crop outlook prospective plantings webinar 4 01 15 final · prices corn beans wheat harvest futures...

2015 Crop Outlook Webinar April 1, 2015

What Do USDA’s March Prospec(ve Plan(ngs & Grain Stocks Reports Mean for 2015 Outlook?

Chris Hurt, Professor & Extension Ag. Economist

Corinne Alexander, Professor & Extension Ag. Economist

James Mintert, Professor & Director, Center for Commercial Agriculture

2015 Crop Outlook Webinar April 1, 2015

email your quesMons to [email protected]

2015 Crop Outlook Webinar, April 1, 2015

Stocks SituaMon Stocks March 1 ExpectaMon

(Dow Jones Survey) Difference

-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐ Million Bushels -‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐

Corn: Bearish

7,745 7,628 +117

Soybeans Neutral

1,334 1,341 -‐7

Wheat: Neutral

1,124 1,143 -‐19


97.2

90.6 89.2

83.7

84.6

55.4

56.8

50

55

60

65

70

75

80

85

90

95

96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15

Mill

ion

Acr

es

Corn, Soybean, Wheat Planted Acres

Corn Soybeans Wheat

2015 Corn -‐2% Beans +1% Wheat -‐3%


U.S. Planted Acres 2015 vs. 14 2015 vs. 14

13 14 15 Change %

Corn 95,365 90,597 89,199 -1,398 -2%

Soybeans 76,840 83,701 84,635 934 1%

Wheat 56,236 56,822 55,367 -1,455 -3%

Cotton 10,407 11,037 9,549 -1,488 -13%

Sorghum 8,076 7,138 7,900 762 11%

Oats 2,980 2,723 2,931 208 8%

Barley 3,528 2,975 3,258 283 10%

Rice 2,490 2,939 2,915 -24 -1%

Sunflower 1,576 1,561 1,786 225 14%

Sum 9 Major 257,498 259,493 257,540 -1,953 -1%


EsGmated Variable Cost Per Acre: Average Quality Indiana Land, (165 bpa corn, 50 bpa beans, 71 bpa wheat)

425

223 194

342

183 149

387

194 169

461

230 203

462

239 204

432

228 181

446

222 183

0 50

100 150 200 250 300 350 400 450 500

RotaGon CORN RotaGon BEANS WHEAT

2009 2010 2011 2012 2013 2014 2015


2016 Estimated Crop Budget: Indiana: March 31, 2015

Prices Corn Beans Wheat

Harvest Futures 2015 $4.00 $9.55 $5.14 Expected Basis -0.25 -0.30 -0.35

Expected Harvest Cash Price $3.75 $9.25 $4.79

Estimated Yield/Acre and Returns/Acre Above Variable Costs

Continuous Corn Rotation Corn Rotation Soybeans Single-Crop Wheat

Land Quality bu./acre $/acre bu./acre $/acre bu./acre $/acre bu./acre $/acre Low 124 $41 132 $93 40 $159 57 $111 Average 155 $112 165 $173 50 $241 71 $157 High 186 $216 198 $284 60 $321 85 $202 Budget: Purdue ID-166 (March 2015)


New Crop Futures March 2 March 31 Change

Corn $4.13 $4.00 -‐$0.13

Soybeans $9.85 $9.55 -‐$0.30

Returns Per Acre March 2 March 31 Change

Corn $194 $173 -‐$21

Soybeans $255 $241 -‐$14

Beans > Corn $61 $68 +$7

Returns Above Variable Costs


Crop Insurance Prices ‘15 Crop Insure

Price 3-‐31-‐15 Dec/Nov Futures

Protected Revenue

Corn $4.15 $4.00 $582

Soybeans $9.73 $9.55 $414

Protected Revenue calculaGon assumes average quality land in Indiana, and Coverage level of 85%


Corn: USDA

3/10/15 11/12 12/13 13/14 14/15 15/16 Million Bushels Purdue Carryin 1,128 989 821 1,232 1,850 Production 12,358 10,755 13,829 14,216 13,421 Total Supply 13,514 11,904 14,781 15,472 15,291 Feed & Residual 4,547 4,315 5,036 5,300 5,400 FSI Non-Fuel 1,426 1,396 1,400 1,395 1,410 FSI Fuel (Ethanol) 5,011 4,641 5,134 5,200 5,200 Export 1,541 730 1,917 1,800 1,750 Total Use 12,525 11,083 13,454 13,695 13,760 Ending Stocks 989 821 1,232 1,777 1,531 US Farm Price $6.22 $6.89 $4.46 $3.70 $4.00

$3.50- $3.90

Planted: 90.6 89.2 -‐1.5%


Corn 2015 Yield Scenarios: Assuming 89.2 Million Acres Planted Trend Yields Good Yields Poor Yields Million Bushels

Yield (bu./ acre) 165 173 155 Carryin 1,850 1,850 1,850 Production 13,421 14,166 12,608 Total Supply 15,291 16,036 14,478 Feed & Residual 5,400 5,500 5,200 FSI Non-Fuel 1,410 1,435 1,400 FSI Fuel (Ethanol) 5,200 5,300 4,950 Export 1,750 1,825 1,675 Total Use 13,760 14,060 13,225 Ending Stocks 1,531 1,976 1,253 Price Estimates $4.00 $3.35 $4.75


Soybeans:USDA

3/10/15 Purdue 11/12 12/13 13/14 14/15 15/16 Million Bushels Carryin 215 169 141 92 385 Production 3,094 3,042 3,358 3,969 3,768 Total Supply 3,325 3,252 3,570 4,086 4,173 Seed & Residual 88 105 97 116 120 Crush 1,703 1,689 1,734 1,795 1,830 Exports 1,365 1,317 1,647 1,790 1,830 Total Use 3,156 3,111 3,478 3,701 3,780 Ending Stock 169 141 92 385 393 Farm Price $12.50 $14.40 $13.00 $10.20 $9.50

$9.45-$10.95

Planted: 83.7 84.6 +1.1%


Soybean 2015 Yield Scenarios: Assuming 84.6 Million Acres Planted Trend Yields Good Yields Poor Yields Million Bushels

Yield (bu./ acre) 45.0 48.0 41.0 Carryin 385 385 385 Production 3,768 4,019 3,433 Total Supply 4,173 4,419 3,848 Seed & Residual 120 115 125 Crush 1,830 1,875 1,795 Export 1,830 1,900 1,770

Total Use 3,780 3,890 3,690

Ending Stocks 393 529 158

Price Estimates $9.50 $7.50 $12.50


Old-‐Crop Summary & Strategies 1.  Corn stocks were high and that weakens old crop corn prices. Soybean

stocks at expectaGons.

2.  Expect old-‐crop corn carryout to increase April 9. A lot of old crop sGll in storage, basis may weaken. Old crop probably sideways in the defined winter range.

3.  Smaller than expected 2015 acreage is somewhat encouraging to old crop soybean prices.

4.  Weather the determining factor for next 3-‐4 months


1.  Some added acreage will now shia to soybeans aaer report-‐maybe 1.0 to 1.5 million acres.

2.  Normal weather gives $4.00 corn and $9.50 beans. Are your costs in this area? Consider pricing if harvest prices are at these levels or higher

3.  Low yields can sGll result in reasonably strong price increase to high $4 range for corn and above $12.00 for soybeans

4.  Another high yield year would move toward burdensome surpluses and establish a longer-‐term downturn, to low $3 for corn and mid-‐$7 for beans.

5.  Revenue crop insurance remains an important safety net against low prices and poor yields. But protecGon is much lower than previous years.

6.  Farm Bill: May be very important in supporGng farm incomes and will depend on ulGmate prices, yields, and the program selected.

New-‐Crop Summary & Strategies

crop outlook prospective plantings webinar 4 01 15 final · prices corn beans wheat harvest futures...

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