Wheat and Feed Grain Market
Outlook and Situation
Southern Extension Outlook Conference
Tunica, Mississippi
September 24, 2002
Kurt M. Guidry
LSU Agricultural Center
Current Market Situation
•Significantly Improved Markets From Last 3 Years
•Supply Driven Rally
•Improved Fundamentals Increase Market Sensitivity
•Since June, Futures Prices Have Increased


Wheat Futures Moved Over $1.00 Per Bushel Higher
Corn Futures Moved Over $0.70 Per Bushel Higher
Where Will Prices Go ?
•Prices Have Softened With Harvest Pressure And
Likelihood Of Increased Acres For Wheat
•Demand Will Likely Play Big Role In Continued Price Movement
•Increased Prices Will Likely Bring More Acreage Into Production
•Improved Supply and Demand Fundamentals Should Provide
Support
Estimated Costs and Returns For Selected Commodities - Southern States
Corn Wheat Soybeans Cotton Grain Sorghum
Yield
103.5
45.0
27.3 628.0
63.1
Price
$2.59 $3.52 $5.21 $0.53
$2.46
Revenue
$267.99 $158.23 $142.23 $332.85
$155.28
Variable Cost
$151.14 $87.85 $85.60 $334.24
Returns Above Variable Cost $116.85 $70.38 $56.63
-$1.40
$94.63
$60.66
U.S. Corn Supply and Use (Domestic Measure)
2001/02
2001/02
Item
Area
Planted
Harvested
Yield per harvested acre
------------------ 2002/03------------- 2002/03
-----Estimate (Sept. - Aug.)
August
September (Sept. - Aug.)
Million Acres
Change
Million Acres Million Acres
Change
75.8
68.8
Bushels
138.2
Million Bushels
Beginning stocks
1,899
Production
9,507
Imports
10
Supply, total
11,416
Feed and residual
5,825
Food, seed, & industrial
2,055
Domestic, total
Exports
Use, total
Ending Stocks
Stocks To Use
Avg. Farm Price ($/bu)
7,880
1,900
9,780
1,636
16.73%
1.97
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
78.8
71.0
Bushels
125.2
78.8
70.5
Bushels
125.4
Million Bushels Million Bushels
1,636
1,636
8,886
8,849
15
15
10,537
10,499
5,600
5,600
2,170
2,170
7,770
2,000
9,770
767
7.85%
2.30 - 2.70
7,770
2,000
9,770
729
7.46%
2.35 - 2.75
Source: USDA, World Agricultural Supply and Demand Report, September 12, 2002.
0.00
-0.50
0.20
0.00
-37.00
0.00
-38.00
0.00
0.00
0.00
0.00
0.00
-38.00
U.S. Corn Production
Million Bushels
10,000
9,500
9,000
8,500
8,000
1998/99
1999/00
2000/01
Marketing Year
2001/02
2002/03
U.S. Corn Food, Seed, and Industrial Use
Million Bushels
2,200
2,100
2,000
1,900
1,800
1,700
1,600
1998/99
1999/00
2000/01
Marketing Year
2001/02
2002/03
Source: DTN AgDayta
U.S. Corn Exports
Million Bushels
2,050
2,000
1,950
1,900
1,850
1998/99
1999/00
2000/01
Marketing Year
2001/02
2002/03
Source: DTN AgDayta
U.S. Corn Ending Stocks
Million Bushels
2,000
1,500
1,000
500
0
1998/99
1999/00
2000/01
Marketing Year
2001/02
2002/03
World Corn Production
1,000 Metric Tons
610000
605000
600000
595000
590000
585000
580000
575000
1998/99
1999/00
2000/01
Marketing Year
2001/02
2002/03
1,000 Metric Tons
Corn Production Of Selected Countries
140000
120000
100000
80000
60000
40000
20000
0
Argentina
1998/99
Brazil
1999/00
China
2000/01
Hungary
2001/02
South Africa
2002/03
World Corn Imports
1000 Metric Tons
78000
76000
74000
72000
70000
68000
66000
64000
1998/99
1999/00
2000/01
Marketing Year
2001/02
2002/03
1,000 Metric Tons
Corn Exports Of Selected Countries
14000
12000
10000
8000
6000
4000
2000
0
Argentina
1998/99
Brazil
1999/00
China
2000/01
Hungary
2001/02
South Africa
2002/03
Corn Ending Stocks
1,000 Metric Tons
200000
150000
100000
50000
0
China
1998/99
1999/00
United States
2000/01
2001/02
World
2002/03
U.S. Sorghum Supply and Use (Domestic Measure)
2001/02
2001/02
Item
Area
Planted
Harvested
Estimate
Million Acres
Yield per harvested acre
10.3
8.6
Bushels
59.9
Beginning stocks
Production
Imports
Supply, total
Feed and residual
Food, seed, & industrial
Domestic, total
Exports
Use, total
Ending Stocks
Stocks To Use
Avg. Farm Price ($/bu)
Million Bushels
42
515
0
556
215
45
260
240
500
56
11.20%
1.95
------------------ 2002/03------------2002/03
-----(Sept. - Aug.)
August
September (Sept. - Aug.)
Change
Million Acres
Million Acres
Change
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
9.3
7.5
Bushels
50.3
9.3
7.5
Bushels
51.0
Million Bushels Million Bushels
56
56
380
384
0
0
436
441
135
135
45
45
180
180
220
220
400
400
36
41
9.00%
10.25%
2.30 - 2.70
2.35 - 2.75
Source: USDA, World Agricultural Supply and Demand Report, September 12, 2002.
0.00
0.00
0.70
0.00
4.00
0.00
5.00
0.00
0.00
0.00
0.00
0.00
5.00
U.S. Wheat Supply and Use (Domestic Measure)
2001/02
2001/02
Item
Area
Planted
Harvested
Yield per harvested acre
Beginning stocks
Production
Imports
Supply, total
Food
Seed
Feed and Residual
Domestic, total
Exports
Use, total
Ending Stocks
Stocks To Use
Avg. Farm Price ($/bu)
Estimate
Million Acres
59.6
48.7
Bushels
40.2
Million Bushels
876
1,958
108
2,941
928
81
199
1,208
961
2,169
772
35.59%
2.78
------------------ 2002/03------------2002/03
-----(Sept. - Aug.)
August
September
(Sept. - Aug.)
Change
Million Acres
Million Acres
Change
0.00
0.00
0.00
0.00
0.00
0.00
0.00
-2.00
0.00
2.00
0.00
0.00
0.00
0.00
60.1
47.6
Bushels
35.4
60.1
47.6
Bushels
35.4
Million Bushels Million Bushels
772
772
1,686
1,686
105
85
2,563
2,543
940
930
81
81
175
175
1,196
900
2,096
467
22.28%
3.20 -3.80
1,186
950
2,136
407
19.05%
3.45 - 4.05
Source: USDA, World Agricultural Supply and Demand Report, September 12, 2002
0.00
0.00
0.00
0.00
0.00
-20.00
-20.00
-10.00
0.00
0.00
-10.00
50.00
40.00
-60.00
Marketing Year
20
02
/0
3
19
98
/9
9
19
99
/2
00
0
20
00
/2
00
1
20
01
/2
00
2
19
97
/9
8
19
96
/9
7
Million Bushels
U.S. Wheat Production
3,000
2,500
2,000
1,500
1,000
500
0
Source: DTN AgDayta
Source: DTN AgDayta
Marketing Year
20
02
/0
3
19
98
/9
9
19
99
/2
00
0
20
00
/2
00
1
20
01
/2
00
2
19
97
/9
8
19
96
/9
7
Million Bushels
U.S. Wheat Food Use
960
940
920
900
880
860
Marketing Year
20
02
/0
3
19
99
/2
00
0
20
00
/2
00
1
20
01
/2
00
2
19
98
/9
9
19
97
/9
8
19
96
/9
7
Million Bushels
U.S. Wheat Feed And Residual Use
500
400
300
200
100
0
Marketing Year
20
02
/0
3
19
98
/9
9
19
99
/2
00
0
20
00
/2
00
1
20
01
/2
00
2
19
97
/9
8
19
96
/9
7
Million Bushels
U.S. Wheat Exports
1,100
1,050
1,000
950
900
850
Marketing Year
20
02
/0
3
19
98
/9
9
19
99
/2
00
0
20
00
/2
00
1
20
01
/2
00
2
19
97
/9
8
19
96
/9
7
Million Bushels
U.S. Wheat Ending Stocks
1,000
800
600
400
200
0
1,000 Metric Tons
World Wheat Production
595000
590000
585000
580000
575000
570000
565000
560000
1998/99
1999/00
2000/01
Marketing Year
2001/02
2002/03
1,000 Metric Tons
Wheat Production Of Selected Countries
120000
100000
80000
60000
40000
20000
0
Argentina
Australia
Canada
European Union
1998/99 1999/00 2000/01 2001/02 2002/03
Source: DTN AgDayta
World Wheat Imports
1,000 Metric Tons
115000
110000
105000
100000
95000
90000
1998/99
1999/00
2000/01
Marketing Year
2001/02
2002/03
1,000 Metric Tons
Wheat Exports Of Selected Countries
25000
20000
15000
10000
5000
0
Argentina
Australia
Canada
European Union
1998/99 1999/00 2000/01 2001/02 2002/03
World Wheat Ending Stocks
1,000 Metric Tons
200000
150000
100000
50000
0
1998/99
1999/00
2000/01
Marketing Year
2001/02
2002/03
CBOT Corn Futures Contract Prices
Contract
2-Sep
2-Dec
3-Jan
3-Mar
3-May
3-Jul
3-Sep
3-Dec
Open
High
Low
Last
2714
2714
2660
2664*
2650
2656
2600
2606*
2102
2102
2102*
2724
2724
2670
2680*
2750
2760
2712
2714*
2750
2764
2710
2712*
2640
2530
2640
2540
2584
2490
2590*
2490*
Source: DTN AgDayta
CBOT Wheat Futures Contract Prices
Contract
2-Sep
2-Dec
3-Mar
3-May
3-Jul
Open
High
Low
Last
4022
4040
3950
3950*
3930
4054
3910
4000*
3944
4050
3934
3980*
3750
3480
3860
3550
3750
3474
3790*
3516*
Source: DTN AgDayta
Conclusions
•Despite Improved Fundamentals, Increased Acres And A
Return To More Typical Yields Will Place Pressure On Price
•Improved Fundamentals Likely Will Cause More Sensitivity
To Production Difficulties And/Or Improved Demand
•Potential For Increased Production Provides Incentive To
Consider Current Prices For Expected 2003 Production