GRAIN OUTLOOK Kansas Commodity Classic 2006 Mike Woolverton Kansas State University
WHEAT
PRODUCTION PROJECTIONS, U.S., 2006/07 All Wheat – bil. Bu. – down 14% All Wheat – bil. Bu. – down 14% Hard Winter – 682 mil. Bu. – down 27% Hard Winter – 682 mil. Bu. – down 27% Hard Spring – 432 mil. Bu. – down 7% Hard Spring – 432 mil. Bu. – down 7% Soft Red – 390 mil. Bu. – up 26% Soft Red – 390 mil. Bu. – up 26% White – 254 mil. Bu. – down 15% White – 254 mil. Bu. – down 15% Durum – 53 mil. Bu. - down 48% Durum – 53 mil. Bu. - down 48%
PRODUCTION PROJECTIONS, MAJOR WHEAT EXPORTERS, 2006/07 (MMT) 2006/072005/06 EU (-4%) EU (-4%) United States (-14%) United States (-14%) Canada 26.3 (+1%) Canada 26.3 (+1%) Australia 10.5 (-57%) 24.5 Australia 10.5 (-57%) 24.5 Argentina (+6%) 12.5 Argentina (+6%) 12.5 Total World Prod (-6%) Total World Prod (-6%)
Wheat Balance Sheet Plant A. (mil.) Harvest A. (mil.) Bu./A Production 2,158 2,105 1,812 Production 2,158 2,105 1,812 Imports Imports Carryover Carryover Total Supply 2,775 2,7272,488 Total Supply 2,775 2,7272,488Utilization: Feed and Residual Feed and Residual Food Food Seed Seed Exports 1,060 1, Exports 1,060 1, Total Utilization 2,235 2,1552,070 Carryover 540 (24%) 571 (26%) 418 (20%) U.S. Farm Price $3.40 $3.42 $4.15-$4.55
Current Market Influences - Wheat Low Carryover Low Carryover Australian Drought (-57%) Australian Drought (-57%) Winter Wheat Plantings Winter Wheat Plantings
CORN
Corn Estimates, USDA, Nov YieldBushels U.S bil. Kansas mil. (135.0)(465.8 mil.) (135.0)(465.8 mil.)
Corn Balance Sheet Plant A. (mil.) Harvest A. (mil.) Bu./A Production 11,807 11,112 10,745 Imports Imports Beginning Carryover 958 2,114 1,971 Beginning Carryover 958 2,114 1,971 Total Supply 12,77613,23512,725 Total Supply 12,77613,23512,725Utilization: Feed and Residual 6,162 6,136 6,050 Feed and Residual 6,162 6,136 6,050 Food, seed, industrial 2,686 2,981 3,540 Ethanol for fuel 1,323 (12%) 1,603 (14%) 2,150 (18%) Food, seed, industrial 2,686 2,981 3,540 Ethanol for fuel 1,323 (12%) 1,603 (14%) 2,150 (18%) Exports 1,814 2,147 2,200 Exports 1,814 2,147 2,200 Total Utilization 10,662 11,26411,790 Ending Carryover 2,114 (20%) 1,971 (17%) 935 (8%) Ending Carryover 2,114 (20%) 1,971 (17%) 935 (8%) U.S. Farm Price $2.06 $2.00 $2.80-$3.20
Current Market Influences - Corn Demand from ethanol producers Demand from ethanol producers Competition for acres Competition for acres Strong export demand Strong export demand Slow harvest in Eastern Corn Belt Slow harvest in Eastern Corn Belt
GRAIN SORGHUM
Sorghum Estimates, USDA, Nov YieldProduction U.S mil. Kansas mil. (75.0) (195.0 mil.)
Sorghum Balance Sheet Plant A. (mil.) Harvest A. (mil.) Bu./A Production Imports Imports Beginning Carryover Beginning Carryover Total Supply Total Supply Utilization: Feed and Residual Feed and Residual Food, seed, industrial Food, seed, industrial Exports Exports Total Utilization Ending Carryover 57 (13%) 65 (17%) 39 (12%) Ending Carryover 57 (13%) 65 (17%) 39 (12%) U.S. Farm Price $1.79 $1.86 $2.80-$3.20
Current Market Influences – Grain Sorghum Demand from ethanol producers Demand from ethanol producers Demand from livestock feeders Demand from livestock feeders Export demand – Mexico and Spain Export demand – Mexico and Spain
SOYBEANS
Soybean Estimates, USDA, Nov YieldProduction U.S bil. Kansas mil. (37.0)(105.5 mil.)
Soybean Balance Sheet Plant A. (mil.) Harvest A. (mil.) Bu./A Production 3,124 3,063 3,204 Imports Imports Beginning Carryover Beginning Carryover Total Supply 3,242 3,3223,657 Total Supply 3,242 3,3223,657Utilization: Crushings 1,696 1,7391,780 Crushings 1,696 1,7391,780 Seed Seed Exports 1, ,145 Residual Exports 1, ,145 Residual Total Utilization 2,986 2,8743,091 Ending Carryover 256 (9%) 449 (16%) 565 (18%) Ending Carryover 256 (9%) 449 (16%) 565 (18%) U.S. Farm Price $ $5.40-$6.40
Current Market Influences - Soybeans Competition for acres Competition for acres Large Carryover Large Carryover Bio-diesel potential Bio-diesel potential Brazilian plantings Brazilian plantings
Corn Acreage Calculation Corn Demand 07/ ,999 mil. Bu. Supply with DDG credit 2 -1,953 Needed corn production12,046 mil. Bu. Acres needed to plant mil. A. (Trend line yield bpa) Acres planted in 06/ mil. Additional acres in 07/ mil. 1 Assumes all uses except ethanol production remain the same as 06/07. Includes one billion bushels of carryover stocks. 2 Assumes DDGs retain 30% of the feed value of corn and all DDGs are used for livestock feed. 3 Assumes the percentage of acres planted to acres harvested remains at 91%. Need to harvest million acres.
Land in Crops (Millions of acres, Most recent three year average) Corn78.6 Soybeans75.6 Hay63.4 Wheat57.3 Cotton15.3 Grain Sorghum 6.3 Total Total crop land in the United States – million acres
Crop Price Relationships 11/10/06 Ratio Ratio If normal 11/10/06 Ratio Ratio If normal 10 yr. ave. 11/10/06 relationship Corn $ Soybeans $ $8.55 Wheat$ $4.95