1. University Extension/Department of Economics Crop Outlook for 2011 Ag Expo Osage, Iowa Dec. 8, 2010 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)93.586.086.588.2 Yield(bu./acre)150.7153.9164.7154.3 Production(mil. bu.)13,03812,09213,11012,540 Beg. Stocks(mil. bu.)1,3041,6241,6731,708 Imports(mil. bu.)2014810 Total Supply(mil. bu.)14,36213,72914,79214,257 Feed & Residual(mil. bu.)5,9135,1825,1595,300 Ethanol(mil. bu.)3,0493,7094,5684,800 Food, Seed, & Other(mil. bu.)1,3381,3161,3701,380 Exports(mil. bu.)2,4371,8491,9871,950 Total Use(mil. bu.)12,73712,05613,08413,430 Ending Stocks(mil. bu.)1,6241,6731,708827 Season-Average Price($/bu.)4.204.063.555.20

3. University Extension/Department of Economics Translates to a yield in the 170-175 bu. range Translates to a yield around 160 bu. Source: USDA-NASS

4. University Extension/Department of Economics U.S. Soybean Supply and Use 2007200820092010 Area Planted(mil. acres)64.775.777.577.7 Yield(bu./acre)41.739.744.043.9 Production(mil. bu.)2,6772,9673,3593,375 Beg. Stocks(mil. bu.)574205138151 Imports(mil. bu.)10131510 Total Supply(mil. bu.)3,2613,1853,5123,536 Crush(mil. bu.)1,8031,6621,7521,665 Seed & Residual(mil. bu.)93106108117 Exports(mil. bu.)1,1591,2791,5011,570 Total Use(mil. bu.)3,0563,0473,3613,351 Ending Stocks(mil. bu.)205138151185 Season-Average Price($/bu.)10.109.979.5911.45 Source: USDA

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

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

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 Corn Export Shifts Source: USDA, FAS

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

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

12. University Extension/Department of Economics Ethanol Blending Advantage

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

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

15. University Extension/Department of Economics Corn

16. University Extension/Department of Economics Corn Futures Trade Source: CFTC

17. University Extension/Department of Economics Iowa Corn Prices vs. Costs Even with the recent knock, futures have prices in the $5 range Even with higher fertilizer costs, corn’s profitable

18. University Extension/Department of Economics Iowa Soybean Prices vs. Costs Futures have season-average prices above $11 for ’10 and ‘11

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

20. University Extension/Department of Economics States with Room to Grow StateMillion acresCompeting Crops North Dakota2.009Wheat, corn, soy South Dakota1.020Wheat, corn, soy Arkansas0.880Rice, cotton, soy Missouri0.335All of the above Illinois0.311Wheat, corn, soy Kentucky0.311Wheat, corn, soy Louisiana0.290Rice, cotton, soy North Carolina0.284Cotton, corn, soy Kansas0.264Wheat, corn, soy Tennessee0.256Wheat, corn, soy

21. 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 Dec. 78.495.2911.990.92 Change46%31%30%22%

22. University Extension/Department of Economics Thoughts for 2011 and Beyond  General economic conditions  Continued economic recovery is a major key for crop prices  Fears of Chinese inflation and credit tightening have hit the markets  Long-term oil price remain in the $90 range  Supply/demand concerns  South America: La Niña impacts  Biofuels: E10, E12, or E15; Do the tax credits get extended/renewed?  Will supply be able to keep pace with demand?  2010/11:USDA:Corn $5.20, Soy $11.45 Futures (as of 12/7/2010):Corn $5.02, Soy $11.65  2011/12: Futures (as of 12/7/2010):Corn $5.06, Soy $11.58

23. 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/outreach/agriculture/periodicals/ifo/ Ag Decision Maker: http://www.extension.iastate.edu/agdm/