1. Crop Market Outlook ISU Extension Farm Management In-Service
Ames, Iowa
September 30, 2008
Chad Hart
Assistant Professor/Grain Markets Specialist 1

2. U.S. Corn Supply and Use $5.40 $5.50 Source: USDA-WAOB, Sept. 2008
-2.7
-216
-100
-115
$5.40
+0.10
$5.50
Source: USDA-WAOB, Sept. 2008 2

3. U.S. Soybean Supply and Use
-0.5
-39
-30
$12.25
+0.10
$12.35
Source: USDA-WAOB, Aug. 2008

4. World Corn (million metric tons)
Source: USDA-WAOB, Sept. 2008

5. World Corn Production
Source: USDA-WAOB, Sept. 2008

6. World Soybean (million metric tons)
Source: USDA-WAOB, Sept. 2008

7. World Soybean Production
Source: USDA-WAOB, Sept. 2008

8. Source: USDA-NASS, Sept. 2008

9. Source: USDA-NASS, Sept. 2008

10. Crop Basis Patterns
Sources: CARD, Iowa State; IA Dept. of Ag.

11. Livestock Adjustments
Sows farrowing:
Sept-Nov million, down 5% from last year
Dec-Feb million, down 3% from last year
Broiler-type eggs set: 195 million, down 8% from last year
Broiler chicks placed: 168 million, down 4% from last year
Feedlot placements: 2.06 million, down 3% from last year
(2nd lowest since 1996)
Sources: Various USDA-NASS reports

12. Renewable Fuels Standard (RFS)
Calendar Year
Billion Bushels
2009
3.75
2010
4.29
2011
4.50
Crop
Year
Billion Bushels
2008
3.57
2009
4.11
2010
4.43 12

13. Exchange Rate Ratios (Jan. 2007 = 1)
Source: CME futures

14. Corn & Soybean Area
Growth rate of 1.5 million acres per year

15. Input Costs
Source: USDA, Agricultural Prices, Aug. 2008

16. Stocks-to-Use Ratios

17. Thoughts for 2008 Still looking for a later than average frost
Wet spring/flooding impacts will likely continue to show up in yields
How about the dollar?
Weaker dollar has helped hold up crop and livestock exports
General economic conditions
A lot of recent market trade has been tied to reaction to the financial crisis and the federal government’s response
Most important ag. statistic: Crude oil price

18. Thoughts for 2009 and Beyond
Many of the storylines from the past few years will continue
Tight stocks for both corn and soybeans
The competition for acreage
Ethanol’s buildout & livestock’s adjustment
Energy price & general economy concerns
Market volatility will remain high
Link to the energy markets
More market players with different trading objectives
Given current factors, the 2009 outlook is for crop prices to be in the neighborhood of 2008 prices

19. Thoughts for 2009 and Beyond
With input costs moving up, need to protect against downside price risk
Forward contracting
Futures/options
Revenue insurance
Know your break-even price and defend it
The competition for acreage should lead to pricing opportunities pre-planting

20. Thank you for your time! Any questions?