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The Outlook for 2010: Big Crops, Big Demands

The Outlook for 2010: Big Crops, Big Demands. CFNB Crop Insurance Meeting Storm Lake, Iowa Feb. 25, 2010 Chad Hart Assistant Professor/Grain Markets Specialist chart@iastate.edu 515-294-9911. U.S. Corn Supply and Use. Source: USDA. Source: USDA. U.S. Corn Harvest Progress.

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The Outlook for 2010: Big Crops, Big Demands

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  1. The Outlook for 2010: Big Crops, Big Demands CFNB Crop Insurance Meeting Storm Lake, Iowa Feb. 25, 2010 Chad Hart Assistant Professor/Grain Markets Specialist chart@iastate.edu 515-294-9911

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

  3. Source: USDA

  4. U.S. Corn Harvest Progress Source: USDA

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

  6. Source: USDA

  7. U.S. Soybean Harvest Progress Source: USDA

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

  9. World Corn Production Source: USDA

  10. Corn – Argentina & Brazil Source: USDA

  11. World Soybean Production Source: USDA

  12. Soybeans – Argentina & Brazil Source: USDA

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

  14. Cattle Returns vs. Corn Prices Sources: ISU Extension, Yearling Steers; USDA-NASS

  15. 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

  16. Cattle Crush Margin The Crush Margin is the return after the feeder steer and corn costs. Live weight: 1250 pounds Feeder weight: 750 pounds Corn: 50 bushels per head Source: Dr. John Lawrence, ISU Extension

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

  18. Corn Export Sales Source: USDA, FAS

  19. 2009 U.S. Corn Exports Source: USDA, FAS

  20. Soybean Export Sales Source: USDA, FAS

  21. 2009 U.S. Soybean Exports Source: USDA, FAS

  22. Renewable Fuels Standard (RFS)

  23. Ethanol Margins Source: ISU, CARD

  24. Ethanol Blending Advantage

  25. Crude Oil Prices Sources: EIA, NYMEX

  26. Outside Influences (Jan. 2007 = 1)

  27. Corn 1990 - 2006

  28. Corn

  29. Soybeans

  30. Corn Futures Trade Source: CFTC

  31. Soybean Futures Trade Source: CFTC

  32. Iowa Crop Basis

  33. Projected 2009 Season-Average Corn Price

  34. Projected 2009 Season-Average Soy Price

  35. Corn Futures Source: CBOT, 2/23/10

  36. Soybean Futures Source: CBOT, 2/23/10

  37. Feb. Prices on Dec. Corn ’09 Ave. $4.04 ’10 Ave. $3.96, so far

  38. Feb. Prices on Nov. Corn ’10 Ave. $9.21, so far ’09 Ave. $8.80

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

  40. Input Costs Source: USDA, Agricultural Prices, Jan. 29, 2010

  41. Iowa Corn Prices vs. Costs

  42. Iowa Soybean Prices vs. Costs

  43. 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 $3.52, Soy $9.32 • 2010/11: USDA: Corn $3.60, Soy $8.80 Futures: Corn $3.87, Soy $8.94

  44. 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/

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