GRAIN OUTLOOK Agricultural Lenders Conference 2007 Mike Woolverton Kansas State University

WHEAT

PRODUCTION PROJECTIONS, MAJOR WHEAT EXPORTERS, 2006/ /08 (MMT) 2006/ /08 EU EU United States United States Canada Canada Australia (15.5) Australia (15.5) Argentina Argentina Total World Prod Total World Prod Ending Stocks Ending Stocks

Wheat Balance Sheet /08 Plant A. (mil.) Harvest A. (mil.) Bu./A Production 2,105 1,812 2,114 Production 2,105 1,812 2,114 Imports Imports Carryover Carryover Total Supply 2,727 2,505 2,655 Total Supply 2,727 2,505 2,655Utilization: Feed and Residual Feed and Residual Food Food Seed Seed Exports 1, ,100 Exports 1, ,100 Total Utilization 2,155 2,049 2,293 Carryover 571 (26%) 456 (22%) 362 (16%) U.S. Farm Price $3.42 $4.26 $

Share of World Wheat Exports, 2007/08, USDA

SOYBEANS

Soybean Balance Sheet /08 Plant A. (mil.) Harvest A. (mil.) Bu./A Production 3,063 3,188 2,619 Imports Imports Beginning Carryover Beginning Carryover Total Supply 3,322 3,646 3,180 Total Supply 3,322 3,646 3,180Utilization: Crushings 1,739 1,805 1,825 Crushings 1,739 1,805 1,825 Seed Seed Exports 947 1, Exports 947 1, Residual Residual Total Utilization2,873 3,091 2,964 Ending Carryover 449 (16%) 555 (18%) 215 (7%) Ending Carryover 449 (16%) 555 (18%) 215 (7%) U.S. Farm Price$5.66 $6.40 $

Share of World Soybean Exports, 2007/08, USDA

CORN

Corn Balance Sheet / /08 Plant A. (mil.) Harvest A. (mil.) Bu./A Production 11,114 10,535 13,054 Imports Imports Beginning Carryover 2,114 1,967 1,137 Beginning Carryover 2,114 1,967 1,137 Total Supply 13,237 12,512 14,206 Total Supply 13,237 12,512 14,206Utilization: Feed and Residual 6,141 5,750 5,750 Feed and Residual 6,141 5,750 5,750 Food, seed, industrial 2,981 3,525 4,790 Food, seed, industrial 2,981 3,525 4,790 Ethanol for fuel 1,603 (14%) 2,150 (20%) 3,400 (26%) Ethanol for fuel 1,603 (14%) 2,150 (20%) 3,400 (26%) Exports 2,147 2,100 2,150 Exports 2,147 2,100 2,150 Total Utilization 11,270 11,375 12,690 Ending Carryover 1,967 (17%) 1,137 (10%) 1,516 (12%) Ending Carryover 1,967 (17%) 1,137 (10%) 1,516 (12%) U.S. Farm Price $2.00 $3.00 $

Corn Usage Estimates (Millions of Bushels) USDA/WASDE USDA/WASDE USDA/WASDE USDA/WASDE 2006/ /08 est. 2006/ /08 est. Feed and Residual 5,750 5,700 1 (-1%) Food, Seed, and Industrial 1,375 1,390 2 (+1%) Ethanol for Fuel 2,150 3,400 (+58%) Net Exports 2,100 2,000 (-5%) Ending Stocks 1,137 1,502 Total Usage 12,512 13,992 (+12%) 1 Assumes DDGS retain 30% of the feed value of corn and are included in the feed and residual category by the USDA. 2 Industrial, food, and seed less ethanol.

World Corn Production and Consumption Global production up 10% from 2006/07. Demand up 6%. Global production up 10% from 2006/07. Demand up 6%. Production will be 4.5 MMT (176 mil. Bu.) greater than consumption. Production will be 4.5 MMT (176 mil. Bu.) greater than consumption. Ending stocks forecast to increase slightly from last year to 14 % of usage. Ending stocks forecast to increase slightly from last year to 14 % of usage. Million MT

Share of World Corn Exports, 2007/08, USDA

Land in Crops (Millions of acres) 5 yr. Ave. 07/08USDA Proj. 08/09 5 yr. Ave. 07/08USDA Proj. 08/09 Corn (-5%) Soybeans (+7%) Hay (--) Wheat (+2%) Cotton (-11%) Grain Sorghum (-5%) Principle Crops CRP (-3%) Total crop land in the United States – million acres

Crop Acres Coming Out of CRP, 2007–2017, Millions of Acres Source: USDA, FSA

Land in CRP, Leading States, 2007 Millions of Acres Source: USDA, FSA

Grain Marketing Considerations Wheat – Global shortage of quality milling wheat, Australian production, and acres planted N. Hemisphere. Wheat – Global shortage of quality milling wheat, Australian production, and acres planted N. Hemisphere. Corn/G.S. – Strong demand from domestic livestock and overseas buyers, ethanol demand, and bid for acres. Corn/G.S. – Strong demand from domestic livestock and overseas buyers, ethanol demand, and bid for acres. Soybeans – national average yield, hectares in Brazil and acres in the U.S., growing demand for SBO for biodiesel. Soybeans – national average yield, hectares in Brazil and acres in the U.S., growing demand for SBO for biodiesel. Factors to Watch: Global S/D balances Global S/D balances Battle for Acres Battle for Acres Southern Hemisphere Crops Southern Hemisphere Crops Ethanol Price Ethanol Price