Crop Market Outlook 8/22/ PDF Free Download

MSU is an affirmativeaction, equal-opportunity employer. Michigan State University Extension programs and materials are open to all without regard to race, color, national origin, gender, gender identity, religion, age, height, weight, disability, political beliefs, sexual orientation, marital status, family status or veteran status. Crop Market Outlook Jim Hilker Agricultural, Food, and Resource Economics Department Michigan State University August 22, 2017 1

USDA Reports Cattle On Feed (July 1 numbers, July 21 release) Cattle On Feed (August 1 numbers, August 25 release) Hogs and Pigs (June 1 numbers, June 29 release) Hogs and Pigs (Sept. 1 numbers, Sept. 28 release) Acreage (Early June Survey, June 30 release) Crop Production (Aug. 10, Corn, Wheat, Soybeans) Crop Production (Sept. 12, Corn and Soybeans) Small Grains Summary (Sept. 29 release) Monthly Corn Futures 2

September 2017 Corn Futures 3

U.S. EXPORT SALES FOR WEEK ENDING 8/10/2017 New Crop Weekly Prev Weekly Sales Unshipped Total Year Sales Unshipped --GRAINS-- (in million bushels) Corn 2.5 137.1 2,223.3 1,960.4 26.4 225.9 Sorghum 0.7 9.0 190.9 323.1 0.0 10.7 Soybeans 16.7 187.7 2,248.1 1,939.0 33.0 291.4 All Wheat 23.3 192.3 410.1 411.0 0.0 0.0 Durum 0.0 3.7 7.5 6.4 0.0 0.0 Hard Red Spring 8.0 52.0 110.1 128.9 0.0 0.0 Hard Red Winter 11.7 61.1 149.4 167.0 0.0 0.0 Soft Red Winter 1.3 22.3 41.5 38.7 0.0 0.0 White 2.3 53.1 101.7 70.1 0.0 0.0 --OTHER-- (in thousand metric tons) Soyoil 23.9 84.5 1,108.3 1,161.5 3.0 9.4 Soymeal 74.2 1,310.9 10,222.3 10,503.8 68.8 1,256.1 Sept. ELECTRONIC US DOLLAR INDEX 11

U.S. Dollar Index Monthly 12

Corn Futures 8 18 17 Contract Last Change Sep '17 352-0s +1-4 Dec '17 365-6s +1-4 Mar '18 377-6s +1-4 May '18 384-0s +1-6 Jul '18 390-0s +1-6 Sep '18 394-6s +1-2 Dec '18 402-0s +1-6 Mar '19 410-0s +1-2 May '19 414-6s +1-2 Jul '19 419-4s +1-6 Sep '19 411-2s Dec '19 410-6s +0-2 July 2017 Corn Futures 14

Est. Proj. 2002-2003- 2004-2005- 2006-2007- 2008-2009- 2010-2011- 2012-2013- 2014-2015- 2016-2017- 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 (million acres) Acres Planted 78.9 78.6 80.9 81.8 78.3 93.5 86.0 86.4 88.2 91.9 97.3 95.4 90.6 88.0 94.0 90.9 Acres Harvested 69.3 70.9 73.6 75.1 70.6 86.5 78.6 79.5 81.4 84.0 87.4 87.5 83.1 80.7 86.7 83.5 Yield/Bushels 129.3 142.2 160.4 148 149.1 150.7 153.9 164.7 152.8 147.2 123.1 158.1 171.0 168.4 174.6 169.5 (million bushels) Beginning Stocks 1596 1087 958 2114 1967 1304 1624 1673 1708 1128 989 821 1232 1731 1737 2370 Production 8967 10089 11807 11114 10531 13038 12092 13092 12447 12360 10755 13829 14216 13602 15148 14153 Imports 14 14 11 9 12 20 14 8 28 29 160 36 32 68 55 50 Total Supply 10578 11190 12776 13237 12510 14362 13729 14774 14182 13517 11904 14686 15479 15401 16940 16573 Use: Feed & Residual 5563 5798 6158 6155 5591 5913 5182 5125 4795 4557 4315 5040 5280 5113 5425 5450 Food, Seed & Ind 2340 2537 2686 2981 3490 4387 5025 5961 6426 6428 6038 6493 6601 6650 6920 7000 Ethanol for fuel 996 1168 1323 1603 2119 3049 3709 4591 5019 5000 4641 5124 5200 5224 5450 5500 Total Domestic 7903 8335 8844 9136 9081 10300 10207 11086 11221 10985 10353 11534 11881 11763 12345 12450 Exports 1588 1897 1818 2134 2125 2437 1849 1980 1834 1543 730 1920 1867 1901 2225 1850 Total Use 9491 10232 10662 11270 11206 12737 12056 13066 13055 12528 11083 13454 13748 13664 14570 14300 Ending Stocks 1087 958 2114 1967 1304 1624 1673 1708 1128 989 821 1232 1731 1737 2370 2273 Ending Stocks, %of Use 11.5 9.4 19.8 17.5 11.6 12.8 13.9 13.1 8.6 7.9 7.4 9.2 12.6 12.7 16.3 15.9 U.S. Loan Rate $1.98 $1.98 $1.95 $1.95 $1.95 $1.95 $1.95 $1.95 $1.95 $1.95 $1.95 $1.95 $1.95 $1.95 $1.95 $1.95 U.S. Season Ave Farm Price, $/Bu. $2.32 $2.42 $2.06 $2.00 $3.04 $4.20 $4.06 $3.55 $5.18 $6.22 $6.89 $4.46 $3.70 $3.61 $3.35 $3.30 Source: USDA/WASDE and Jim Hilker. (8-10 - 17) TABLE 1 SUPPLY/DEMAND BALANCE SHEET FOR CORN 8/10/2017 Michigan Supply/Use Balance Sheet for Corn Very Rough Est. Proj. Hilker Corn Marketing Year 2004/052005/06 2006/07 2007/08 2008/09 2009/102010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17 2017/18 Corn Grain Production Thousand Acres Planted Acres 2200 2250 2200 2650 2400 2350 2400 2500 2700 2600 2550 2350 2400 2500 Harvested Acres 1920 2010 1950 2340 2140 2090 2100 2190 2380 2230 2210 2070 2040 2120 Yield bushels/acre 134.0 143.0 147.0 123.0 138.0 148.0 150.0 153.0 132.0 155.0 161.0 162.0 157.0 170.0 Million Bushels Beginning stocks 29.2 38.9 46.0 24.4 32.9 37.8 26.1 25.4 24.9 13.9 35.6 28.0 39.2 36.5 Production 257.3 287.4 286.7 287.8 295.3 309.3 315.0 335.1 314.2 345.7 355.8 335.3 320.3 360.4 Imports 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Total Supply 286.5 326.3 332.7 312.2 328.2 347.1 341.1 360.5 339.0 359.6 391.4 363.3 359.5 396.9 Corn Use Livestock Feed 78.0 78.0 73.0 70.0 71.0 70.0 70.0 70.0 65.0 67.0 67.0 67.0 67.0 67.0 Ethanol 16.0 19.5 67.9 99.0 89.0 101.0 101.0 101.0 101.0 105.0 107.0 107.0 110.0 128.0 Canada for Ethanol 0.0 5.0 8.0 15.0 17.0 18.0 18.0 18.0 15.0 15.0 17.0 15.0 15.0 15.0 Other Exports to Canda 10.0 10.0 5.0 8.0 10.0 10.0 10.0 10.0 10.0 8.0 10.0 10.0 10.0 10.0 Exports, Michigan, to U.S. 138.6 162.8 149.6 82.4 98.4 117.0 111.7 131.6 129.1 123.7 157.4 120.1 116.0 130.0 Other Uses and Residual 5.0 5.0 4.8 4.9 5.0 5.0 5.0 5.0 5.0 5.3 5.0 5.0 5.0 5.0 Total Disapperance 247.6 280.3 308.3 279.3 290.4 321.0 315.7 335.6 325.1 324.0 363.4 324.1 323.0 355.0 Ending Stocks 38.9 46.0 24.4 32.9 37.8 26.1 25.4 24.9 13.9 35.6 28.0 39.2 36.5 41.9 23

USDA Cattle On Feed Fri Jul 21, 2017 02:33 PM CDT USDA Cattle On Feed 07/21 14:10 USDA Actual Average Guess Range Cattle On Feed: On Feed July 1 104.0% 103.0% 102.0-103.5% Placed in June 116.0% 106.0% 103.0-108.0% Marketed in June 104.0% 104.5% 104.0-105.0% 25

Dec 2017 Corn Futures Dec 2017 Futures Price Probability 28

U.S. corn long-term projections Item 2015/16 2016/17 2017/18 2018/19 2019/20 2020/21 2021/22 2022/23 2023/24 2024/25 2025/26 2026/27 Area (million acres): Planted acres 88.0 94.5 90.0 89.5 89.5 88.5 88.0 88.0 87.0 87.0 86.5 86.0 Harvested acres 80.7 86.8 82.3 81.8 81.8 80.8 80.3 80.3 79.3 79.3 78.8 78.3 Yield: Bushels per harvested acre 168.4 175.3 170.8 172.8 174.8 176.8 178.8 180.8 182.8 184.8 186.8 188.8 Supply and use (million bushels): Beginning stocks 1,731 1,738 2,403 2,298 2,213 2,193 2,104 2,033 2,023 1,933 1,923 1,896 Production 13,601 15,226 14,060 14,135 14,300 14,285 14,360 14,520 14,495 14,655 14,719 14,784 Imports 67 50 50 50 50 50 50 50 50 50 50 50 Supply 15,400 17,013 16,513 16,483 16,563 16,528 16,514 16,603 16,568 16,638 16,692 16,730 Feed & residual 5,130 5,650 5,500 5,500 5,600 5,625 5,700 5,800 5,850 5,950 6,025 6,075 Food, seed, & industrial 6,635 6,735 6,765 6,795 6,770 6,775 6,730 6,705 6,685 6,640 6,620 6,595 Ethanol and by-products 5,206 5,300 5,325 5,350 5,325 5,325 5,275 5,250 5,225 5,175 5,150 5,125 Domestic use 11,764 12,385 12,265 12,295 12,370 12,400 12,430 12,505 12,535 12,590 12,645 12,670 Exports 1,898 2,225 1,950 1,975 2,000 2,025 2,050 2,075 2,100 2,125 2,150 2,175 Total use 13,662 14,610 14,215 14,270 14,370 14,425 14,480 14,580 14,635 14,715 14,795 14,845 Ending stocks 1,738 2,403 2,298 2,213 2,193 2,104 2,033 2,023 1,933 1,923 1,896 1,885 Stocks/use ratio, percent 12.7 16.5 16.2 15.5 15.3 14.6 14.0 13.9 13.2 13.1 12.8 12.7 Prices (dollars per bushel): Farm price 3.61 3.30 3.30 3.35 3.35 3.45 3.50 3.55 3.60 3.65 3.65 3.70 Variable costs of production (dollars): Per acre 337 334 329 336 341 347 348 351 357 362 365 367 Returns over variable costs (dollars per acre): Net returns 271 244 234 242 245 263 278 290 301 313 316 331 Note: Marketing year beginning September 1 for corn. WHEAT 29

Monthly Wheat Futures September 2017 Wheat Futures 30

Est. Proj. 2003-2004- 2005-2006- 2007-2008- 2009-2010- 2011-2012- 2013-2014- 2015-2016- 2017-2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 (Million Acres) Acres Planted 62.1 59.7 57.2 57.3 60.5 63.2 59.2 53.6 54.4 55.3 56.2 56.8 55.0 50.2 45.7 Acres Harvested 53.1 50.0 50.1 46.8 51.0 55.7 49.9 47.6 45.7 48.8 45.3 46.4 47.3 43.9 38.1 Bu./Harvested Acre 44.2 43.2 42.0 38.6 40.2 44.9 44.5 46.3 43.7 46.2 47.1 43.7 43.6 52.6 45.6 (Million Bushels) Beginning Stocks 491 546 540 571 456 306 657 976 862 743 718 590 752 976 1184 Production 2345 2158 2105 1808 2051 2499 2218 2207 1999 2252 2135 2026 2062 2310 1739 Imports 68 71 82 122 113 127 119 97 112 123 173 151 113 118 140 Total Supply 2904 2775 2727 2501 2620 2932 2993 3279 2974 3118 3026 2768 2927 3403 3064 Use: Food 907 910 915 938 948 927 919 926 941 951 955 958 957 949 950 Seed 80 78 78 82 88 78 69 71 76 73 77 79 67 61 66 Feed and Residual 212 182 160 117 16 255 150 132 162 364 228 114 149 154 150 Total Domestic 1194 1169 1152 1137 1051 1260 1138 1128 1180 1388 1260 1151 1174 1164 1166 Exports 1159 1066 1003 908 1263 1015 879 1289 1051 1012 1176 864 778 1055 975 Total Use 2353 2235 2155 2045 2314 2275 2018 2417 2231 2400 2436 2015 1951 2219 2141 Ending Stocks 546 540 571 456 306 657 976 862 743 718 590 752 976 1184 933 Ending Stocks, %of Use 23.2 24.2 26.5 22.3 13.2 28.9 48.3 35.7 33.3 29.9 24.2 37.3 50.1 53.4 43.6 U.S. Loan Rate $2.80 $2.75 $2.75 $2.75 $2.75 $2.75 $2.75 $2.75 $2.75 $2.75 $2.75 $2.75 $2.75 $2.75 $2.75 U.S. Season Ave U.S. $/Bu. $3.40 $3.40 $3.42 $4.26 $6.48 $6.78 $4.87 $5.70 $7.24 $7.77 $6.87 $5.99 $4.89 $3.89 $4.80 Source: USDA/WASDE and Jim Hilker (8-10 - 2017) TABLE 2 SUPPLY/DEMAND BALANCE SHEET FOR WHEAT 31

U.S. All Wheat Acres 100,000,000 90,000,000 80,000,000 70,000,000 60,000,000 50,000,000 40,000,000 30,000,000 20,000,000 10,000,000 0 1919 1923 1927 1931 1935 1939 1943 1947 1951 1955 1959 1963 1967 1971 1975 1979 1983 1987 1991 1995 1999 2003 2007 2011 2015 USDA, Acreage 6/30/2017 34

Wheat Futures 8 18 17 Contract Last Change Sep '17 416-0s +2-0 Dec '17 442-4s +1-6 Mar '18 465-2s +1-4 May '18 479-6s +0-4 Jul '18 493-0s +0-2 Sep '18 508-6s +0-4 Dec '18 527-0s +0-4 Mar '19 538-2s +0-4 May '19 536-6s Jul '19 523-0s -2-2 44

September 2017 Wheat Futures Sept 2017 Hard Red Spring Wheat Futures 45

Dec 2017 Wheat Futures December 17 Futures Price Probability 46

U.S. wheat long-term projections Item 2015/16 2016/17 2017/18 2018/19 2019/20 2020/21 2021/22 2022/23 2023/24 2024/25 2025/26 2026/27 Area (million acres): Planted acres 55.0 50.2 48.5 49.0 49.5 49.5 49.5 49.5 49.5 49.5 49.5 49.5 Harvested acres 47.3 43.9 41.1 41.6 42.0 42.0 42.0 42.0 42.0 42.0 42.0 42.0 Yield: Bushels per harvested acre 43.6 52.6 47.1 47.5 47.9 48.3 48.7 49.1 49.5 49.9 50.3 50.7 Supply and use (million bushels): Beginning stocks 752 976 1,143 993 892 832 784 742 707 679 658 654 Production 2,062 2,310 1,936 1,976 2,012 2,029 2,045 2,062 2,079 2,096 2,113 2,129 Imports 113 125 120 125 125 125 130 135 140 145 150 155 Supply 2,927 3,410 3,199 3,094 3,029 2,986 2,959 2,939 2,926 2,920 2,921 2,938 Food 957 963 965 970 975 980 985 990 995 1,000 1,005 1,010 Seed 67 69 66 67 67 67 67 67 67 67 67 67 Feed & residual 152 260 200 190 180 170 170 170 170 170 170 170 Domestic use 1,176 1,292 1,231 1,227 1,222 1,217 1,222 1,227 1,232 1,237 1,242 1,247 Exports 775 975 975 975 975 985 995 1,005 1,015 1,025 1,025 1,035 Total use 1,952 2,267 2,206 2,202 2,197 2,202 2,217 2,232 2,247 2,262 2,267 2,282 Ending stocks 976 1,143 993 892 832 784 742 707 679 658 654 656 Stocks/use ratio, percent 50.0 50.4 45.0 40.5 37.9 35.6 33.5 31.7 30.2 29.1 28.9 28.8 Prices (dollars per bushel): Farm price 4.89 3.70 4.00 4.30 4.50 4.70 4.70 4.80 4.90 5.00 5.00 5.00 Variable costs of production (dollars): Per acre 117 116 115 118 119 122 123 124 126 128 130 131 Returns over variable costs (dollars per acre): Net returns 96 79 74 87 96 105 106 112 116 121 122 123 Note: Marketing year beginning June 1 for wheat. SOYBEAN OUTLOOK 47

Monthly Soybeans Futures September 2017 Soybean Futures 48

T o ta l 8/22/2017 WASDE - 568-15 August 2017 U.S. Soybeans and Products Supply and Use (Domestic Measure) 1/ SOYBEAN OIL 2015/1 2016/17 Est. 2017/18 Proj. Jul Million Pounds Beginning Stocks 1855 1687 2097 Production 4/ 21950 21945 22620 Imports 287 350 325 Supply, Total 24092 23982 25042 Domestic Disappearance 20162 19600 20450 Biodiesel 3/ 5670 6000 6450 Food, Feed & other Industrial 14492 13600 14000 Exports 2243 2400 2300 Use, Total 22405 22000 22750 Ending stocks 1687 1982 2292 Avg. Price (c/lb) 2/ 29.86 32.5 30.00-34.00 2017/18 Proj. Aug 1982 22505 325 24812 20450 6450 14000 2300 22750 2062 31.00-35.00 Historical Biodiesel Operating Margins 50

T o ta l 8/22/2017 WASDE - 568-15 U.S. Soybeans and Products Supply and Use (Domestic Measure) 1/ SOYBEAN MEAL 2015/1 2016/17 Est. 2017/18 Proj. Jul Thousand Short Tons Beginning Stocks 260 264 300 Production 4/ 44672 44361 46300 Imports 403 350 300 Supply, Total 45336 44975 46900 Domestic Disappearance 33118 33050 34200 Exports 11954 11600 12400 Use, Total 45072 44650 46600 Ending Stocks 264 325 300 Avg. Price ($/s.t.) 2/ 324.56 320 300.00-340.00 2017/18 Proj. Aug 325 46075 300 46700 34200 12200 46400 300 295.00-335.00 Note: Totals may not add due to rounding. Reliability calculations at end of report. 1/ Marketing year beginning September 1 for soybeans; October 1 for soybean oil and soybean meal. 2/ Prices: soybeans, Sept 2017 Soybean Futures 51

Sept 2017 Soymeal Futures July 2017 Soyoil Futures 52

December 2017 Soymeal Futures Dec 2017 Soymeal Futures Price Prob. 53

B e g in n in g S to c k s B e g in n in g S to c k s P ro d u c tio n Im p o rts D o m e stic P ro d u c tio n Im p o rts D o m e stic C ru sh C ru sh D o m e stic T o ta l D o m e stic T o ta l E xp o rts E xp o rts E n d in g S to c k s E n d in g S to c k s 8/22/2017 2017/18 Proj. World 2/ Jul 94.78 345.09 148.6 302.23 345.27 149.66 93.53 Aug 96.98 347.36 147.96 300.46 343.32 151.19 97.78 2017/18 Proj. World 2/ Jul 94.78 345.09 148.6 302.23 345.27 149.66 93.53 Aug 96.98 347.36 147.96 300.46 343.32 151.19 97.78 United States Jul 11.17 115.94 0.68 53.07 56.75 58.51 12.53 Aug 10.08 119.23 0.68 52.8 56.5 60.56 12.94 Total Foreign Jul 83.61 229.15 147.92 249.16 288.53 91.15 81 Aug 86.9 228.13 147.28 247.66 286.82 90.64 84.84 Major Exporters Jul 59.41 176.4 1.72 91.65 99.92 80.85 56.76 3/ Aug 62.57 176.4 1.72 90.99 99.26 80.35 61.08 Argentina Jul 33.1 57 1.5 45.5 50 8.5 33.1 Aug 35.55 57 1.5 44.84 49.34 8 36.71 Brazil Jul 25.82 107 0.2 42 45.7 64 23.32 Aug 26.52 107 0.2 42 45.7 64 24.02 Paraguay Jul 0.37 9.4 0.01 3.95 4 5.5 0.28 Aug 0.37 9.4 0.01 3.95 4 5.5 0.28 Major Importers Jul 21.1 17.89 125.17 119.42 142.93 0.38 20.85 4/ Aug 21.24 17.97 125 119.23 142.74 0.4 21.07 China Jul 19.16 14 94 92.5 108.1 0.15 18.91 Aug 19.19 14 94 92.5 108.1 0.15 18.94 European Union Jul 0.81 2.45 14.8 15.4 17.04 0.2 0.82 Aug 0.78 2.53 14.6 15.2 16.84 0.2 0.87 Japan Jul 0.24 0.26 3.3 2.35 3.51 0 0.29 Aug 0.24 0.26 3.3 2.35 3.51 0 0.29 Mexico Jul 0.12 0.42 4.3 4.72 4.76 0 0.09 Aug 0.12 0.42 4.3 4.72 4.76 0 0.09 57

Soybean Futures 8 18 17 Contract Last Change Sep '17 937-4s +7-2 Nov '17 937-6s +4-6 Jan '18 945-6s +4-4 Mar '18 953-6s +4-2 May '18 960-6s +4-0 Jul '18 966-6s +3-6 Aug '18 967-2s +3-4 Sep '18 958-6s +2-4 Nov '18 951-2s +1-0 Jan '19 955-6s +0-6 Mar '19 958-0s +0-6 Est. Proj. 2002-2003- 2004-2005- 2006-2007- 2008-2009- 2010-2011- 2012-2013- 2014-2015- 2016-2017- 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 (Million Acres) Acres Planted 74 73.4 75.2 72 75.5 64.7 75.7 77.5 77.4 75.0 77.2 76.8 83.3 82.7 83.4 89.5 Acres Harvested 72.5 72.3 74.0 71.3 74.6 64.1 74.7 76.4 76.6 73.8 76.1 76.3 82.6 81.7 82.7 88.7 Yield/Bushels 38.0 33.9 42.2 43.0 42.9 41.7 39.7 44.0 43.5 41.9 40.0 44.0 47.5 48.0 52.1 49.4 (Million Bushels) Beginning Stocks 208 178 112 256 449 574 205 138 151 215 169 141 92 191 197 371 Production 2756 2454 3124 3063 3197 2677 2967 3359 3329 3094 3042 3358 3927 3926 4307 4381 Imports 5 6 6 3 9 10 13 15 14 16 41 72 33 24 25 25 Total Supply 2969 2638 3242 3322 3656 3261 3185 3512 3495 3325 3252 3570 4052 4140 4529 4777 Use: Crushings 1615 1530 1696 1739 1808 1803 1662 1752 1648 1703 1689 1734 1873 1886 1890 1940 Exports 1045 885 1097 940 1116 1159 1279 1499 1501 1365 1317 1638 1842 1942 2150 2225 Seed 89 92 88 93 80 93 90 90 87 90 89 97 96 97 104 101 Residual 41 19 105 101 77 0 16 20 43-2 16 10 50 18 14 35 Total Use 2791 2526 2986 2873 3081 3056 3047 3361 3280 3155 3111 3478 3862 3944 4158 4301 Ending Stocks 178 112 256 449 574 205 138 151 215 169 141 92 191 197 371 475 Ending Stocks, %of Use 6.4 4.4 8.6 15.6 18.6 6.7 4.5 4.5 6.5 5.4 4.5 2.6 4.9 5.0 8.9 11.1 U.S. Loan Rate $5.00 $5.00 $5.00 $5.00 $5.00 $5.00 $5.00 $5.00 $5.00 $5.00 $5.00 $5.00 $5.00 $5.00 $5.00 $5.00 U.S. Season Ave Farm Price, $/Bu. $5.53 $7.34 $5.74 $5.66 $6.43 $10.10 $9.97 $9.59 $11.30 $12.50 $14.40 $13.00 $10.10 $8.95 $9.50 $9.30 Source: USDA/WASDE and Jim Hilker. (8-10 - 17) TABLE 3 SUPPLY/DEMAND BALANCE SHEET FOR SOYBEANS 59

Est. Proj. 2002-2003- 2004-2005- 2006-2007- 2008-2009- 2010-2011- 2012-2013- 2014-2015- 2016-2017- 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 (Million Acres) Acres Planted 74 73.4 75.2 72 75.5 64.7 75.7 77.5 77.4 75.0 77.2 76.8 83.3 82.7 83.4 89.5 Acres Harvested 72.5 72.3 74.0 71.3 74.6 64.1 74.7 76.4 76.6 73.8 76.1 76.3 82.6 81.7 82.7 88.7 Yield/Bushels 38.0 33.9 42.2 43.0 42.9 41.7 39.7 44.0 43.5 41.9 40.0 44.0 47.5 48.0 52.1 49.4 (Million Bushels) Beginning Stocks 208 178 112 256 449 574 205 138 151 215 169 141 92 191 197 371 Production 2756 2454 3124 3063 3197 2677 2967 3359 3329 3094 3042 3358 3927 3926 4307 4381 Imports 5 6 6 3 9 10 13 15 14 16 41 72 33 24 25 25 Total Supply 2969 2638 3242 3322 3656 3261 3185 3512 3495 3325 3252 3570 4052 4140 4529 4777 Use: Crushings 1615 1530 1696 1739 1808 1803 1662 1752 1648 1703 1689 1734 1873 1886 1890 1940 Exports 1045 885 1097 940 1116 1159 1279 1499 1501 1365 1317 1638 1842 1942 2150 2225 Seed 89 92 88 93 80 93 90 90 87 90 89 97 96 97 104 101 Residual 41 19 105 101 77 0 16 20 43-2 16 10 50 18 14 35 Total Use 2791 2526 2986 2873 3081 3056 3047 3361 3280 3155 3111 3478 3862 3944 4158 4301 Ending Stocks 178 112 256 449 574 205 138 151 215 169 141 92 191 197 371 475 Ending Stocks, %of Use 6.4 4.4 8.6 15.6 18.6 6.7 4.5 4.5 6.5 5.4 4.5 2.6 4.9 5.0 8.9 11.1 U.S. Loan Rate $5.00 $5.00 $5.00 $5.00 $5.00 $5.00 $5.00 $5.00 $5.00 $5.00 $5.00 $5.00 $5.00 $5.00 $5.00 $5.00 U.S. Season Ave Farm Price, $/Bu. $5.53 $7.34 $5.74 $5.66 $6.43 $10.10 $9.97 $9.59 $11.30 $12.50 $14.40 $13.00 $10.10 $8.95 $9.50 $9.30 Source: USDA/WASDE and Jim Hilker. (8-10 - 17) TABLE 3 SUPPLY/DEMAND BALANCE SHEET FOR SOYBEANS 8/10/2017 Michigan Supply/Use Balance Sheet for Soybeans Very Rough Est. Proj. Proj. Soybean Marketing Year 2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17 2017/18 Soybean Production Thousand Acres Planted Acres 2000 2000 2000 1800 1900 2000 2050 1950 2000 1930 2050 2030 2070 2300 Harvested Acres 1980 1990 1990 1790 1890 1990 2040 1940 1990 1920 2040 2020 2060 2290 Yield bushels/acre 38.0 38.5 46.0 40.0 37.0 40.0 43.5 44.0 43.0 44.5 42.5 49.0 50.5 49.0 Million Bushels Beginning stocks 5.0 8.3 10.9 7.1 4.3 4.6 5.6 5.5 3.9 2.0 2.1 4.5 4.5 5.0 Production 75.2 76.6 91.5 71.6 69.9 79.6 88.7 85.4 85.6 85.4 86.7 99.0 104.0 112.2 Total Supply 80.2 84.9 102.4 78.7 74.3 84.2 94.3 90.9 89.4 87.4 88.8 103.5 108.6 117.2 Total Disapperance 71.9 74.0 95.4 74.3 69.7 78.6 88.8 87.0 87.4 85.3 84.3 99.0 103.6 111.7 Ending Stocks 8.3 10.9 7.1 4.3 4.6 5.6 5.5 3.9 2.0 2.1 4.5 4.5 5.0 5.5 Source: USDA and Jim Hilker 64

Soybean Futures 8 18 17 Contract Last Change Sep '17 937-4s +7-2 Nov '17 937-6s +4-6 Jan '18 945-6s +4-4 Mar '18 953-6s +4-2 May '18 960-6s +4-0 Jul '18 966-6s +3-6 Aug '18 967-2s +3-4 Sep '18 958-6s +2-4 Nov '18 951-2s +1-0 Jan '19 955-6s +0-6 Mar '19 958-0s +0-6 May '19 956-6s Jul '19 962-2s Aug '19 960-0s Sep '19 954-2s Nov '19 944-4s -0-2 Jul '20 958-6s Nov '20 939-2s Nov 2017 Soybean Futures 66

Nov 2017 Soybean Futures Price Prob. March 2017 Soybean Futures 67

March 2017 Soybean Futures Price Prob. U.S. soybeans and soybean products long-term projections Item 2015/16 2016/17 2017/18 2018/19 2019/20 2020/21 2021/22 2022/23 2023/24 2024/25 2025/26 2026/27 Soybeans Area (million acres): Planted 82.7 83.7 85.5 85.0 84.5 84.5 85.0 85.0 85.0 85.0 85.0 85.0 Harvested 81.7 83.0 84.6 84.1 83.6 83.6 84.1 84.1 84.1 84.1 84.1 84.1 Yield, bushels per harvested acre 48.0 52.5 47.9 48.4 48.9 49.4 49.9 50.4 50.9 51.4 51.9 52.4 Supply (million bushels) Beginning stocks, September 1 191 197 480 396 326 306 291 300 309 317 330 338 Production 3,926 4,361 4,050 4,070 4,090 4,130 4,195 4,240 4,280 4,325 4,365 4,405 Imports 24 30 30 30 30 30 30 30 30 30 30 30 Total supply 4,140 4,588 4,560 4,496 4,446 4,466 4,516 4,570 4,619 4,672 4,725 4,773 Use (million bushels) Crush 1,886 1,930 1,935 1,955 1,970 1,990 2,015 2,040 2,060 2,085 2,105 2,130 Seed and residual 121 128 130 129 130 130 131 131 132 132 132 132 Exports 1,936 2,050 2,100 2,085 2,040 2,055 2,070 2,090 2,110 2,125 2,150 2,150 Total use 3,943 4,108 4,165 4,169 4,140 4,175 4,216 4,261 4,302 4,342 4,387 4,412 Ending stocks, August 31 Total ending stocks 197 480 396 326 306 291 300 309 317 330 338 361 Stocks/use ratio, percent 5.0 11.7 9.5 7.8 7.4 7.0 7.1 7.2 7.4 7.6 7.7 8.2 Prices (dollars per bushel) Soybean price, farm 8.95 9.20 9.35 9.40 9.40 9.45 9.45 9.50 9.55 9.55 9.55 9.55 Variable costs of production (dollars): Per acre 174 173 173 176 178 181 182 184 187 189 191 192 Returns over variable costs (dollars per acre): Net returns 256 310 275 279 282 286 289 295 300 302 305 308 68

Thanks Questions/Discussion Jim Hilker s Web Page http://www.msu.edu/user/hilker/ MSU is an affirmative action, equal opportunity employer. Michigan State University Extension programs and materials are open to all without regard to race, color, national origin, gender, gender identity, religion, age, height, weight, disability, political beliefs, sexual orientation, marital status, family status or veteran status. 69

Crop Market Outlook 8/22/2017