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Corn, Soybean and Wheat Outlook

Corn, Soybean and Wheat Outlook. 10 Feb 2010 Matthew C. Roberts, Ph.D. What are we talking about?. Corn: Biofuels Exports Domestic Use Soybeans Domestic Use Export Sales Wheat ECB Production Basis Levels. What’s driving all of this?.

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Corn, Soybean and Wheat Outlook

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  1. Corn, Soybean and Wheat Outlook 10 Feb 2010 Matthew C. Roberts, Ph.D.

  2. What are we talking about? • Corn: • Biofuels • Exports • Domestic Use • Soybeans • Domestic Use • Export Sales • Wheat • ECB Production • Basis Levels

  3. What’s driving all of this?

  4. Ethanol Demand to Continue Increasing, But More Slowly. Million Bushels 5200 4300 Year Matthew C. Roberts, AED Economics

  5. Corn Exports slightly higher in 09/10. Million Bushels 2420 2436 2350 2000 1328 1220 510 Year

  6. Feed & residual use is less alarming when DGS are included. MillionBushels 6950 5563 5537 4798 6150 5550 3941 3876 Year

  7. US Corn Situation Production 13.15 Use 13.12 Stocks-to-Use Ratio (%)

  8. Corn Prices are weak.

  9. Corn Prices Are Trying to Find Some Support. • Prices fell out of bed on Jan reports… • But the USDA is resurveying some farmers & some areas—results for March reports. • Feb reports helped provide enough support to find a bottom. • This is why I believe in hedged storage!

  10. Marketing • ‘09: • Prices are likely to be rangebound b/t now and the March reports. • Basis appreciations probably peaks around May-June. • If you have high-vom corn, move ASAP. • Exceptionally good quality corn may be even more valuable later. • For 2010: • Probably not much downside in next 4 weeks, but what about after that??? • Are current prices profitable?

  11. Global soybean inventories are growing. Million Metric Tons Production 255 Use 235 Stocks-to-Use Ratio (%)

  12. US Soybean Demand is Stronger than Expected 1895 1897 Million Bushels Year

  13. Soybean exports remain a bright spot. Million Bushels 1370 1063 929 804 885 589 527

  14. US soybean inventories are moderately tight. Use 3.3 Production 3.36 Stocks-to-Use Ratio (%)

  15. Marketing • ‘09: • I think the bad news is in the market. • Downside risk low until March reports. • What will happen then? • Purchase July $11.00 calls on 20%. • For 2010: • Strengthening dollar, large S.Am supplies will likely keep a lid on prices.

  16. World wheat supplies are continuing to grow. Production 676 Use 644 Stocks-to-Use Ratio (%)

  17. All Wheat Inventories are rising. Stocks/Use Ratio (%)

  18. Wheat Basis remains unstable • Are the CBOT changes helping? • Watch cash forwards, not futures. • SRW plantings lower.

  19. If you would like a copy of this presentation, please email me, citing the date and location of the presentation. Matt Roberts (614) 688-8686 roberts.628@osu.edu http://aede.osu.edu/people/roberts.628 Matthew C. Roberts, AED Economics

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