2016 grains & oilseeds outlook the global outlook remains ... · chinese meat consumption 90-15...

Matthew C. Robertshttp://aede.osu.edu/people/roberts.628

12/7/2015

www.matthewcroberts.com 1

2016 Grains & Oilseeds Outlook

Matthew C. [email protected]

The global outlook remains positive.


www.matthewcroberts.com 3 www.matthewcroberts.com 4


12/7/2015


Chinese Meat Consumption 90-15

5

0102030405060708090

1975

1978

1981

1984

1987

1990

1993

1996

1999

2002

2005

2008

2011

2014

Million Metric

Tonn

es

CATTLE SWINE BROILER

Chinese Oilseed Consumption Growing by 9.8%/yr since 1990


020406080

100120140160

1990/1991

1991/1992

1992/1993

1993/1994

1994/1995

1995/1996

1996/1997

1997/1998

1998/1999

1999/2000

2000/2001

2001/2002

2002/2003

2003/2004

2004/2005

2005/2006

2006/2007

2007/2008

2008/2009

2009/2010

2010/2011

2011/2012

2012/2013

2013/2014

2014/2015

Cottonseed Peanut Rapeseed

Sunflowerseed Soybean

Chinese Grain Consumption Climbing by 4%/year since 2006.


0

100

200

300

400

500

600

1990/1991

1991/1992

1992/1993

1993/1994

1994/1995

1995/1996

1996/1997

1997/1998

1998/1999

1999/2000

2000/2001

2001/2002

2002/2003

2003/2004

2004/2005

2005/2006

2006/2007

2007/2008

2008/2009

2009/2010

2010/2011

2011/2012

2012/2013

2013/2014

2014/2015

Rice, Milled Wheat Corn

But demand isn’t everything.• Chinese de-stocking of corn?• Argentine de-stocking of grains?• Two years of very good SouthAm weather.

– Strongest El Nino on record…



12/7/2015


Crude & Nat Gas Markets Remain Very Weak

• Strong US production growth outstripping demand growth.

• Saudi Arabia is unwilling to act.• But drilling has declined substantially

– US oil production declined in Sept vs. Oct.


Global Oil Consumption Continues to Climb


Forecast

-2

-1

0

1

2

3

4

5

6

7

8

9

767880828486889092949698

2008 2009 2010 2011 2012 2013 2014 2015 2016

World Liquid Fuels Consumptionmillion barrels per day (MMbbl/d)

Change in U.S. consumption (right axis)

Change in China consumption (right axis)

Change in other consumption (right axis)

Total world consumption (left axis)

annual change (MMbbl/d)

Source: Short-Term Energy Outlook, October 2015.


-0.5

0.0

0.5

1.0

1.5

2.0

2.5

2014 2015 2016

OPEC countries North America Russia and Caspian Sea

Latin America North Sea Other Non-OPEC

World Crude Oil and Liquid Fuels Production Growthmillion barrels per day


Forecast



12/7/2015



Forecast

275

300

325

350

375

400

425

450

475

500

Jan 2010 Jan 2011 Jan 2012 Jan 2013 Jan 2014 Jan 2015 Jan 2016

U.S. Commercial Crude Oil Stocksmillion barrels


Note: Colored band around storage levels represents the range between the minimum and maximum from Jan. 2010 - Dec. 2014.



Forecast

60

80

100

120

140

160

180

200

220

240

260

Jan 2010 Jan 2011 Jan 2012 Jan 2013 Jan 2014 Jan 2015 Jan 2016

U.S. Gasoline and Distillate Inventoriesmillion barrels


Note: Colored bands around storage levels represent the range between the minimum and

Total motor gasoline inventory

Total distillate fuel inventory



12/7/2015



Oil Prices will remain weak• ME uncertainty now generally away from

oil-producing areas.• Declines in US production will start to be

felt in 2/3Q2016– Prices to $50-60 only.


2015 EPA Rulemaking Has Smaller CutsCalendarYear

Total Convent’lBiofuel

(min20%GHG reducafter2010)

AdvancedBiofuel

(min50%GHGreduction)

CellulosicBiofuel

(min60%GHGreduction)

BiobasedDiesel

2009 11.10 10.50 0.60 ‐ 0.50

2010 12.95 12.00 0.95 0.10 0.65

2011 13.95 12.60 1.35 0.25 0.80

2012 15.20 13.20 2.00 0.50 1.00

2013 16.55 13.80 2.75 1.00 1.28

2014 18.15 14.40 3.75 1.75 1.28

2015 20.50 15.00 5.50 3.00 1.28

2016 20.50 15.00 5.50 3.00 1.28

2017 20.50 15.00 5.50 3.00 1.2819

0.006

0.0332.6716.28 13.61

0.003

0.001

0.001

14.05

14.5016.93

18.11

2.88

3.61

0.123

0.230

1.63

1.73

1.90

2.00n/an/an/a n/a

Ethanol Production Has Always Exceeded Mandates

Matthew C. Roberts, AED Economics 20

0500

10001500200025003000350040004500500055006000

'00 '05 '10 '15

5175

Million Bushels

Year


12/7/2015


How Fast Will Feed Use Grow?

30003500400045005000550060006500700075008000 Million Bushels

Year

5537

6150

3876 3941

5563 5300

6335

6646

Corn Exports

0

500

1000

1500

2000

2500

3000

70 75 80 85 90 95 '00 '05 '10 '15

Mill

ion

Bus

hels

2420

1220 1328

2350

700

Year

510

2436

1800

2013-2015: Three Highest Production Years, Yet…

02468101214

0102030405060708090

100

Bill

ion

Bus

hels

Percent

Year

Production 13.66

Use 13.66

Stocks-to-Use Ratio (%)



12/7/2015


Corn Prices Can’t Catch a Break.

• Best hope for higher prices is continued S.Am weather declines.

• De-stocking creates huge uncertainty…– Temporarily

• Storage gains are best opportunities• 2016/17—strong demand remains in

place.


Soybeans Domestic Demand Flat

0

500

1,000

1,500

2,000

2,500

1970 1975 1980 1985 1990 1995 '00 '05 '10 '15Year

Mill

ion

Bus

hels 2003

1956

Soy exports off 130m.

400

600

800

1,000

1,200

1,400

1,600

1,800

2,000

1970 1975 1980 1985 1990 1995 '00 '05 '10 '15

Million Bushels

929804 885

589527

1063

1715

Record Soybean Production, Weak Exports Leave Large Stocks

28.0

21.0

15.0

11.0

13.0 18

.013

.613

.410

.7 14.0

7.8

5.4 7.6 13

.410

.78.

87.

16.

44.

4 8.6 15

.6 18.6

6.7

4.5

4.5 6.6

5.4

4.5

2.6 4.9 12

.4

1

1.5

2

2.5

3

3.5

4

0102030405060708090

100

Bn

Bus

hels

Perc

ent

Year

Production 3.92

Use 3.7



12/7/2015


Global Soybean Production & Use Remains Incredible

1925

1919182019171714

1813

91516171817

21202325

2823

192527

2323272627

50

100

150

200

250

300

350

0

10

20

30

40

50

60

70Percent

Year

Production 320

Use 310

Million Metric Tons


Soybeans have staged small rally into December

• The EPA taketh away and the EPA giveth.• Brazilian weather continues to decline


Corn Competition Bites into US Wheat Demand

0

0.5

1

1.5

2

2.5

3

0102030405060708090

100Billion

BushelsPercent

Year

Production 2.05

Use 2.02


Plan on low prices…• $3.50 corn• $9.00 soybeans• $5.00 wheat

• Build working capital– Pay taxes.– Lower land costs.– Fix interest rates.



12/7/2015


www.matthewcroberts.com 33 www.matthewcroberts.com 34

Matt Roberts(614) 688-8686

[email protected]://aede.osu.edu/people/roberts.628

Twitter: @YourEconProf

Questions?

2016 grains & oilseeds outlook the global outlook remains ... · chinese meat consumption 90-15...

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