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

[email protected]


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


Corn Area

Source: USDA-NASS


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


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


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


Preliminary Corn Yields

Source: USDA-NASS


Corn Production

Source: USDA-NASS


World Corn Production

Source: USDA


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


Corn Export Markets

Source: USDA, FAS

Unknown4%

Other23%

China2%

Taiwan6% South Korea

13%

Egypt7% Mexico

15%

Japan30%


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%


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


Corn Advance Export Sales

Source: USDA, FAS

Unknown37%

Other11%

Japan16%

Mexico23%

Egypt0%

South Korea5%

Taiwan1%

China7%


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


Ethanol Margin

Source: CARD


-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


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


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


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



5.50

6.00

6.50

7.00

$ p

er

bu

she

l

Futures USDA



4.50

5.00

5.50

6.00

6.50

$ p

er

bu

she

l

Futures USDA


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


Input Costs

Source: USDA, Agricultural Prices, July 29, 2011


Iowa Cash Rents

Source: USDA-NASS

80

100

120

140

160

180

200

Ca

sh R

en

t ($

pe

r a

cre

)


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


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/

Documents

Corn Outlook