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Crop Situation and Outlook

Crop Situation and Outlook. Tri County Ag Marketing Club 2009 Grain Marketing Outlook Workshop Grundy Center, Iowa July 23, 2009 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.

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Crop Situation and Outlook

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  1. Crop Situation and Outlook Tri County Ag Marketing Club 2009 Grain Marketing Outlook Workshop Grundy Center, Iowa July 23, 2009 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. U.S. Crop Statistics Source: USDA, Crop Progress

  5. Source: USDA, Weekly Weather and Crop Bulletin

  6. Source: USDA, Weekly Weather and Crop Bulletin

  7. Source: USDA, Weekly Weather and Crop Bulletin

  8. Source: USDA, Weekly Weather and Crop Bulletin

  9. U.S. Crop Conditions Source: USDA, Crop Progress

  10. Corn Yield Estimates Source: USDA, World Ag. Outlook Board

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

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

  13. Source: John Lawrence, ISU Extension

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

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

  16. 2008 U.S. Corn Exports Source: USDA, FAS

  17. 2008 U.S. Soybean Exports Source: USDA, FAS

  18. 2009 Advance Export Sales Source: USDA, FAS

  19. Crude Oil Prices Source: Energy Information Administration

  20. Crude Oil Futures Prices Source: NYMEX

  21. Ethanol Margins Source: ISU, CARD

  22. Biodiesel Margins Source: ISU, CARD

  23. Renewable Fuels Standard (RFS)

  24. Dept. of Energy Projections Source: Energy Information Administration, Annual Energy Outlook 2009

  25. Draft Lifecycle GHG Reductions Source: EPA, May 2009

  26. CARB Fuel Carbon Values Source: CA Air Resources Board, April 2009

  27. Outside Influences (Jan. 2007 = 1)

  28. Ethanol vs. Gasoline

  29. % of Gasoline Blended with Ethanol Source: Energy Information Administration

  30. U.S. Stocks-to-Use Ratios

  31. Corn 1990 - 2006

  32. Corn

  33. Corn

  34. World Stocks-to-Use Ratios

  35. Seasonal Pricing Patterns Source: USDA, NASS, Monthly Price Data 1980-2008

  36. Corn Futures 2009 Rev. Ins. Price $4.04 Source: CBOT, 7/22/09

  37. Soybean Futures 2009 Rev. Ins. Price $8.80 Source: CBOT, 7/22/09

  38. Basis

  39. Climate Change Legislation • American Clean Energy and Security Act of 2009 (H.R. 2454) • Requires utilities to supply an increasing percentage of their demand from a combination of energy efficiency savings and renewable energy (6% in 2012, 9.5% in 2014, 13% in 2016, 16.5% in 2018, and 20% in 2021-2039). • Provides for issuing, trading, banking, retiring, and verifying renewable electricity credits. • Establishes targets to cap and reduce greenhouse gas (GHG) emissions, annually, so that GHG emissions from capped sources are reduced to 97% of 2005 levels by 2012, 83% by 2020, 58% by 2030, and 17% by 2050; and establish a federal GHG registry. • Provides for trading, banking and borrowing, auctioning, selling, exchanging, transferring, holding, or retiring emission allowances. Source: Congressional Research Service

  40. Climate Change Legislation • Agriculture provisions in the bill • Provides some exemptions from the GHG emission reduction requirements for agriculture and forestry • Provides incentive-based approach to GHG emission reduction/capture • Allows USDA to help establish eligible GHG offset practices and review of those practices • Shifts question on indirect-land-use to an independent panel for study with EPA and USDA to review in the future • Allows for a specific exemption for livestock (enteric fermentation from ruminant animals) from uncapped emissions guidelines Source: Craig Raysor, Gillon & Associates, PLLC

  41. Climate Change Legislation Source: FAPRI-Missouri, Report #05-09

  42. Climate Change Legislation “Since farming is energy intensive, it will be hit hard by Waxman-Markey's energy price hikes. In addition to higher diesel fuel and electricity costs, prices for natural gas-derived fertilizers and other chemicals will also rise. Everything else affecting agriculture, from the cost of constructing farm buildings to the price of tractors and other farm equipment, will also go up. Consequently, farm profits are expected to decline by 28 percent in 2012 and will be an average 57 percent lower from 2012-2035.” Source: Ben Lieberman, Heritage Foundation, July, 21, 2009

  43. Climate Change Legislation Source: USDA, Office of Chief Economist “A Preliminary Analysis of the Effects of HR2454 on U.S. Agriculture”

  44. Thoughts for 2009 and Beyond • General economic conditions • Recession concerns still hold significant power in the markets • Projected economic recovery is a major key to steady/higher prices for the 2009 crop year • Most important ag. statistic: Crop yield estimates • USDA is indicating 2009 season-average prices in the neighborhood of $3.75 for corn and $9.30 for soybeans • Current futures Yesterday: Corn $3.00, Soy $8.65

  45. 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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