1. Corn and Wheat Market Overview and Outlook by Cory G. Walters Southern Regional Outlook Conference Agricultural Economics

2. Grain Outlook Agricultural Economics –Key Issues 2008 is over Energy Prices Exports Global supplies Policy

3. November 2009 to October 2011 crude oil futures are trading in the 65 to 75 dollar range

6. Acres Planted in U.S. (Millions) Agricultural Economics Crop200720082009% Change 2009-2008 Corn93.586.087.01.16 Soybean64.775.777.82.77 Wheat60.563.159.8-5.23 Total218.7224.8224.6-0.09

7. Policy HR 2454 (Waxman-Markey Bill) Effects of carbon pricing on –Fuel –Fertilizer –Grain Prices

8. Agricultural Economics USDA SUPPLY/DEMAND BALANCE SHEET FOR CORN 07-0808-09est09-10p %% Millions of Acres Acres Planted93.686.087.01.2% Acres Harvested86.578.680.11.9% Bu./Harvested Acre150.7153.9161.95.2% Millions of Bushels Beginning Stocks1,3041,6241,6954.4% Production13,03812,10112,9547.0% Total Supply14,36213,74014,6606.7% Use: Feed and Residual5,9385,350 0.0% Food, seed, & industrial4,3634,9455,47510.7% Ethanol for fuel3,0263,6754,20014.3% Exports2,4361,8502,20018.9% Total Use10,30212,04513,0258.1% Ending Stocks1,6241,6951,635-3.5% Ending Stocks, % of Use15.814.112.6-10.8% U.S. Season Avg. Farm Price, $/ Bu.$4.20$4.08$3.35-17.9% Crop year begins the first of September

9. Agricultural Economics

13. Corn –Dec 09 is trading around $3.37 Positive carry built into market. Has been shrinking recently. –Prices Negatively effected by: –Large carry over –Higher Acreage –High yields »Good growing conditions –Weak oil prices –Where is Ethanol going? »Hit 10 percent blending wall – Expansion by E85

14. Corn Outlook Agricultural Economics Dec 10 corn is trading around $3.85 –Maybe a good price with cost of inputs dropping Safety Nets –Crop Insurance 2010 Base Price likely to be significantly lower than 2009 price –ACRE 90% of Guarantee Price - $ 3.73 per bushel

15. Agricultural Economics USDA SUPPLY/DEMAND BALANCE SHEET FOR WHEAT 07-0808-09est09-10p %% Million Acres Acres Planted60.563.159.6-5.5% Acres Harvested5155.748.9-12.2% Bu./Harvested Acre40.244.941.2-8.2% Million Bushels Beginning Stocks546306669118.6% Production2,0512,5002,016-19.4% Imports113125115-8.0% Total Supply2,6202,9302,800-4.4% Use: Food9479229553.6% Seed887978-1.3% Feed & Residual15250220-12.0% Exports1,2641,0101,25324.1% Total Use2,3142,2612,153-4.8% Ending Stocks306669647.0-3.3% Ending Stocks, % of Use13.229.630.11.6% U.S. Season Aver. Farm Price, $/ Bu.$4.26$6.48$6.703.3% Source: USDA, WASDE

16. Agricultural Economics

19. Wheat Outlook Agricultural Economics July 10 Chicago wheat is approaching $5.00 –Lost about $2.3 per bushel since June World wheat supplies continue to grow Safety Nets –Crop Insurance Significant drop in base prices –CRC Base Price »2009 - $8.58 per bushel »2010 - $5.29 per bushel –ACRE 90 % of Guarantee price - $ 5.97 per bushel

20. Questions Agricultural Economics