Download - Grain Outlook For 2004-05
Grain Outlook For 2004-05Grain Outlook For 2004-05Grain Outlook For 2004-05Grain Outlook For 2004-05
Dr. Robert WisnerDr. Robert WisnerIowa State UniversityIowa State University
Dr. Robert WisnerDr. Robert WisnerIowa State UniversityIowa State University
6/03/2004
Trade-weighted U.S. $ June 04
Up4.3% in three months
Feed Grain Outlook, 2003-04
• Near-Record Low world grain stocks • Foreign weather--bad last 2 years• China: reduced role as corn
exporter?• ‘04 plantings—slight corn increase,
less sorghum• Strong corn domestic & export
demand—longer term implications• Old & new crop prices highly volatile
Beans—Old crop more than new
4/02/04
3/10/04
10 mm. = 0.38 inches26 mm. = 1 inch
10 mm. = 0.38 inches26 mm. = 1 inch
Cumulative Export Sales, 2003-04 vs. Yr. Ago
5/13/04 % Chg. Proj. % Chg.•Corn +30 +29• Soybean meal -28 -29• Soybean oil -70 -62• Soybeans -14 -14•All Wheat +40 +37•Grain Sorghum +6 +13• New-crop corn sales 26 m.bu. vs. 69 mil. In 1995 & 243 mi. bu. in 1996
China Corn, USDA Export Projections vs. actual
Projections too low, except for 1998
October March
• 2002-03 38% 21% below actual• 2001-02 55% 65% below actual• 2000-01 45% 18% below actual• 1999-00 50% 20% below actual• 1998-99 17% 17% above actual• 1997-98 58% 17% below actual• 1996-97 87% 74% below actual
Figure 1. China Gross Corn Imports & USDA Projections
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10
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1961 1966 1971 1976 1981 1986 1991 1996 2001 2006
Mil
. M
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ic T
on
s
1997 1998 1999 2000 Actual
1 metric ton = 39.4 bushels
Inadequate data make China a hardMarket to project.
China corn yield & area harvested
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1961 1966 1971 1976 1981 1986 1991 1996 2001
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Acr
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Mil. A
cres
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Area Harvested
(Trend yield & 2003 Harv. A. = 135.8 Mil. Tons)
Figure 4.
Source: USDA, PSD
China corn production & area harvested
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1000.0
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1961 1966 1971 1976 1981 1986 1991 1996 2001
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Bu.
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Acr
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Corn Production
Area Harvested
Trend yield & 2003 acres would produce 820 mil. Bu. more than USDA projection
Corn Percent Good/Excellent 6/1/04
IA 65%ILL 79Ind 82Mn 57Ne 64Wi 57Mi 47 Ohio 75Mo 75
SD 72%ND 63KS 46Col 79NC 68 Tx 76 U.S. 68 Yr/Ago 68
400 mm = 15.4 inches; 300mm = 11.5 inches
U.S. CORN PLANTING PROGRESS, SELECTED YEARS AND NORMAL
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APRIL2
APRIL3
APRIL4
MAY 1 MAY 2 MAY 3 MAY 4 JUNE 1 JUNE 2
Weeks
Per
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ted
1999
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1999-03 Normal
2004
2000
U.S Yield % dev iat. from trend1983 -27.41984 +1.4 1993 -21.41995 -11.001996 -0.61999 +0.2 2000 +1.02001 +0.62002 -6.72003 +0.82004 trend: 143 bu.
For discussion of Soybean yield problems, see: http://www.biotech-info.net/first_generation_GMC.pdf
Figure 1. Total Planted Acreage of Major U.S. Grains, Cotton, and Soybeans, 1997-2004
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215
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1997 1998 1999 2000 2001 2002 2003 2004
Mil.
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Planted Acreage, Major U.S. Grains, Soybeans, & Cotton, 1997-2004
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wisner
USDA
Inte
ntions
Mil.
Acr
es
Cotton
Oats & Barley
Sorghum
Wheat
Soybeans
Corn
On Average, farmers since 1996, planted 0.3% less corn than intended.
Assumes 60% of DDGS replaces corn, 40% replaces SBM
Questions for Corn Use• Tight supplies--which users can out-bid
others? • What happens with occasional low U.S. yields? -- 1980, 1983, 1988, 1993, 1995, 2002 • U.S. production shift, beans to corn? • Bring back part of 32 million CRP acres?• Impact on land values & Ag structure?• Impact on export firms?• More investments such as Cargill’s Caribbean ethanol dehydration plant?
How Much Cut in May-Aug. SMB Use in Pork vs. Y/A?
• Poultry—record profits: 5-6% cut?
• Other non-pork uses: 16-18% cut?
• Pork 12-14% cut?• Stocks beyond processors?• Imports above USDA project.?
For discussion of Soybean yield problems, see:
http://www.biotech-info.net/first_generation_GMC.pdf
•Very Low world grain reserve•Global grain exports may increase substantially -- if yields recover from 02 & 03 •China: a major uncertainty•Old crop corn export sales strong to Aug.•Ethanol expansion to continue strong, limiting future export growth potential•Charts: $3.26, $3.35, $3.70 if weather problem•Corn, wheat, protein meal prices explosive if major weather problems•Significant downside risk in summer, fall•Nov. SB gaps: $6.67, $6.57, $6.24
Key Points
http://www.econ.iastate.edu/faculty/wisner/