2012 Crop Market Outlook Women in Ag Marketing Meeting Iowa Falls, Iowa Apr. 4, 2012 Chad Hart Assistant Professor/Grain Markets Specialist chart@iastate.edu 515-294-9911 1 1

U.S. Corn Supply and Use 2008 2009 2010 2011 2012 Area Planted (mil. acres) 86.0 86.4 88.2 91.9 94.0 Yield (bu./acre) 153.9 164.7 152.8 147.2 164.0 Production (mil. bu.) 12,092 13,092 12,447 12,358 14,270 Beg. Stocks 1,624 1,673 1,708 1,128 801 Imports 14 8 28 20 15 Total Supply 13,729 14,774 14,182 13,506 15,086 Feed & Residual 5,182 5,125 4,793 4,600 5,200 Ethanol 3,709 4,591 5,021 5,000 4,950 Food, Seed, & Other 1,316 1,370 1,407 1,405 1,420 Exports 1,849 1,980 1,835 1,700 1,900 Total Use 12,056 13,066 13,055 12,705 13,470 Ending Stocks 1,616 Season-Average Price ($/bu.) 4.06 3.55 5.18 6.20 5.00 95.9 14,558 ? ? ? ? ? ? Source: USDA-WAOB, 2012 Unofficial Projections 2 2

U.S. Soybean Supply and Use 2008 2009 2010 2011 2012 Area Planted (mil. acres) 75.7 77.5 77.4 75.0 Yield (bu./acre) 39.7 44.0 43.5 41.5 43.9 Production (mil. bu.) 2,967 3,359 3,329 3,056 3,250 Beg. Stocks 205 138 151 215 275 Imports 13 15 14 Total Supply 3,185 3,512 3,495 3,286 3,540 Crush 1,662 1,752 1,648 1,615 1,660 Seed & Residual 106 110 130 120 126 Exports 1,279 1,499 1,501 1,275 1,550 Total Use 3,047 3,361 3,280 3,011 3,335 Ending Stocks Season-Average Price ($/bu.) 9.97 9.59 11.30 12.00 11.50 73.9 3,202 ? ? ? ? Source: USDA-WAOB, 2012 Unofficial Projections 3 3

Corn Intentions Source: USDA-NASS

Soybean Intentions Source: USDA-NASS

Crop Shifts Source: USDA-NASS

Intentions vs. Plantings Source: USDA-NASS

World Corn Production Source: USDA-WAOB 8 8

World Soybean Production Source: USDA-WAOB 9 9

Corn vs. Wheat Source: CME Group, 4/2/2012

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 Export Shifts Source: USDA-FAS

Soy Export Shifts Source: USDA-FAS

Change of Export Pace

Corn Grind for Ethanol Source: DOE-EIA

Ethanol Stocks Source: DOE-EIA

U.S. Blended Gasoline Consumption 7.6 bil. gal. 7.4 bil. gal. Source: DOE-EIA, via USDA-ERS

Projected 2011 Season-Average Corn Price Cost

Projected 2011 Season-Average Soy Price Cost

Projected 2012 Season-Average Corn Price Cost

Projected 2012 Season-Average Soy Price Cost

Iowa Corn Prices vs. Costs

Iowa Soybean Prices vs. Costs

Iowa Crop Margins

2012 Crop Prices

Source: NOAA, Climate Prediction Center

3 Month Precipitation Outlook Source: NOAA, Climate Prediction Center

Current Corn Futures 6.01 5.31 5.26 5.13 Source: CME Group, 4/2/2012

Current Soybean Futures 13.18 12.36 12.14 11.86 Source: CME Group, 4/2/2012

Thoughts for 2012 and Beyond General economic conditions Continued worldwide economic recovery is a major key for crop prices US job recovery, European financial concerns Supply/demand concerns Worries about dry conditions in South America and in U.S. Biofuel growth and energy demand Will supply be able to keep pace with demand? Nearly 96 million acres of corn might do the trick Roughly 74 million acres of soybeans might not 2011/12: USDA: Corn $6.20; Soy $12.00 Futures (as of 4/2/12): Corn $6.01; Soy $12.36 2012/13: Futures (as of 4/2/12): Corn $5.31; Soy $13.18

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/