1. 2012 Crop Market Outlook ISU Extension Farm Management In-Service
Ames, Iowa
Oct. 3, 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
96.4
Yield
(bu./acre)
153.9
164.7
152.8
147.2
122.8
Production
(mil. bu.)
12,092
13,092
12,447
12,358
10,727
Beg. Stocks
1,624
1,673
1,708
1,128
988
Imports 14 8 28 25 75
Total Supply
13,729
14,774
14,182
13,511
11,790
Feed & Residual
5,182
5,125
4,793
4,400
4,150
Ethanol
3,709
4,591
5,021
5,000
4,500
Food, Seed, & Other
1,316
1,370
1,407
1,390
1,350
Exports
1,849
1,980
1,835
1,540
1,250
Total Use
12,056
13,066
13,055
12,330
11,250
Ending Stocks
540
Season-Average Price
($/bu.)
4.06
3.55
5.18
6.25
7.90 ? ? ?
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
76.1
Yield
(bu./acre)
39.7
44.0
43.5
41.9
35.3
Production
(mil. bu.)
2,967
3,359
3,329
3,094
2,634
Beg. Stocks
205
138
151
215
169
Imports 13 15 14 16 20
Total Supply
3,185
3,512
3,495
3,325
2,824
Crush
1,662
1,752
1,648
1,705
1,500
Seed & Residual
106
110
130 90
114
Exports
1,279
1,499
1,501
1,360
1,055
Total Use
3,047
3,361
3,280
3,156
2,670
Ending Stocks
154
Season-Average Price
($/bu.)
9.97
9.59
11.30
12.45
16.00
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. Corn Export Sales Source: USDA-FAS
Corn exports for the 2012 crop have started even slower than 2011, only China buying more.
Source: USDA-FAS

5. Soy Export Sales Source: USDA-FAS
2012 soybean exports have rebounded to around 2010 levels. The key market here is China and they have purchased a lot of soybeans recently.
Source: USDA-FAS

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

7. U.S. DDG Supply and Use
2008
2009
2010
2011
2012
Production
(mil. metric tons)
28.6
35.4
38.7
38.6
34.7
Imports
0.3
0.4
Total Supply
28.9
35.8
39.2
38.9
35.0
Domestic
23.9
27.5
30.9
31.2
28.1
Exports
5.0
8.3
7.7
6.9
Total Use
39.1
Average Price
($/ton)
126
114
188
222
275
My estimates, so take with a grain (or pound) of salt 7 7

8. U.S. DDG Trade 8 8

9. 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

10. Current Corn Futures 7.08 5.96 5.60 Source: CME Group, 10/3/2012
Based on current futures prices, national season-average cash price estimates for corn are $7.08 for the 2012 crop, $5.96 for 2013, and $5.60 for 2014.
5.60
Source: CME Group, 10/3/2012

11. Current Soybean Futures
14.48
For soybeans, the estimates are $14.48 for the 2012 crop, $12.61 for 2013, and $12.17 for 2014.
12.61
12.17
Source: CME Group, 10/3/2012

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

13. 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

14. 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

15. Thoughts for 2013 and Beyond
Supply/demand concerns
Soil moisture
South America gets 1st chance to respond to drought pricing
Will supply be able to keep pace with demand?
Drought pulled supply down, but some better yield reports are coming in
High prices are diminishing demand
General economic conditions
Continued worldwide economic recovery is a key for crop prices
US job recovery, European financial concerns, China?
2012/13: USDA: Corn $7.90; Soy $16.00
Futures (as of 10/3/12): Corn $7.08; Soy $14.48
2013/14: Futures Corn $5.96; Soy $12.61
2014/15: Futures Corn $5.60; Soy $12.17

16. 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: