1. 2012 Crop Market Outlook AFBF Commodity Outlook Conference
Baltimore, Maryland
Oct. 11, 2012
Chad Hart
Associate Professor/Grain Markets Specialist 1 1

2. U.S. Corn Supply and Use 2008 2009 2010 2011 2012 Area Planted
(mil. acres)
86.0
86.4
88.2
91.9
96.9
Yield
(bu./acre)
153.9
164.7
152.8
147.2
122.0
Production
(mil. bu.)
12,092
13,092
12,447
12,358
10,706
Beg. Stocks
1,624
1,673
1,708
1,128
988
Imports 14 8 28 75
Total Supply
13,729
14,774
14,182
13,514
11,769
Feed & Residual
5,182
5,125
4,793
4,562
4,150
Ethanol
3,709
4,591
5,021
5,000
4,500
Food, Seed, & Other
1,316
1,370
1,407
1,421
1,350
Exports
1,849
1,980
1,835
1,543
1,150
Total Use
12,056
13,066
13,055
12,526
11,150
Ending Stocks
619
Season-Average Price
($/bu.)
4.06
3.55
5.18
6.22
7.80
These are the latest numbers from USDA. Record production and demand is gone and was replaced by record prices. All sectors of demand took major cuts. Ending stocks are projected to be at pipeline levels.
Source: USDA-WAOB 2 2

3. U.S. Soybean Supply and Use
2008
2009
2010
2011
2012
Area Planted
(mil. acres)
75.7
77.5
77.4
75.0
77.2
Yield
(bu./acre)
39.7
44.0
43.5
41.9
37.8
Production
(mil. bu.)
2,967
3,359
3,329
3,094
2,860
Beg. Stocks
205
138
151
215
169
Imports 13 15 14 16 20
Total Supply
3,185
3,512
3,495
3,325
3,050
Crush
1,662
1,752
1,648
1,703
1,540
Seed & Residual
106
110
130 92
115
Exports
1,279
1,499
1,501
1,360
1,265
Total Use
3,047
3,361
3,280
3,155
2,920
Ending Stocks
Season-Average Price
($/bu.)
9.97
9.59
11.30
12.50
15.25
For soybeans, a tight market continues to get tighter. USDA ratcheted down demand for the new crop to hold 2012/13 ending stocks at 115 million bushels. As with corn, all sectors of demand took a big cut.
Source: USDA-WAOB 3 3

4. U.S. Wheat Supply and Use 2008 2009 2010 2011 2012 Area Planted
(mil. acres)
63.2
59.2
53.6
54.4
55.7
Yield
(bu./acre)
44.9
44.5
46.3
43.7
Production
(mil. bu.)
2,499
2,218
2,207
1,999
2,269
Beg. Stocks
306
657
976
862
743
Imports
127
119 97
112
130
Total Supply
2,932
2,993
3,279
2,974
3,142
Food
927
919
926
941
950
Seed 78 69 71 76 73
Feed & Residual
255
150
132
164
315
Exports
1,015
879
1,289
1,050
1,150
Total Use
2,275
2,018
2,417
2,231
2,488
Ending Stocks
654
Season-Average Price
($/bu.)
6.78
4.87
5.70
7.24
8.10
Source: USDA-WAOB 4 4

5. U.S. Cotton Supply and Use
2008
2009
2010
2011
2012
Area Planted
(mil. acres)
9.47
9.15
10.97
14.74
12.36
Yield
(lb./acre)
813
777
812
790
795
Production
(mil. bales)
12.82
12.19
18.10
15.57
17.29
Beg. Stocks
10.05
6.34
2.95
2.60
3.35
Imports
0.00
0.01
0.02
Total Supply
22.87
18.53
21.06
18.19
20.64
Domestic Use
3.59
3.55
3.90
3.30
3.40
Exports
13.26
12.04
14.38
11.71
11.60
Total Use
16.85
15.59
18.28
15.01
15.00
Ending Stocks
5.60
Average Farm Price
($/lb.)
0.478
0.629
0.815
0.883
0.680
Source: USDA-WAOB 5 5

6. Price Ratios Since May 1

7. Crop Conditions
Source: USDA-NASS

8. Projected Corn Yields
These are based on conditions around Sept. 1.

9. Objective Corn Yield Data
USDA crop adjusters found grain weights well below those for the last 8 years.
Source: USDA-NASS

10. Projected Soybean Yields
These are based on conditions around Sept. 1.

11. Objective Soybean Yield Data
USDA crop adjusters found pod numbers well below those for the last 8 years.
Source: USDA-NASS

12. Winter Wheat Production
Source: USDA-NASS

13. Other Spring Wheat Production
Source: USDA-NASS

14. Durum Wheat Production
Source: USDA-NASS

15. Projected Cotton Yields
Source: USDA-NASS

16. World Corn Production Source: USDA-WAOB
Global corn production took a hit last month, with Canada and Europe seeing reductions in potential corn production.
Source: USDA-WAOB 16 16

17. World Soybean Production
Soybean prices have spurred on increased soybean plantings worldwide. South America will lead the charge.
Source: USDA-WAOB 17 17

18. World Wheat Production
Source: USDA-WAOB 18 18

19. World Cotton Production
Source: USDA-WAOB 19 19

20. 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
Projected hog margins are well south of breakeven.
Source: ISU Extension

21. Cattle Crush Margin
The Crush Margin is the return after the feeder steer and corn costs.
Live weight: pounds Feeder weight: 750 pounds
Corn: 50 bushels per head
Cattle returns look better next year, but feed costs remain a major concern.
Source: ISU Extension

22. U.S. Meat Production & Prices
Higher feed costs have led to lower meat production projections.
Source: USDA-WAOB 22 22

23. Corn Export Shifts
Source: USDA-FAS

24. Soy Export Shifts
Source: USDA-FAS

25. Wheat Export Shifts
Source: USDA-FAS

26. Cotton Export Shifts
Source: USDA-FAS

27. Corn Grind for Ethanol
Negative margins at some ethanol plants have dragged down production.

28. Ethanol Stocks Source: DOE-EIA
And stocks have built up in recent weeks, weakening price projections.
Source: DOE-EIA

29. U.S. Blended Gasoline Consumption
7.6 bil. gal.
But the industry still faces blend wall issues as fuel consumption has dropped with the economy and the E-10 market is basically full.
7.4 bil. gal.
Source: DOE-EIA, via USDA-ERS

30. Current Corn Futures
6.90
5.93
5.58
Source: CME Group, 10/10/2012

31. Current Soybean Futures
14.37
12.70
12.29
Source: CME Group, 10/10/2012

32. Current Wheat Futures
8.09
8.16
Source: KCBOT, 10/10/2012

33. Current Cotton Futures
Source: ICE, 10/10/2012

34. Total Acreage Shift Source: USDA-NASS
We brought back a lot of acres in Can we hold them in 2013?
Source: USDA-NASS

35. Acreage Shift by State Top: Planted in 2012 Bottom: Change from 2011
Weather was great for planting in 2012 (just not for producing). To hold acreage we will need great planting weather again.
Top: Planted in 2012
Bottom: Change from 2011
Units: 1,000 acres
Source: USDA-NASS

37. Acreage Shift by Crop Acreage change from 2011 Units: 1,000 acres
Cotton will likely give up acreage again. But with crop prices strong across the board, the acreage battle could be interesting in 2013.
Source: USDA-NASS

38. Thoughts for 2012 and Beyond
Supply/demand concerns
Soil moisture issues
Biofuel and export strength
Worldwide response to drought-induced pricing
2012/13
USDA
Futures
(10/10/12)
2013/14
Corn
$7.90
$6.90
$5.93
Soybeans
$16.00
$14.37
$12.70
Wheat
$8.10
$8.09
$8.16
Cotton
$0.70
~$0.75

39. Thank you for your time. Any questions. My web site: http://www. econ
Thank you for your time! Any questions? My web site: Iowa Farm Outlook: Ag Decision Maker: