University Extension/Department of Economics 2011 Crop Market Outlook Iowa Bankers Association Ag Bankers Conference Ames, Iowa Mar. 21, 2011 Chad Hart Assistant Professor/Grain Markets Specialist

University Extension/Department of Economics U.S. Corn Supply and Use Source: USDA Area Planted(mil. acres) Yield(bu./acre) Production(mil. bu.)13,03812,09213,09212,447 Beg. Stocks(mil. bu.)1,3041,6241,6731,708 Imports(mil. bu.) Total Supply(mil. bu.)14,36213,72914,77414,175 Feed & Residual(mil. bu.)5,9135,1825,1405,200 Ethanol(mil. bu.)3,0493,7094,5684,950 Food, Seed, & Other(mil. bu.)1,3381,3161,3711,400 Exports(mil. bu.)2,4371,8491,9871,950 Total Use(mil. bu.)12,73712,05613,06613,500 Ending Stocks(mil. bu.)1,6241,6731, Season-Average Price($/bu.)

University Extension/Department of Economics U.S. Soybean Supply and Use Area Planted(mil. acres) Yield(bu./acre) Production(mil. bu.)2,6772,9673,3593,329 Beg. Stocks(mil. bu.) Imports(mil. bu.) Total Supply(mil. bu.)3,2613,1853,5123,495 Crush(mil. bu.)1,8031,6621,7521,655 Seed & Residual(mil. bu.) Exports(mil. bu.)1,1591,2791,5011,590 Total Use(mil. bu.)3,0563,0473,3613,355 Ending Stocks(mil. bu.) Season-Average Price($/bu.) Source: USDA

University Extension/Department of Economics World Corn Production Source: USDA

University Extension/Department of Economics World Soybean Production Source: USDA

University Extension/Department of Economics La Niña Winter Source: NOAA El Niño Neutral La Niña

University Extension/Department of Economics Corn Export Sales Source: USDA, FAS

University Extension/Department of Economics 2010 U.S. Corn Exports Source: USDA, FAS

University Extension/Department of Economics Corn Export Shifts Source: USDA, FAS

University Extension/Department of Economics

Corn Advance Export Sales Source: USDA, FAS

University Extension/Department of Economics Soybean Export Sales Source: USDA, FAS

University Extension/Department of Economics 2010 U.S. Soybean Exports Source: USDA, FAS

University Extension/Department of Economics Soy Export Shifts Source: USDA, FAS

University Extension/Department of Economics Soy Advance Export Sales Source: USDA, FAS

University Extension/Department of Economics Renewable Fuels Standard (RFS) Crop Year Billion Bushels

University Extension/Department of Economics Ethanol Margins Source: ISU, CARD

University Extension/Department of Economics Ethanol Blending Advantage

University Extension/Department of Economics Projected 2010 Season-Average Corn Price

University Extension/Department of Economics Projected 2010 Season-Average Soy Price

University Extension/Department of Economics Projected 2011 Season-Average Corn Price

University Extension/Department of Economics Projected 2011 Season-Average Soy Price

University Extension/Department of Economics Iowa Corn Prices vs. Costs

University Extension/Department of Economics Iowa Soybean Prices vs. Costs

University Extension/Department of Economics Principal Crop Area Source: USDA-NASS

University Extension/Department of Economics States with Room to Grow StateMillion acresCompeting Crops North Dakota2.249Wheat, corn, soy South Dakota1.400Wheat, corn, soy Missouri0.930Rice, cotton, soy Arkansas0.715Rice, cotton, soy Illinois0.535Wheat, corn, soy Texas0.466Cotton, corn, soy Georgia0.395Cotton, corn, soy Mississippi0.284Cotton, rice, soy North Carolina0.284Cotton, corn, soy Louisiana0.283Rice, cotton, soy

University Extension/Department of Economics New Crop Futures Price Movements WheatCornSoybeansCotton MGE Sept.CME Dec.CME Nov.ICE Dec. ($/bu.) ($/lb.) June Mar Change52%48%45%64%

University Extension/Department of Economics Projected Crop Margins

University Extension/Department of Economics Thoughts for 2011 and Beyond  General economic conditions  Continued economic recovery is a major key for crop prices  Japanese earthquake and tsunami have shaken those prospects  Supply/demand concerns  92 million acres of corn and 78 million acres of soybeans?  South America: La Niña impacts (Argentina, Brazil )  Biofuels: E15; Ethanol & Biodiesel tax credits renewed  Will supply be able to keep pace with demand?  2010/11:USDA:Corn $5.40, Soy $11.60 Futures (as of 3/18/2011):Corn $5.36, Soy $11.67  2011/12: Futures (as of 3/18/2011):Corn $5.83, Soy $12.83

University Extension/Department of Economics Thank you for your time! Any questions? My web site: Iowa Farm Outlook: Ag Decision Maker: