1. Associate Professor/Crop Marketing Specialist
Ag Market Outlook
Nov. 12, 2018
Chad Hart
Associate Professor/Crop Marketing Specialist 1 1

2. U.S. Corn Supply and Use 2015 2016 2017 2018 2019 Area Planted
(mil. acres)
88.0
94.0
90.2
89.1
92.0
Yield
(bu./acre)
168.4
174.6
176.6
178.9
176.5
Production
(mil. bu.)
13,602
15,148
14,604
14,626
14,930
Beg. Stocks
1,731
1,737
2,293
2,140
1,736
Imports 67 57 36 50
Total Supply
15,401
16,942
16,934
16,816
16,716
Feed & Residual
5,120
5,470
5,298
5,500
5,575
Ethanol
5,224
5,432
5,605
5,650
5,700
Food, Seed, & Other
1,422
1,453
1,480
1,490
Exports
1,898
2,294
2,438
2,450
2,425
Total Use
13,664
14,649
14,793
15,080
15,190
Ending Stocks
1,526
Season-Average Price
($/bu.)
3.61
3.36
3.60
3.90
Source: USDA-WAOB, w/ adjustment for Nov. reports 2 2

3. U.S. Soybean Supply and Use
2015
2016
2017
2018
2019
Area Planted
(mil. acres)
82.7
83.4
90.1
89.1
82.5
Yield
(bu./acre)
48.0
52.0
49.3
52.1
50.0
Production
(mil. bu.)
3,926
4,296
4,411
4,600
4,090
Beg. Stocks
191
197
302
438
955
Imports 24 22 25
Total Supply
4,140
4,515
4,734
5,063
5,070
Crush
1,886
1,901
2,055
2,080
2,075
Seed & Residual
122
146
112
128
127
Exports
1,936
2,166
2,129
1,900
Total Use
3,944
4,214
4,107
4,277
Ending Stocks
793
Season-Average Price
($/bu.)
8.95
9.47
9.33
8.60
8.75
Source: USDA-WAOB, w/ adjustment for Nov. reports 3 3

4. Projected Corn Yields Top: 2018 Yield Estimate
Bottom: Change from last month
Units: Bushels per acre
Source: USDA-NASS 4 4

5. U.S. Corn Harvest Data
Source: USDA-NASS 5 5

6. Iowa Corn Harvest Data
Source: USDA-NASS 6 6

7. Projected Soybean Yields
Top: 2018 Yield Estimate
Bottom: Change from last month
Units: Bushels per acre
Source: USDA-NASS 7 7

8. U.S. Soy Harvest Data
Source: USDA-NASS 8 8

9. Iowa Soy Harvest Data
Source: USDA-NASS 9 9

10. World Corn Production
Source: USDA-WAOB 10 10

11. World Soybean Production
Source: USDA-WAOB 11 11

14. U.S. Meat Production & Prices
Source: USDA-WAOB 14 14

15. +12%
+4%
+10%
+16%
+12%
Data Source: USDA-NASS, Compiled & Forecasts by LMIC
Livestock Marketing Information Center

16. +12%
+4%
+10%
+16%
+12%
Data Source: USDA-NASS, Compiled & Forecasts by LMIC
Livestock Marketing Information Center

17. +9%
+4%
+11%
+11%
+6%
Data Source: USDA-NASS and USDA-ERS, Compiled & Analysis by LMIC
Livestock Marketing Information Center

18. +9%
+4%
+11%
+11%
+6%
Data Source: USDA-NASS and USDA-ERS, Compiled & Analysis by LMIC
Livestock Marketing Information Center

19. Pork Production
Source: USDA-NASS

20. Pork Export Shifts
Source: USDA-FAS

21. Profits since ‘14 have fueled herd expansion and facility investments…
… Boosting capacity & Coordinating investment and throughput
2013 = +$ [-$25.60 to +$24.57]
2014 = +$ [+$13.15 to +$107.25]
2015 = +$ [-$18.40 to +$26.25]
2016 = -$ [-$35.52 to +$32.92]
2017 = +$ [-$12.68 to +$47.62]
2018f = -$ [-$40.71 to +$26.66]
2019f = +$ [-$19.97 to +$28.03]
Source: Lee Schulz, Iowa State University
Projected with Basis Adjusted Futures

22. Data Source: USDA-NASS, Slaughter capacity by Dr. Steve Meyer

23. Beef Production
Source: USDA-NASS

24. Beef Export Shifts
Source: USDA-FAS

25. Historically large margins in ‘14-’15 drove rapid expansion
Data Source: USDA & LMIC, Compiled by LMIC
Livestock Marketing Information Center

26. ‘17 returns highest since ’03 – just lower than phenomenal ‘14…
… Below breakeven returns projected for ‘18 & ‘19
2014 = +$ [+$41 to +$269]
2015 = -$ [-$530 to +$43]
2016 = -$ [-$359 to +$113]
2017 = +$ [-$74 to +$415]
2018f = -$ [-$97 to +$103]
2019f = -$ [-$161 to +$19]
Source: Lee Schulz, Iowa State University
Projected with Basis Adjusted Futures

27. Risks to Livestock Outlook: the usual suspects plus some
Major export disruption
Trade – Retaliatory tariffs, USMCA ratification
Labor – Plants, farms, immigration policy
Productivity/Weights – +/- numbers/pounds
Feed costs – 2 crop failures to match ‘12-’13
Demand: Will we see growth in ‘19?
Domestic: Preferences? Wages/incomes? Substitutes?
Exports: $US? Trade issues? More deals?
Slaughter capacity? Market for big supply?

28. Corn Export Sales
Source: USDA-FAS

29. Corn Export Shifts
Source: USDA-FAS

30. Soybean Export Sales
Source: USDA-FAS

31. Soybean Export Shifts
Source: USDA-FAS

32. Soybean Market Shares Sales for 2017 crop Sales for 2018 crop
Source: USDA-FAS

33. Soybean Meal Export Shifts
Source: USDA-FAS

34. Ethanol Production
Source: EIA

35. Ethanol Exports
Source: EIA

36. Current Corn Futures
4.04
3.71
Source: CME Group, 11/9/2018

37. Current Soybean Futures
9.27
8.67
Source: CME Group, 11/9/2018

38. 2018/19 Crop Margins
Based on futures prices

39. 2019/20 Crop Margins w/ 2018 Costs
Based on futures prices

40. Iowa Corn Prices vs. Costs
Based on USDA prices and ISU costs

41. Iowa Soybean Prices vs. Costs
Based on USDA prices and ISU costs

42. Want to provide feedback on my presentation. https://www. surveymonkey

43. Thank you for your time. Any questions. My web site: http://www2. econ
Thank you for your time! Any questions? My web site: Iowa Farm Outlook: Ag Decision Maker:

44. LMIC Dairy Production and Price Quarterly Forecasts (10/25/18)
Sources: USDA/NASS; USDA/AMS Livestock Market News; Projections and Forecasts by LMIC