Feed Grain Outlook
April 25, 2016
Volume 25, Number 25
Market Situation
Today’s Newsletter
Market Situation
Crop Progress
1
Grain Use
1
Outside Markets
4
Marketing Strategies
2016 Feed Grain
Marketing Plan
6
Upcoming
Reports/Events
Crop Progress. This week’s Crop Progress report shows corn
planted at 30%, up from 13% last week and above the average
since 1980 of 11%. Rainfall over the next few days is likely to
bring planting to a halt (see today’s Wheat Outlook for more
weather information).
U.S. Corn Planting Progress
% Planted, 1980-2016
%
100
90
80
70
7
60
High
Low
Average
2016
50
40
30
20
10
0
13
14
15
16
17
18
19
20
21
22
23
Week
Grain Use. Ethanol production held steady last week, currently in
line with seasonal patterns. For the 2015/16 corn marketing year,
ethanol production is up 3% over last year and 9% above the fiveyear average.
As of March 2016, the Agricultural Marketing Resource Center at
Iowa State University shows ethanol plants operating at levels just
covering variable costs the last several months. For the last 12
months, total costs on average have been about 3 cents per gallon
above average total revenue.
Broiler placement fell off an increasing pace last week, back down
to numbers seen last year at this time. For the year, placements
are on par with 2014/15 and 2% above average.
1
Feed Grain Outlook
April 25, 2016
Volume 25, Number 25
2015/16 U.S. Ethanol Production
2015/16 daily average = 40.837 mil gal per day
Implies use of 5,323 mil bu of corn (2.8 gal/bu)
April USDA estimate = 5,250 mil bu corn for fuel, 125 mil bu sorghum food, seed, and industrial
Million gallons per day
April 15
101% of last year
106% of average
45
43
41
39
37
35
Total for Current Marketing Year to last year at this time: +2.9%
Total for Current Marketing Year to 5-yr avg at this time: +9.1%
33
31
29
27
25
5-year average
2014/15
2015/16
Energy Information Administration, Weekly Petroleum Status Report, April 20, 2016
Ethanol conversion rate, Agricultural Marketing Resource Center, Iowa State University
Ethanol Profitability per gallon
Agricultural Marketing Resource Center, Iowa State University
http://www.agmrc.org/renewable_energy/
$4.00
$3.50
$3.00
$2.50
$2.00
$1.50
$1.00
$0.50
Jan-14
Feb-14
Mar-14
Apr-14
May-14
Jun-14
Jul-14
Aug-14
Sep-14
Oct-14
Nov-14
Dec-14
Jan-15
Feb-15
Mar-15
Apr-15
May-15
Jun-15
Jul-15
Aug-15
Sep-15
Oct-15
Nov-15
Dec-15
Jan-16
Feb-16
Mar-16
Apr-16
$0.00
Corn
Natural Gas
Other VC
FC
Revenue
March 2016 revenue and prices (change from previous month): profit -$0.17/gal; revenue $1.65 (-2%); costs $1.82 (-1%)
ethanol $1.27/gallon (-2%); corn $3.44/bu (-1%); natural gas $5.18/1000 ft3 (+0%); ddgs $124/ton (+1%)
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Feed Grain Outlook
April 25, 2016
Volume 25, Number 25
2015/16 MY Total to Date
Year ago: +0.1%
Average: +2.1%
2015/16 Broiler Chicks Placed
19 states, weekly
April 16, 2016
100% of last year
101% of average
Thousand
175,000
170,000
165,000
160,000
155,000
150,000
5-year average
2014/15
2015/16
Source: USDA/NASS, April 20, 2016
Friday’s Cattle on Feed report showed numbers up 1% compared to year ago and 98% of
average. For the corn marketing year, cattle on feed are up about that same 1%.
Cattle on Feed
1,000+ capacity feedlots
MY to date
Year ago: +0.9%
Average: -3.5%
Apr 1 2016
101% of last year
98% of average
000 head
12,000
11,500
11,000
10,500
10,000
9,500
9,000
Sep Oct Nov Dec Jan Feb Mar Apr May Jun
5-yr avg
2014/15
Jul
Aug
2015/16
Source: USDA/NASS, April 22, 2016
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Feed Grain Outlook
April 25, 2016
Volume 25, Number 25
Corn export sales commitments had another good week on 4/14/2016. Sales registered at 47
million bushels and the pace needed to reach USDA’s marketing year target fell to 17 million
bushels per week. Strong sales of late are making up for a slow start to get us back to where the
sales total normally runs at the end of April. Current sales represent 83% of the marketing year
total; normally by the end of April sales are at 86%.
U.S. Corn Export Sales Commitments, 2015/16 MY
Projected MY Total
Mil bu
1,800
1,600
1,400
1,200
1,000
Cumulative Net Sales
800
600
400
200
Weekly Net Sales
Pace to reach target: 17 mil bu/wk
0
Export Sales Commitments for the week 4/14/2016: 47 million bushels
Total Export Sales Commitments this marketing year: 1,375 million bushels
83% of the 2015/16 MY Export Sales Target of 1,650 million bushels (April WASDE)
Normal Sales Pace for the end of April: 86%
USDA, Foreign Agricultural Service: April 21, 2016
Outside Markets. The Federal Open Market Committee of the Federal Reserve meets
tomorrow and Wednesday. The Fed last raised interest rates in December and is not expected
to raise them again now. However, statements from the meeting will be scrutinized for
descriptions of the economy that clarify the metrics the Fed will use in announcing the next
rate hike. Reports to watch: the Bureau of Economic Analysis will release the advance estimate
of 1st Quarter U.S. GDP on Thursday (April 28th); the next jobs report is Friday, May 6th; the
Consumer Price Index will be updated May 17th.
In the short term, a move to higher interest rates would serve to strengthen the dollar (given
weak economic growth globally) and likely weaken the stock market and commodity markets.
However, if rates increase due to a more favorable economic conditions (i.e., falling
unemployment, rising prices, stability and growth in overseas markets), an interest rate hike by
the Fed would point to higher stock prices and increased commodity demand long term.
4
Feed Grain Outlook
April 25, 2016
Volume 25, Number 25
Prices as of 1:45 pm CDT:
II Qtr 2016
S&P 500 Index
1-Apr
2,072.78
25-Apr
2,083.41
net change
10.63
% change
0.51%
CRB Commodity Index
168.03
178.87
10.84
6.45%
Jun ’16 Crude Oil
38.20
42.70
4.50
11.78%
Jun ’16 Copper
2.1685
2.2515
0.0830
3.83%
Jun ’16 Dollar Index
94.618
94.765
0.1470
0.16%
May ’16 Corn
3.5400
3.7700
0.2300
6.50%
Jul ‘16 Corn
3.5775
3.8175
0.2400
6.71%
Dec ‘16 Corn
3.6975
3.8775
0.1800
4.87%
5
Feed Grain Outlook
April 25, 2016
Volume 25, Number 25
Marketing Strategies
2016 Feed Grain Marketing Plan. With the run-up in December corn futures back up to $4.00, I
added to new crop sales. I used as my sales trigger the price dropping back below the 4-day
moving average. That sale came on the key reversal on Thursday at $3.95. That gets me to 40%
priced on new crop grain.
December Corn Futures and 2016 Marketing Plan
20%
¢/bu
450
South American crop
conditions
Battle for Acres
Planting Intentions
440
430
420
20%
Planting
Intentions
Grain Stocks
Early season
crop
conditions/
progress
Weather
outlook
20%
20%
20%
Acreage
Report/
Grain
Stocks
Weather
Tassel
and
August
Crop
Report
Cash
sales at
harvest
410
400
390
380
370
360
Sold 20% at 389¼
Sold 20% at 395
9/1/2015
9/11/2015
9/22/2015
10/1/2015
10/12/2015
10/21/2015
10/30/2015
11/10/2015
11/19/2015
12/1/2015
12/10/2015
12/21/2015
12/31/2015
1/12/2016
1/22/2016
2/2/2016
2/11/2016
2/23/2016
3/3/2016
3/14/2016
3/23/2016
4/4/2016
4/13/2016
4/22/2016
5/3/2016
5/12/2016
5/23/2016
6/2/2016
6/9/2016
6/16/2016
6/23/2016
6/30/2016
7/7/2016
7/14/2016
7/21/2016
7/28/2016
8/4/2016
8/11/2016
8/18/2016
8/25/2016
9/1/2016
9/8/2016
9/15/2016
9/22/2016
9/29/2016
10/6/2016
10/13/2016
10/20/2016
10/27/2016
11/3/2016
11/10/2016
11/17/2016
11/24/2016
12/1/2016
12/8/2016
12/15/2016
350
6
Feed Grain Outlook
April 25, 2016
Volume 25, Number 25
Upcoming Reports/Events.
May 3 & 4
May 10
May 20
Grain Grading Workshop, Amarillo
WASDE
Short-term Energy Outlook
Cattle on Feed
Mark Welch, Texas A&M AgriLife Extension Economist
600 John Kimbrough Blvd, Suite 335
College Station, Texas 77843
Tel. (979)845-8011
Fax. (979)845-4906
JMWelch@tamu.edu
The opinions and recommendations expressed are solely those of the author and are intended for educational purposes only as
part of the Texas A&M AgriLife Extension Service. The author and Texas A&M AgriLife Extension Service assume no liability
for the use of this newsletter. Educational programs of the Texas A&M AgriLife Service are open to all people without regard
to race, color, sex, disability, religion, age, or national origin.
The Texas A&M University System, U.S. Department of Agriculture, and the County Commissioners Courts of Texas
Cooperating
7