1 / 34

Grain Market Strategies for 2010

Grain Market Strategies for 2010. NE Iowa Ag. Exp. Association Meeting Nashua, Iowa Mar. 17, 2010 Chad Hart Assistant Professor/Grain Markets Specialist chart@iastate.edu 515-294-9911. U.S. Corn Supply and Use. Source: USDA. U.S. Soybean Supply and Use. Source: USDA. Storage Issues.

Rita
Download Presentation

Grain Market Strategies for 2010

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Grain Market Strategies for 2010 NE Iowa Ag. Exp. Association Meeting Nashua, Iowa Mar. 17, 2010 Chad Hart Assistant Professor/Grain Markets Specialist chart@iastate.edu 515-294-9911

  2. U.S. Corn Supply and Use Source: USDA

  3. U.S. Soybean Supply and Use Source: USDA

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

  5. World Corn Production Source: USDA

  6. Corn – Argentina & Brazil Source: USDA

  7. World Soybean Production Source: USDA

  8. Soybeans – Argentina & Brazil Source: USDA

  9. Hog Returns vs. Corn Prices Sources: ISU Extension, Farrow-to-Finish; USDA-NASS

  10. Hog Crush Margin The Crush Margin is the return after the pig, corn and soybean meal costs. Carcass weight: 200 pounds Pig price: 50%of 5 mth out lean hog futures Corn: 10 bushels per pig Soybean meal: 150 pounds per pig Source: Dr. John Lawrence, ISU Extension

  11. Exchange Rates (Jan. 2003 = 1) Source: USDA, ERS

  12. Corn Export Sales Source: USDA, FAS

  13. 2009 U.S. Corn Exports Source: USDA, FAS

  14. Soybean Export Sales Source: USDA, FAS

  15. 2009 U.S. Soybean Exports Source: USDA, FAS

  16. Renewable Fuels Standard (RFS)

  17. Ethanol Margins Source: ISU, CARD

  18. Ethanol Blending Advantage

  19. Crude Oil Prices Sources: EIA, NYMEX

  20. Outside Influences (Jan. 2007 = 1)

  21. Corn 1990 - 2006

  22. Corn

  23. Projected 2009 Season-Average Corn Price

  24. Projected 2009 Season-Average Soy Price

  25. Corn Futures Source: CBOT, 3/16/10

  26. Soybean Futures Source: CBOT, 3/16/10

  27. Ratio: Nov. 2010 Soy/Dec. 2010 Corn Source: CBOT

  28. Input Costs Source: USDA, Agricultural Prices, Feb. 26, 2010

  29. Iowa Corn Prices vs. Costs

  30. Iowa Soybean Prices vs. Costs

  31. Decision Chart Futures Increase • Basis Contract • Sell Cash and Buy Futures • Call Options • Minimum Price Contract, Fixed Basis • Store & Wait to Price • Delayed Price Contract • Minimum Price Contract, Variable Basis Basis Weakens Basis Strengthens Expected Change • Hedge • Hedge to Arrive • Put Options • Cash Sale • Forward Contract Futures Decrease

  32. Pre-Harvest Strategies 56% 52% 52% 52% 72% 68% 68% 68% 72% 68% Source: Farm Futures magazine

  33. Thoughts for 2009/10 and Beyond • General economic conditions • Continued 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 $70’s and lower $80’s • Supply/demand concerns • South America: Record soybean crop and large corn crop • Weather concerns for planting • 2009/10: USDA: Corn $3.60, Soy $9.45 Futures: Corn $3.52, Soy $9.39 • 2010/11: USDA: Corn $3.60, Soy $8.80 Futures: Corn $3.81, Soy $8.94

  34. 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/

More Related