1. Department of Economics Marketing Outlook and Tools for 2010 Wall Lake Crop Fair Wall Lake, Iowa Feb. 22, 2010 Chad Hart Assistant Professor/Grain Markets Specialist chart@iastate.edu 515-294-9911

2. Department of Economics U.S. Corn Supply and Use Source: USDA 2007200820092010 Area Planted(mil. acres)93.586.086.589.0 Yield(bu./acre)150.7153.9165.2160.9 Production(mil. bu.)13,03812,09213,15113,160 Beg. Stocks(mil. bu.)1,3041,6241,6731,719 Imports(mil. bu.)20141015 Total Supply(mil. bu.)14,36213,72914,83414,894 Feed & Residual(mil. bu.)5,9135,2465,5505,350 Ethanol(mil. bu.)3,0493,6774,3004,500 Food, Seed, & Other(mil. bu.)1,3381,2761,2651,290 Exports(mil. bu.)2,4371,8582,0002,100 Total Use(mil. bu.)12,73712,05613,11513,240 Ending Stocks(mil. bu.)1,6241,6731,7191,654 Season-Average Price($/bu.)4.204.063.703.60

3. Department of Economics U.S. Soybean Supply and Use Source: USDA 2007200820092010 Area Planted(mil. acres)64.775.777.577.0 Yield(bu./acre)41.739.744.042.9 Production(mil. bu.)2,6772,9673,3613,260 Beg. Stocks(mil. bu.)574205138210 Imports(mil. bu.)101388 Total Supply(mil. bu.)3,2613,1853,5073,478 Crush(mil. bu.)1,8031,6621,7201,655 Seed & Residual(mil. bu.)93101177168 Exports(mil. bu.)1,1591,2831,4001,325 Total Use(mil. bu.)3,0563,0473,2973,147 Ending Stocks(mil. bu.)205138210330 Season-Average Price($/bu.)10.109.979.458.80

4. Department of Economics Storage Issues Source: Hurburgh and Elmore, ICM News, 10/15/09

5. Department of Economics World Corn Production Source: USDA

6. Department of Economics Corn – Argentina & Brazil Source: USDA

7. Department of Economics World Soybean Production Source: USDA

8. Department of Economics Soybeans – Argentina & Brazil Source: USDA

9. Department of Economics Smaller Livestock Numbers Source: USDA, NASS, various reports

10. Department of Economics Hog Returns vs. Corn Prices Sources: ISU Extension, Farrow-to-Finish; USDA-NASS

11. Department of Economics Cattle Returns vs. Corn Prices Sources: ISU Extension, Yearling Steers; USDA-NASS

12. Department of Economics Hog Crush Margin Source: Dr. John Lawrence, 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

13. Department of Economics Cattle Crush Margin Source: Dr. John Lawrence, 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

14. Department of Economics Exchange Rates (Jan. 2003 = 1) Source: USDA, ERS

15. Department of Economics Corn Export Sales Source: USDA, FAS

16. Department of Economics 2009 U.S. Corn Exports Source: USDA, FAS

17. Department of Economics Soybean Export Sales Source: USDA, FAS

18. Department of Economics 2009 U.S. Soybean Exports Source: USDA, FAS

19. Department of Economics Renewable Fuels Standard (RFS) Crop Year Billion Bushels 20083.57 20094.11 20104.43 20114.64

20. Department of Economics Ethanol Margins Source: ISU, CARD

21. Department of Economics Crude Oil Prices Sources: EIA, NYMEX

22. Department of Economics Ethanol Blending Advantage

23. Department of Economics Outside Influences (Jan. 2007 = 1)

24. Department of Economics Corn 1990 - 2006

25. Department of Economics Corn

26. Department of Economics Soybeans

27. Department of Economics Corn Futures Trade Source: CFTC

28. Department of Economics Soybean Futures Trade Source: CFTC

29. Department of Economics Iowa Crop Basis

30. Department of Economics Projected 2009 Season-Average Corn Price

31. Department of Economics Projected 2009 Season-Average Soy Price

32. Department of Economics Corn Futures Source: CBOT, 2/19/10

33. Department of Economics Soybean Futures Source: CBOT, 2/19/10

34. Department of Economics Ratio: Nov. 2010 Soy/Dec. 2010 Corn Source: CBOT

35. Department of Economics Input Costs Source: USDA, Agricultural Prices, Jan. 29, 2010

36. Department of Economics Iowa Corn Prices vs. Costs

37. Department of Economics Iowa Soybean Prices vs. Costs

38. Department of Economics Thoughts for 2009/10 and Beyond  General economic conditions  Projected economic recovery is a major key for crop prices  Weakness in the dollar helps exports, but dollar may fight back  Nearby crude oil prices floating in mid to upper $70’s  Supply/demand concerns  Livestock numbers continue to decline  South America: Record soybean crop and large corn crop  2009/10:USDA:Corn $3.70, Soy $9.45 Futures:Corn $3.49, Soy $9.30  2010/11:USDA:Corn $3.60, Soy $8.80 Futures:Corn $3.82, Soy $8.93

39. Department of Economics Acres Insured in 2008 Corn and Soybeans--Iowa Source: Dr. William Edwards, ISU Extension

40. Department of Economics Acres Insured in 2009 Corn and Soybeans--Iowa Source: Dr. William Edwards, ISU Extension

41. Department of Economics February and Harvest Prices 2009 Source: Dr. William Edwards, ISU Extension

42. Department of Economics Indemnity Prices: Corn (revenue insurance) Source: Dr. William Edwards, ISU Extension

43. Department of Economics Indemnity Prices: Soybeans (revenue insurance) Source: Dr. William Edwards, ISU Extension

44. Department of Economics Lower Indemnity Prices in 2010? CornAPH (Yield)Revenue 2009$4.00$4.04 2010$3.90? Soybeans 2009$9.90$8.80 2010$9.15? Source: Dr. William Edwards, ISU Extension

45. Department of Economics Coverage level Basic Unit subsidy rate New rate for Enterprise Units New rate for Whole Farm Units 60% 64% 80% not avail. 65% 59% 80% 70% 59% 80% 75% 55% 77%80% 48% 68%71% 85% 38% 53%56% Premium Subsidy Rates Source: Dr. William Edwards, ISU Extension

46. Department of Economics Source: Dr. William Edwards, ISU Extension

47. Department of Economics Biotech Endorsement (BE) Available in the entire Corn Belt. Must be at least 75% of the acres in the insurance unit. Still need 20% as refuge acres (EPA). Less documentation this year. Lack of compliance penalty is loss of premium discount only. Discount available on yield (APH) or revenue (RA, CRC) but not on group policies Estimated at 10-15% discount, overall. Source: Dr. William Edwards, ISU Extension

48. Department of Economics Eligible Hybrids Monsanto YieldGard® Plus with Roundup Ready® Corn 2, YieldGard® VT Triple, and YieldGard® VT Triple PRO hybrids Pioneer and Dow AgroSciences Herculex® Xtra and Herculex® Xtra RR2® hybrids Syngenta Agrisure® CB and RW stacked and Agrisure® 3000GT Source: Dr. William Edwards, ISU Extension

49. Department of Economics Key Points for 2010 1.SURE and ACRE do not reduce the need for crop insurance. 2.Indemnity prices will be a little lower. 3.Compare RA and CRC premiums. 4.Higher enterprise unit subsidy allows higher coverage levels. 5.Biotech endorsement expanded. 6.Specialty soybeans can be insured separately. Source: Dr. William Edwards, ISU Extension

50. Department of Economics Thank you for your time! Any questions? My web site: http://www.econ.iastate.edu/faculty/hart/ Iowa Farm Outlook: http://www.econ.iastate.edu/outreach/agriculture/periodicals/ifo/ Ag Decision Maker: http://www.extension.iastate.edu/agdm/