What Does the March Prospective Plantings Report Mean for the 2014-2015 Outlook? Chris Hurt & Corinne Alexander hurtc@purdue.edu cealexan@purdue.edu Purdue University April 1, 2014" Webinar: April 1, 2014
Questions: E-mail to: jmintert@purdue.edu Webinar: April 1, 2014
Stocks Situation Stocks March 1 Expectation (Dow Jones Survey) Difference Corn: Bullish Soybeans Neutral Wheat: Neutral ------------- Million Bushels ------------------ 7,006 7,110-104 992 989 +3 1,056 1,036 +20 Webinar: April 1, 2014
Corn, Soybean, Wheat Planted Acres 95.9 95 90 85 2014 Corn -3.9% Beans +6.5% Wheat -0.6% 91.7 81.5 Million Acres 80 75 70 73.9 65 60 55 Corn Soybeans 55.9 55.8 50 Wheat 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14
2014 vs.13 2014 vs 13 U.S. Planted Acres (1,000acres) Acreage % 11 12 13 14 Change Change Corn 91,936 97,155 95,365 91,691-3,674-3.9% Soybeans 75,046 77,198 76,533 81,493 4,960 6.5% Wheat 54,409 55,666 56,156 55,815-341 -0.6% Cotton 14,735 12,314 10,407 11,101 694 6.7% Sorghum 5,481 6,244 8,061 6,681-1,380-17.1% Oats 2,496 2,760 3,010 2,794-216 -7.2% Barley 2,559 3,637 3,480 3,165-315 -9.1% Rice 2,689 2,700 2,489 2,877 388 15.6% Sunflower 1,543 1,919 1,576 1,592 17 1.1% Sum 9 250,894 259,593 257,077 257,209 133 0.1%
Webinar: April 1, 2014
Estimated Variable Cost Per Acre: Average Quality Indiana Land (163 bu corn, 54 beans, 70 wheat)" 500 450 400 350 425 342 387 461 462 432 2009 2010 2011 2012 2013 300 250 200 150 223 183 230 239 228 204 194 194 169203 149 2014 181 100 50 0 Rotation CORN Rotation BEANS WHEAT Webinar: April 1, 2014
2012 Estimated Crop Budget: Indiana: March 31, 2014 Prices Corn Beans Wheat Harvest Futures 2014 $4.98 $11.87 $6.27 Expected Basis -0.25-0.30-0.35 Expected Cash Price $4.73 $11.57 $6.67 Continuous Corn Estimated Yield/Acre and Returns/Acre Above Variable Costs Rotation Single-Crop Rotation Corn Soybeans Wheat Land Quality bu./acre $/acre bu./acre $/acre bu./acre $/acre bu./acre $/acre Low 122 $166 130 $223 40 $248 56 $211 Average 153 $272 163 $339 50 $351 70 $286 High 184 $408 196 $483 60 $454 84 $359 Budget: Purdue ID-166 (January 2014) Webinar: April 1, 2014
New Crop Futures March 3 March 31 Change Corn $4.71 $4.98 +$.27 Soybeans $11.64 $11.84 +$.20 Returns Per Acre Returns Above Variable Costs March 1 March 31 Change Corn $295 $339 +$44/a Soybeans $339 $351 +$12/a Beans > Corn $44 $12 Webinar: April 1, 2014
Crop Insurance Prices 14 Crop Insure Price 4-1-14 Dec/Nov Futures Protected Revenue Corn $4.62 $5.02 $640 Soybeans $11.36 $11.94 $521 Protected Revenue calculation assumes average quality land in Indiana, and Coverage level of 85% Webinar: April 1, 2014
Corn: USDA 3/10/14 10/11 11/12 12/13 13/14 14/15 Million Bushels Purdue Planted: 95.4 91.7-3.9% Carryin 1,708 1,128 989 821 1,356 Production 12,447 12,358 10,780 13,925 13,721 Total Supply 14,182 13,514 11,932 14,781 15,102 Feed & Residual 4,792 4,547 4,336 5,225 5,450 FSI Non-Fuel 1,406 1,426 1,396 1,400 1,425 FSI Fuel (Ethanol) 5,021 5,011 4,648 5,075 5,050 Export 1,835 1,541 731 1,725 1,750 Total Use 13,054 12,525 11,111 13,425 13,675 Ending Stocks 1,128 989 821 1,356 1,427 US Farm Price $5.18 $6.22 $6.89 $4.65 $4.60 $4.40- $3.60- $4.90 $5.60 Webinar: April 1, 2014
Corn 2014 Yield Scenarios: Assuming 91.7 Million Acres Planted Trend Yields Good Yields Poor Yields Million Bushels Yield (bu./ acre) 163 170 149 Carryin 1,356 1,356 1,356 Production 13,721 14,311 12,543 Total Supply 15,102 15,692 13,924 Feed & Residual 5,450 5,550 5,000 FSI Non-Fuel 1,425 1,435 1,410 FSI Fuel (Ethanol) 5,050 5,100 4.850 Export 1,750 1,800 1,500 Total Use 13,675 13,885 12,760 Ending Stocks 1,427 1,807 1,164 Price Estimates $4.60 $4.15 $5.90 Webinar: April 1, 2014
$5.20 $5.00 $4.30 Webinar: April 1, 2014
$5.30 $5.00 Webinar: April 1, 2014
Corn Futures: April 1 $5.25 $5.00 $5.06 $5.11 $5.03 $4.89 MYA Price has to drop below $3.70 for PLC payment $4.75 $4.50 $4.71 $4.60 $4.25 $4.00 May 14 July14 Dec 14 Dec 15 Dec 16 Dec 17 Webinar: April 1, 2014
Soybeans:USDA 3/10/14 Purdue 10/11 11/12 12/13 13/14 14/15 Million Bushels Planted: 76.5 81.5 +6.5% Carryin 151 215 169 141 135 Production 3,329 3,094 3,034 3,289 3,518 Total Supply 3,495 3,325 3,239 3,464 3,678 Seed & Residual 132 88 89 99 110 Crush 1,648 1,703 1,689 1,690 1,720 Exports 1,500 1,365 1,320 1,530 1,590 Total Use 3,280 3,156 3,098 3,319 3,420 Ending Stock 215 169 141 135 258 Farm Price $11.30 $12.50 $14.40 $13.15 $11.35 $12.20 $9.85- $13.70 $12.85 Webinar: April 1, 2014
Soybean 2012 Yield Scenarios: Assuming 81.5 Million Acres Planted Trend Yields Good Yields Poor Yields Million Bushels Yield (bu./ acre) 43.7 46.0 40.0 Carryin 135 135 135 Production 3,518 3,703 2,917 Total Supply 3,678 3,863 3,220 Seed & Residual 110 130 100 Crush 1,720 1,750 1,690 Export 1,590 1,675 1,450 Total Use 3,420 3,555 3,240 Ending Stocks 258 308 140 Price Estimates $11.35 $10 - $10.50 $13 - $14 Webinar: April 1, 2014
$14.00 Webinar: April 1, 2014
$17.95 $16.00 $14.00 Webinar: April 1, 2014
$12.30 $12.00 $11.65 Webinar: April 1, 2014
$15 $14 $13 $14.77 $14.41 Soybean Futures: April 1 MYA Price has to drop below $8.40 for PLC payment $12 $11 $11.95 $11.46 $10.96 $10.80 $10 $9 May 14 July 14 Nov 14 Nov 15 Nov 16 Nov 17 Webinar: April 1, 2014
Wheat: USDA 3/10/14 09/10 10/11 11/12 12/13 13/14 Million Bushels Carry in 657 976 862 743 718 Production 2,218 2,207 1,999 2,266 2,130 Total Supply 2,993 3,279 2,974 3,131 3,018 Feed & Residual 148 133 163 388 250 Other Domestic 988 995 1,018 1,018 1,034 Exports 881 1,289 1,050 1,007 1,175 Total Use 2,017 2,417 2,231 2,413 2,459 End Stocks 976 862 743 718 558 Farm Price $4.87 $5.70 $7.24 $7.77 $6.85 $6.75- $6.95 Webinar: April 1, 2014
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Old-Crop Summary & Strategies 1. Corn usage since harvest has shown consistent growth-maybe 500 million bu. GREATER than USDA in November: Exports, ethanol, feeding. $4 corn was too CHEAP 2. Old crop corn futures sales opportunities in the $5.00-$5.20 range. 3. Old crop bean futures at $14 to $16 with record low carry-out and smaller Brazilian crop Webinar: April 1, 2014
New-Crop Summary & Strategies 1. Some acreage will shift back to corn after report-maybe 1.0 to 1.5 million acres. But, wet spring may keep acreage mix fairly close to report numbers 2. Fear of building corn surpluses in coming years has been greatly diminished. Production/use are reasonably balanced 3. 2014 soybean crop will build inventory from record lows, prices drop about $2.00 a bushel 4. Currently have opportunities to price new-crop above insurance price guarantees for corn and beans. 5. Farm Bill: 14 to 18 crop prices may be well above the $3.70 PLC reference price for corn and $8.40 for beans Webinar: April 1, 2014