentage
0%
1 - 25%
25 - 50%
50 - 75%
75 - 100%
RFS by Fuel
0
5
10
15
20
25
30
35
40B
illi
on G
allo
ns
Corn-based Ethanol Cellulosic BiofuelsBiodiesel Additional Advanced Biofuels
Current biodiesel capacity: 165 plants, 1.85 billion gallons/year
Total capacity under construction and expansion: 1.35 billion gallons/year
80 new plants underway
U.S. Biodiesel Industry
2.8 billion pounds of soybean oil was used in producing biodiesel in 2006/2007 marketing year.
3.8 billion pounds of soybean oil are expected to be used in producing biodiesel for 2007/2008 marketing year.
Biodiesel Growth
Source: National Biodiesel Board
0
50
100
150
200
250
300
350
400
450
500
1999 2000 2001 2002 2003 2004 2005 2006 2007
Mil
lion
Gal
lons
Biodiesel Internationally
EUBiofuel targets: 5.75% by 2010
10% by 2020
ArgentinaBiodiesel mandate: 5% by 2010
BrazilBiodiesel mandate: 2% in 2008
5% by 2010
Many U.S. producers have targeted the EU market
Biodiesel Price Ratios
0.9
1.0
1.1
1.2
1.3
1.4
1.5
1.6
1.7
Soybean Oil Biodiesel
Thanks for your time!
Any questions?
Recommended