2011 Crop Market Outlook Coleman Research Group Presentation Apr. 13, 2011 Chad Hart Assistant Professor/Grain Markets Specialist chart@iastate.edu 515-294-9911 1 1

U.S. Corn Supply and Use 2007 2008 2009 2010 Area Planted (mil. acres) 93.5 86.0 86.4 88.2 Yield (bu./acre) 150.7 153.9 164.7 152.8 Production (mil. bu.) 13,038 12,092 13,092 12,447 Beg. Stocks 1,304 1,624 1,673 1,708 Imports 20 14 8 Total Supply 14,362 13,729 14,774 14,175 Feed & Residual 5,913 5,182 5,140 5,150 Ethanol 3,049 3,709 4,568 5,000 Food, Seed, & Other 1,338 1,316 1,371 1,400 Exports 2,437 1,849 1,987 1,950 Total Use 12,737 12,056 13,066 13,500 Ending Stocks 675 Season-Average Price ($/bu.) 4.20 4.06 3.55 5.40 Source: USDA 2 2

U.S. Soybean Supply and Use 2007 2008 2009 2010 Area Planted (mil. acres) 64.7 75.7 77.5 77.4 Yield (bu./acre) 41.7 39.7 44.0 43.5 Production (mil. bu.) 2,677 2,967 3,359 3,329 Beg. Stocks 574 205 138 151 Imports 10 13 15 Total Supply 3,261 3,185 3,512 3,495 Crush 1,803 1,662 1,752 1,650 Seed & Residual 93 106 108 125 Exports 1,159 1,279 1,501 1,580 Total Use 3,056 3,047 3,361 3,355 Ending Stocks 140 Season-Average Price ($/bu.) 10.10 9.97 9.59 11.50 Source: USDA 3 3

U.S. Wheat Supply and Use 2007 2008 2009 2010 Area Planted (mil. acres) 60.5 63.2 59.2 53.6 Yield (bu./acre) 40.2 44.9 44.5 46.4 Production (mil. bu.) 2,051 2,499 2,218 2,208 Beg. Stocks 456 306 657 976 Imports 113 127 119 110 Total Supply 2,620 2,932 2,993 3,294 Food 948 927 917 930 Seed 88 78 69 80 Feed & Residual 16 255 150 170 Exports 1,263 1,015 881 1,275 Total Use 2,314 2,275 2,018 2,455 Ending Stocks 839 Season-Average Price ($/bu.) 6.48 6.78 4.87 5.60 Source: USDA 4 4

World Corn Production Source: USDA 5 5

World Soybean Production Source: USDA 6 6

World Wheat Production Source: USDA 7 7

Hog Crush Margin The Crush Margin is the return after the pig, corn and soybean meal costs. Carcass weight: 200 pounds Pig price: 50% of 5 mth out lean hog futures Corn: 10 bushels per pig Soybean meal: 150 pounds per pig Source: Shane Ellis, ISU Extension

Cattle Crush Margin The Crush Margin is the return after the feeder steer and corn costs. Live weight: 1250 pounds Feeder weight: 750 pounds Corn: 50 bushels per head Source: Shane Ellis, ISU Extension

Corn vs. Wheat (CME July 2011 futures)

Corn Export Sales Source: USDA, FAS

Corn Advance Export Sales Source: USDA, FAS

Soybean Export Sales Source: USDA, FAS

Soy Advance Export Sales Source: USDA, FAS

Wheat Export Sales Source: USDA, FAS

Wheat Advance Export Sales Source: USDA, FAS

Renewable Fuels Standard (RFS) Crop Year Billion Bushels 2009 4.11 2010 4.43 2011 4.64 2012 4.86 17 17

Ethanol Margins Source: ISU, CARD

Ethanol Blending Advantage

Fuel Prices 20 20

Nearby Futures (Jan. 3, 2011 = 1) 21 21

Projected 2010 Season-Average Corn Price

Projected 2010 Season-Average Soy Price

Projected ‘10 Season-Average Wheat Price

Principal Crop Area Source: USDA-NASS

2011 Intentions (mil. acres) Crop Shifts Crop 2010 Plantings (mil. acres) 2011 Intentions (mil. acres) % Change in Area Corn 88.2 92.2 +4.5 Wheat 53.6 58.0 +8.2 Soybeans 77.4 76.6 -1.0 Cotton 11.0 12.6 +14.5 Rice 3.6 3.0 -17.0 Hay 59.9 59.0 -1.5 Source: USDA-NASS

U.S. Corn Supply and Use 2008 2009 2010 2011 Area Planted (mil. acres) 86.0 86.4 88.2 92.2 Yield (bu./acre) 153.9 164.7 152.8 161.7 Production (mil. bu.) 12,092 13,092 12,447 13,537 Beg. Stocks 1,624 1,673 1,708 675 Imports 14 8 20 Total Supply 13,729 14,774 14,175 14,232 Feed & Residual 5,182 5,140 5,150 5,120 Ethanol 3,709 4,568 5,000 Food, Seed, & Other 1,316 1,371 1,400 1,440 Exports 1,849 1,987 1,950 2,000 Total Use 12,056 13,066 13,500 13,560 Ending Stocks 672 Season-Average Price ($/bu.) 4.06 3.55 5.40 ?.?? 27 27

U.S. Soybean Supply and Use 2008 2009 2010 2011 Area Planted (mil. acres) 75.7 77.5 77.4 76.6 Yield (bu./acre) 39.7 44.0 43.5 43.4 Production (mil. bu.) 2,967 3,359 3,329 3,268 Beg. Stocks 205 138 151 140 Imports 13 15 Total Supply 3,185 3,512 3,495 3,423 Crush 1,662 1,752 1,650 Seed & Residual 106 108 125 115 Exports 1,279 1,501 1,580 1,575 Total Use 3,047 3,361 3,355 3,340 Ending Stocks 83 Season-Average Price ($/bu.) 9.97 9.59 11.50 ??.?? 28 28

U.S. Wheat Supply and Use 2008 2009 2010 2011 Area Planted (mil. acres) 63.2 59.2 53.6 58.0 Yield (bu./acre) 44.9 44.5 46.4 43.8 Production (mil. bu.) 2,499 2,218 2,208 2,170 Beg. Stocks 306 657 976 839 Imports 127 119 110 81 Total Supply 2,932 2,993 3,294 3,090 Food 927 917 930 Seed 78 69 80 Feed & Residual 255 150 170 Exports 1,015 881 1,275 1,150 Total Use 2,275 2,018 2,455 2,330 Ending Stocks 760 Season-Average Price ($/bu.) 6.78 4.87 5.60 ?.?? 29 29

Weather Concerns 30 30

Planting Forecast Temperature Precipitation Source: NWS-CPC 31 31

Projected 2011 Season-Average Corn Price

Projected 2011 Season-Average Soy Price

Projected ‘11 Season-Average Wheat Price

Thoughts for 2011 and Beyond General economic conditions Continued worldwide economic recovery is a major key for crop prices Supply/demand concerns Planting intentions vs. realizations Biofuel growth and energy demand Will supply be able to keep pace with demand? 2010/11 USDA 2011/12 Futures (4/8/11) Corn $5.40 $6.39 Soybeans $11.50 $13.48 Wheat $5.60 $9.05

Thank you for your time. Any questions. My web site: http://www. econ 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/