1. Market Outlook & Risk Management
NW Iowa Young Farmers Meeting
Orange City, Iowa
Mar. 26, 2015
Chad Hart
Associate Professor/Crop Markets Specialist 1 1

2. U.S. Corn Supply and Use 2011 2012 2013 2014 2015 Area Planted
(mil. acres)
91.9
97.3
95.4
90.6
89.0
Yield
(bu./acre)
147.2
123.1
158.1
171.0
166.8
Production
(mil. bu.)
12,360
10,755
13,829
14,216
13,595
Beg. Stocks
1,128
989
821
1,232
1,777
Imports 29
160 36 25
Total Supply
13,517
11,904
14,686
15,472
15,397
Feed & Residual
4,557
4,315
5,036
5,300
5,275
Ethanol
5,000
4,641
5,134
5,200
5,225
Food, Seed, & Other
1,428
1,397
1,367
1,395
1,410
Exports
1,543
730
1,917
1,800
1,850
Total Use
12,528
11,083
13,454
13,695
13,760
Ending Stocks
1,637
Season-Average Price
($/bu.)
6.22
6.89
4.46
3.70
3.50
Sources: USDA-WAOB , USDA-OCE 2015 2 2

3. U.S. Soybean Supply and Use
2011
2012
2013
2014
2015
Area Planted
(mil. acres)
75.0
77.2
76.8
83.7
83.5
Yield
(bu./acre)
41.9
40.0
44.0
47.8
46.0
Production
(mil. bu.)
3,094
3,042
3,358
3,969
3,800
Beg. Stocks
215
169
141 92
385
Imports 16 41 72 25 20
Total Supply
3,325
3,252
3,570
4,086
4,205
Crush
1,703
1,689
1,734
1,795
1,840
Seed & Residual 88
105 97
116
Exports
1,365
1,317
1,647
1,790
1,820
Total Use
3,155
3,111
3,478
3,701
3,775
Ending Stocks
430
Season-Average Price
($/bu.)
12.50
14.40
13.00
10.20
9.00
Sources: USDA-WAOB , USDA-OCE 2015 3 3

4. Corn Yields Top: 2014 Yield Bottom: Change from last year
Units: Bu/acre
Source: USDA-NASS

5. Soybean Yields Top: 2014 Yield Bottom: Change from last month
Units: Bu/acre
Source: USDA-NASS

6. World Corn Production
Source: USDA-WAOB 6 6

7. World Soybean Production
Source: USDA-WAOB 7 7

8. 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
Source: ISU Extension

9. 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
Source: ISU Extension

10. U.S. Meat Production & Prices
Source: USDA-WAOB 10 10

11. Corn Export Shifts
Source: USDA-FAS

12. Corn Export Sales
Source: USDA-FAS

13. Soybean Export Shifts
Source: USDA-FAS

14. Soybean Export Shifts
Source: USDA-FAS

15. Crude Oil Prices
Sources: EIA and CME

16. Strength of the U.S. Dollar
Source: Federal Reserve

17. Corn Grind for Ethanol

18. Ethanol Stocks

19. Current Corn Futures
3.98
3.74
Source: CME Group, 3/24/2015

20. Current Soybean Futures
10.00
9.27
Source: CME Group, 3/24/2015

21. 2014/15 Crop Margins

22. 2015/16 Crop Margins

23. Corn Prices vs. Costs
Per Bushel Cost calculated as Per Acre Cost from ISU Extension divided by Actual Yield per Acre
Sources: USDA-NASS for Prices, Duffy for Costs

24. Soybean Prices vs. Costs
Per Bushel Cost calculated as Per Acre Cost from ISU Extension divided by Actual Yield per Acre
Sources: USDA-NASS for Prices, Duffy for Costs

25. Marketing Matrix

26. Hedging

27. Options

30. Corn Marketing Year Average Price Projections

31. Soybean Marketing Year Average Price Projections

32. PLC pays, ARC does not Neither pay Both pay ARC pays, PLC does not
The choice depends on where you expect prices and yields to be over the next 5 years. There are price/yield combinations where PLC pays and ARC does not. There are also price/yield combinations where ARC pays and PLC does not.

33. Why Crops Fail

34. Yield Insurance Payout Graph
No Payout
Payout

35. Yield Insurance is like an Option

36. RPE Payout Graph
No Payout
Payout

37. Rev. Insurance is like an Option

38. RP Payout Graph No Payment Neither Pay RPE Pays YP Pays Both Pay
RP Pays

39. Corn Insurance Prices

40. Soybean Insurance Prices

41. Corn Acres Insured in 2014
87% of all
corn acres
are insured

42. Soy Acres Insured in 2014
88% of all
soybean acres
are insured

43. 2014 Corn and Soy Coverage Levels

44. Coverage Levels for YP

45. Coverage Levels for RP

46. Thoughts for 2015 and Beyond
Supply/demand concerns
Record corn and soybean crops, but also record demand
Markets are in a holding pattern, waiting for news
Watching South American crop progress and U.S. acreage
Projected negative margins for 2014 and 2015 crops
2014/15
USDA
2015/16
Futures
(3/24/15)
Corn
$3.70
$3.50
$3.74
$3.98
Soybeans
$10.20
$9.00
$10.00
$9.27

47. 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: