1. University Extension/Department of Economics 2011 Grain Market Outlook Production Grower’s Meeting Clarion, Iowa Mar. 16, 2011 Chad Hart Assistant Professor/Grain Markets Specialist chart@iastate.edu 515-294-9911

2. University Extension/Department of Economics U.S. Corn Supply and Use Source: USDA 2007200820092010 Area Planted(mil. acres)93.586.086.488.2 Yield(bu./acre)150.7153.9164.7152.8 Production(mil. bu.)13,03812,09213,09212,447 Beg. Stocks(mil. bu.)1,3041,6241,6731,708 Imports(mil. bu.)2014820 Total Supply(mil. bu.)14,36213,72914,77414,175 Feed & Residual(mil. bu.)5,9135,1825,1405,200 Ethanol(mil. bu.)3,0493,7094,5684,950 Food, Seed, & Other(mil. bu.)1,3381,3161,3711,400 Exports(mil. bu.)2,4371,8491,9871,950 Total Use(mil. bu.)12,73712,05613,06613,500 Ending Stocks(mil. bu.)1,6241,6731,708675 Season-Average Price($/bu.)4.204.063.555.40

3. University Extension/Department of Economics U.S. Soybean Supply and Use 2007200820092010 Area Planted(mil. acres)64.775.777.577.4 Yield(bu./acre)41.739.744.043.5 Production(mil. bu.)2,6772,9673,3593,329 Beg. Stocks(mil. bu.)574205138151 Imports(mil. bu.)101315 Total Supply(mil. bu.)3,2613,1853,5123,495 Crush(mil. bu.)1,8031,6621,7521,655 Seed & Residual(mil. bu.)93106108110 Exports(mil. bu.)1,1591,2791,5011,590 Total Use(mil. bu.)3,0563,0473,3613,355 Ending Stocks(mil. bu.)205138151140 Season-Average Price($/bu.)10.109.979.5911.60 Source: USDA

4. University Extension/Department of Economics World Corn Production Source: USDA

5. University Extension/Department of Economics World Soybean Production Source: USDA

6. University Extension/Department of Economics La Niña Winter Source: NOAA El Niño Neutral La Niña

7. University Extension/Department of Economics Hog Crush Margin Source: Shane Ellis, ISU Extension The Crush Margin is the return after the pig, corn and soybean meal costs. Carcass weight: 200 poundsPig price: 50% of 5 mth out lean hog futures Corn: 10 bushels per pigSoybean meal: 150 pounds per pig

8. University Extension/Department of Economics Cattle Crush Margin Source: Shane Ellis, ISU Extension The Crush Margin is the return after the feeder steer and corn costs. Live weight: 1250 poundsFeeder weight: 750 pounds Corn: 50 bushels per head

9. University Extension/Department of Economics 2010 U.S. Corn Exports Source: USDA, FAS

10. University Extension/Department of Economics Corn Export Shifts Source: USDA, FAS

11. University Extension/Department of Economics

12. Corn Advance Export Sales Source: USDA, FAS

13. University Extension/Department of Economics 2010 U.S. Soybean Exports Source: USDA, FAS

14. University Extension/Department of Economics Soy Export Shifts Source: USDA, FAS

15. University Extension/Department of Economics Soy Advance Export Sales Source: USDA, FAS

16. University Extension/Department of Economics Renewable Fuels Standard (RFS) Crop Year Billion Bushels 20094.11 20104.43 20114.64 20124.86

17. University Extension/Department of Economics Ethanol Margins Source: ISU, CARD

18. University Extension/Department of Economics Ethanol Blending Advantage

19. University Extension/Department of Economics Projected 2010 Season-Average Corn Price

20. University Extension/Department of Economics Projected 2010 Season-Average Soy Price

21. University Extension/Department of Economics Projected 2011 Season-Average Corn Price

22. University Extension/Department of Economics Projected 2011 Season-Average Soy Price

23. University Extension/Department of Economics Iowa Corn Prices vs. Costs

24. University Extension/Department of Economics Iowa Soybean Prices vs. Costs

25. University Extension/Department of Economics Principal Crop Area Source: USDA-NASS

26. University Extension/Department of Economics States with Room to Grow StateMillion acresCompeting Crops North Dakota2.249Wheat, corn, soy South Dakota1.400Wheat, corn, soy Missouri0.930Rice, cotton, soy Arkansas0.715Rice, cotton, soy Illinois0.535Wheat, corn, soy Texas0.466Cotton, corn, soy Georgia0.395Cotton, corn, soy Mississippi0.284Cotton, rice, soy North Carolina0.284Cotton, corn, soy Louisiana0.283Rice, cotton, soy

27. University Extension/Department of Economics New Crop Futures Price Movements WheatCornSoybeansCotton MGE Sept.CME Dec.CME Nov.ICE Dec. ($/bu.) ($/lb.) June 15.814.049.220.75 Mar. 158.215.4812.381.17 Change41%36%34%55%

28. University Extension/Department of Economics Projected Crop Margins

29. University Extension/Department of Economics Thoughts for 2011 and Beyond  General economic conditions  Continued economic recovery is a major key for crop prices  Japanese earthquake and tsunami have shaken those prospects  Supply/demand concerns  92 million acres of corn and 78 million acres of soybeans?  South America: La Niña impacts (Argentina, Brazil )  Biofuels: E15; Ethanol & Biodiesel tax credits renewed  Will supply be able to keep pace with demand?  2010/11:USDA:Corn $5.40, Soy $11.60 Futures (as of 3/15/2011):Corn $5.19, Soy $11.39  2011/12: Futures (as of 3/15/2011):Corn $5.35, Soy $11.91

30. University Extension/Department of Economics Thank you for your time! Any questions? My web site: http://www.econ.iastate.edu/~chart/ Iowa Farm Outlook: http://www.econ.iastate.edu/ifo/ Ag Decision Maker: http://www.extension.iastate.edu/agdm/