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Grain Outlook For 2004-05

Grain Outlook For 2004-05. 6/03/2004. Dr. Robert Wisner Iowa State University. Trade-weighted U.S. $ June 04 Up4.3% in three months. Feed Grain Outlook, 2003-04. 4/02/04. Near-Record Low world grain stocks Foreign weather--bad last 2 years China: reduced role as corn exporter?

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Grain Outlook For 2004-05

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  1. Grain Outlook For 2004-05 6/03/2004 Dr. Robert Wisner Iowa State University

  2. Trade-weighted U.S. $ June 04 Up4.3% in three months

  3. Feed Grain Outlook, 2003-04 4/02/04 • Near-Record Low world grain stocks • Foreign weather--bad last 2 years • China: reduced role as corn exporter? • ‘04 plantings—slight corn increase, less sorghum • Strong corn domestic & export demand—longer term implications • Old & new crop prices highly volatile Beans—Old crop more than new

  4. 3/10/04

  5. 10 mm. = 0.38 inches 26 mm. = 1 inch

  6. 10 mm. = 0.38 inches 26 mm. = 1 inch

  7. Cumulative Export Sales, 2003-04 vs. Yr. Ago5/13/04 % Chg.Proj. % Chg. • Corn +30 +29 • Soybean meal -28-29 • Soybean oil -70 -62 • Soybeans -14-14 • All Wheat +40 +37 • Grain Sorghum +6 +13 • New-crop corn sales 26 m.bu. vs. 69 mil. In 1995 & 243 mi. bu. in 1996

  8. China Corn, USDA Export Projections vs. actualProjections too low, except for 1998 OctoberMarch • 2002-03 38% 21% below actual • 2001-02 55% 65% below actual • 2000-01 45% 18% below actual • 1999-00 50% 20% below actual • 1998-99 17% 17% above actual • 1997-98 58% 17% below actual • 1996-97 87% 74% below actual

  9. Inadequate data make China a hard Market to project.

  10. Figure 4. Source: USDA, PSD

  11. Trend yield & 2003 acres would produce 820 mil. Bu. more than USDA projection

  12. IA 65% ILL 79 Ind 82 Mn 57 Ne 64 Wi 57 Mi 47 Ohio 75 Mo 75 SD 72% ND 63 KS 46 Col 79 NC 68 Tx 76 U.S. 68 Yr/Ago 68 Corn Percent Good/Excellent 6/1/04

  13. 400 mm = 15.4 inches; 300mm = 11.5 inches

  14. For discussion of Soybean yield problems, see: http://www.biotech-info.net/first_generation_GMC.pdf

  15. Planted Acreage, Major U.S. Grains, Soybeans, & Cotton, 1997- 2004 Cotton Oats & Barley 250 Sorghum 200 Wheat 150 Mil. Acres Soybeans 100 Corn 50 0 1997 1998 1999 2000 2001 2002 2003 USDA wisner Intentions

  16. On Average, farmers since 1996, planted 0.3% less corn than intended.

  17. Assumes 60% of DDGS replaces corn, 40% replaces SBM

  18. Questions for Corn Use • Tight supplies--which users can out-bid others? • What happens with occasional low U.S. yields? -- 1980, 1983, 1988, 1993, 1995, 2002 • U.S. production shift, beans to corn? • Bring back part of 32 million CRP acres? • Impact on land values & Ag structure? • Impact on export firms? • More investments such as Cargill’s Caribbean ethanol dehydration plant?

  19. How Much Cut in May-Aug. SMB Use in Pork vs. Y/A? • Poultry—record profits: 5-6% cut? • Other non-pork uses: 16-18% cut? • Pork 12-14% cut? • Stocks beyond processors? • Imports above USDA project.?

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