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GRAIN OUTLOOK Agricultural Lender’s Conference 2006

GRAIN OUTLOOK Agricultural Lender’s Conference 2006. Mike Woolverton Kansas State University mikewool@agecon.ksu.edu. WHEAT. Wheat Estimates, USDA, Oct. 2006. Yield Production U.S. 38.3 1.812 bil. Kansas 32.0 300.8 mil. (40.0) (380.0 mil.) .

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GRAIN OUTLOOK Agricultural Lender’s Conference 2006

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  1. GRAIN OUTLOOKAgricultural Lender’s Conference 2006 Mike Woolverton Kansas State University mikewool@agecon.ksu.edu

  2. WHEAT

  3. Wheat Estimates, USDA, Oct. 2006 YieldProduction U.S. 38.3 1.812 bil. Kansas 32.0 300.8 mil. (40.0) (380.0 mil.)

  4. PRODUCTION PROJECTIONS, U.S., 2006/07 • All Wheat – 1.812 bil. Bu. – down 14% • Hard Winter – 682 mil. Bu. – down 27% • Hard Spring – 432 mil. Bu. – down 7% • Soft Red – 390 mil. Bu. – up 26% • White – 254 mil. Bu. – down 15% • Durum – 53 mil. Bu. - down 48%

  5. 2006 - 2005 HRW Wheat Quality 1 20062005 Test Weight lbs/bu 60.7 60.0 Wheat Protein % 13.9 12.1 Flour Yield 71.0 69.0 Wet Gluten % 33.8 29.5 1 Kansas State University harvest survey of Wheat Sheds in Kansas, Oklahoma, and Texas, Summer 2006, preliminary results.

  6. PRODUCTION PROJECTIONS, MAJOR WHEAT EXPORTERS, 2006/07 (MMT) 2006/072005/06 • EU-25 117.89 (-4%) 122.59 • United States 49.32 (-14%) 57.28 • Canada 26.3 (+1%) 25.98 • Australia 11.0 (-55%) 24.5 • Argentina 13.25 (+6%) 12.5 Total World Prod. 585.14 (-6%) 621.86

  7. Wheat Balance Sheet 04-05 05-06 06-07 Plant A. (mil.) 59.7 57.2 57.3 Harvest A. (mil.) 50.0 50.1 46.8 Bu./A. 43.2 42.0 38.7 Production 2,158 2,105 1,812 Imports 71 82 105 Carryover 546 540 571 Total Supply 2,775 2,727 2,488 Utilization: Feed and Residual 201 200 145 Food 895 915 920 Seed 79 78 80 Exports 1,060 1,009 925 Total Utilization 2,235 2,155 2,070 Carryover 540 (24%) 571 (26%) 418 (20%) U.S. Farm Price $3.40 $3.42 $4.10-$4.60

  8. Current Market Influences - Wheat • Australian Drought (-55%) • Low Carryover • U.S. HRW Quality • Winter Wheat Plantings

  9. CORN

  10. Corn Estimates, USDA, Oct. 2006 YieldBushels U.S. 153.5 10.9 bil. Kansas 125.0 394 mil. (135.0) (465.8 mil.)

  11. Corn Balance Sheet 04-05 05-06 06-07 Plant A. (mil.) 80.9 81.8 78.6 Harvest A. (mil.) 73.6 75.1 71.0 Bu./A. 160.4 147.9 153.5 Production 11,807 11,112 10,905 Imports 11 11 10 Beginning Carryover 958 2,114 1,971 Total Supply 12,776 13,237 12,886 Utilization: Feed and Residual 6,162 6,141 6,100 Food, seed, industrial 2,686 2,975 3,540 Ethanol for fuel 1,323 (11%) 1,600 (14%) 2,150 (20%) Exports 1,814 2,150 2,250 Total Utilization 10,662 11,266 11,890 Ending Carryover 2,114 (20%) 1,971 (17%) 996 (8%) U.S. Farm Price $2.06 $2.00 $2.40-$2.80

  12. Current Market Influences - Corn • Wet Harvest Conditions in Southern and Eastern Corn Belt • Demand from ethanol producers • Strong export demand • Carryover stocks

  13. GRAIN SORGHUM

  14. Sorghum Estimates, USDA, Oct. 2006 YieldProduction U.S. 56.6 301.0 mil. Kansas 60.0 138.0 mil. (75.0) (195.0 mil.)

  15. Sorghum Balance Sheet 04-05 05-06 06-07 Plant A. (mil.) 7.5 6.5 6.3 Harvest A. (mil.) 6.5 5.7 5.3 Bu./A. 69.9 68.7 56.6 Production 454 394 301 Imports 0 0 0 Beginning Carryover 34 57 65 Total Supply 487 451 366 Utilization: Feed and Residual 191 141 100 Food, seed, industrial 55 50 55 Exports 184 195 165 Total Utilization 430 386 320 Ending Carryover 57 (13%) 65 (17%) 46 (14%) U.S. Farm Price $1.79 $1.86 $2.20-$2.60

  16. SOYBEANS

  17. Soybean Estimates, USDA, Oct. 2006 YieldProduction U.S. 42.8 3.189 bil. Kansas 31.0 93 mil. (37.0) (105.5 mil.)

  18. Soybean Balance Sheet 04-05 05-06 06-07 Plant A. (mil.) 75.2 72.0 75.6 Harvest A. (mil.) 74.0 71.3 74.5 Bu./A. 42.2 43.0 42.8 Production 3,124 3,063 3,189 Imports 6 4 4 Beginning Carryover 112 256 449 Total Supply 3,242 3,323 3,641 Utilization: Crushings 1,696 1,739 1,775 Seed 88 93 91 Exports 1,103 948 1,145 Residual 99 95 75 Total Utilization 2,986 2,874 3,086 Ending Carryover 256 (9%) 449 (16%) 555 (18%) U.S. Farm Price $5.74 5.66 $4.90-$5.90

  19. Current Market Influences - Soybeans • Higher than expected yields due to August rains • Large Carryover • Bio-diesel potential • Brazilian plantings

  20. Production of Major Crops, United States and Former Soviet Union, Percentage Change, 2001/02 to 2004/05 U.S.F.S.U. Wheat 11% 6% Corn 24% 125% Soybeans 9% 117% Source: USDA Agricultural Statistics, 2006

  21. Former Soviet Union, Production, 2004/05, KMT CountryWheatCornSoybeans Russia 45,300 3,450 .56 Ukraine 17,500 8,800 .36 Kazakhstan 9,950 - - Moldova - 1,500 - For Comparison: United States 58,738 299,917 85,484 Source: USDA, Agricultural Statistics, 2006.

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