ADM Grain Market Outlook
2014 Agriculture Council of Arkansas
Annual Meeting
David Glidewell
Mid-South Regional Manager
December, 2014
Current grain market factors
1)
2)
3)
4)
5)
6)
7)
8)
9)
World 2014/15 corn supply still adequate
World 2014/15 wheat supply still adequate
World 2014/15 soybean supply still record
Lower US 2015 corn supply? Higher soybeans?
US 2014 winter weather normal?
Higher US dollar and lower Commodity prices?
US farmer still slow in selling 2015 corn/soybean crop
Grain fundamentals still suggest lower 2015 prices
US Transportation cost drop in west
Improving Rainfall Is Expected In
Center West And Center South
Brazil During November, But
Some Erratic Rainfall Early To MidMonth Will Still Keep Some Of
The Rain Totals Below Average.
That Will Change In The
December Through February
Period When A More Classic El
Nino Influence Is Expected. The
Summer Will Bring On Some Drier
Biased Conditions In Rio Grande
Do Sul, Uruguay And Immediate
Neighboring Areas While
Argentina Sees Timely Rainfall
And Warm Temperatures. The
Greatest Rain In Brazil This
Summer Should Be In The Same
Areas That Have Been Quite Dry
And Hot In The Past Couple Of
Weeks.
Winter Will Be Influenced By Many
Different Weather Features. The
Weak El Nino, 18-Year Cycle And
Arctic Oscillation Will Have The
Greatest Influence. However, Pacific
Decadal Oscillation And The QuasiBiennial Oscillation Will Have Some
Influence. Each Of These Seem To
Agree That The Southeastern U.S.
Will Be Colder Than And Wetter
Than Usual This Winter. There Is
Much Agreement About The
Southwestern States Being Cool, As
Well, And The Central And Southern
Plains Wetter Than Usual. El Nino
Will Help The Pacific Northwest And
Midwest Have Some Below Average
Precipitation Biases At Times During
The Heart Of Winter, But Arctic
Oscillation, El Nino And The 18-year
Cycle Will Combine To Produce
Some Infrequent, But Quite Potent
Cold Surges Into The Eastern Half Of
The Nation.
World Agricultural Outlook Board
Interagency Commodity Estimates Committee Forecasts
Lockup Briefing
December 10, 2014
Price Summary
2013/14
estimate
Crops and products
Wheat ($/bu)
Rice ($/cwt)
Corn ($/bu)
Soybeans ($/bu)
Soybean oil (¢/lb)
Soybean meal ($/s.t.)
Cotton (¢/lb)
Livestock
Steers ($/cwt)
Hogs ($/cwt)
Broilers (¢/lb)
Turkeys (¢/lb)
Dairy products
Cheese
Butter
Nonfat dry milk
Dry whey
Milk classes
Class III ($/cwt)
Class IV ($/cwt)
All milk ($/cwt)
2014/15
forecast
Change from Change from
November 10
2013/14
Percent
Percent
6.87
16.10
4.46
13.00
38.23
489.94
77.90
6.00
14.50
3.50
10.00
34.00
360.00
61.50
1.7
-1.4
0.0
0.0
-5.6
2.9
2.5
-12.7
-9.9
-21.5
-23.1
-11.1
-26.5
-21.1
155.3
76.2
105.3
108.0
166.0
65.8
104.0
107.0
4.1
0.0
0.0
0.5
6.9
-13.7
-1.2
-0.9
2.16
2.14
1.77
0.66
1.67
1.72
1.37
0.57
-3.8
0.0
-5.1
0.0
-22.7
-19.6
-22.5
-12.7
22.35
22.15
24.10
16.95
16.90
18.85
-3.7
-3.7
-2.3
-24.2
-23.7
-21.8
December 10, 2014
Weekly nearby soybean futures chart
8
9
10
11
Big crops and strong US dollar; US exports?
U.S. Soybean Supply and Demand
2013/14
estimate
Planted area (million acres)
Harvested area (million acres)
Yield (bushels per acre)
Beginning stocks
Production
Imports
Total supply
Crush
Seed and residual
Domestic use
Exports
Total use
Ending stocks
Stocks to use ratio
Average market price
2014/15
forecast
76.8
84.2
76.3
83.4
44.0
47.5
Million bushels
141
92
3,358
3,958
72
15
3,570
4,065
1,734
1,780
98
115
1,832
1,895
1,647
1,760
3,478
3,655
92
410
Percent
2.6
11.2
Dollars per bushel
13.00
9.00/11.00
Change from Change from
November 10
2013/14
Percent
Percent
0.0
0.0
0.0
9.6
9.4
7.8
0.0
0.0
0.0
0.0
0.0
0.0
0.0
2.3
1.1
-8.9
-34.6
17.9
-79.1
13.9
2.7
17.9
3.5
6.9
5.1
346.1
0.0
-23.1
December 10, 2014
14
15
Monthly soybean futures chart
16
Soybean - Farmer Percent Marketing’s
30
25
20
15
2011/12
2012/13
10
5
0
Sep
Oct
Nov
Dec
Jan
Feb
Mar
Month of Crop Year
Apr
May
Jun
Jul
Aug
Monthly US Soybeans Exports
360
330
300
270
Million Bushels
240
210
180
150
120
90
60
30
0
Sep
Oct
Nov
Dec
Jan
2012-2013
Feb
2013-2014
Mar
Apr
2014-2015
May
Jun
Jul
Aug
July,2015-Nov, 2015 soybean spread chart
21
23
USDA SUPPLY/DEMAND
Hightower 2015/16 Estimates
US SOYBEANS
Nov
Nov
Nov
USDA
USDA
USDA
Changes in Planted Acres Est.
15 Yr. Trend Line Yield
08-09
09-10
10-11
11-12
12-13
13-14
14-15
Planted Area (M Acres)
75.7
77.5
77.4
75.0
77.2
76.8
84.2
85.2
86.2
87.2
Harvested Area (Acres)
74.7
76.4
76.6
73.8
76.1
76.3
83.4
84.3
85.3
86.3
Yield (Bu/Acre)
39.7
44.0
43.5
41.9
40.0
44.0
47.5
45.1
45.1
45.1
Beginning Stocks (M Bu)
205
138
151
215
169
141
92
450
450
450
2,967
3,359
3,329
3,094
3,042
3,358
3,958
3,804
3,849
3,893
13
15
14
16
41
72
15
15
15
15
3,185
3,512
3,494
3,325
3,252
3,570
4,065
4,269
4,314
4,358
Crushings
1,662
1,752
1,648
1,703
1,689
1,734
1,780
1,810
1,785
1,810
Exports
1,279
1,499
1,505
1,365
1,317
1,647
1,720
1,770
1,695
1,770
Seed
90
90
87
90
89
98
92
92
92
92
Residual
16
20
43
-2
16
0
23
22
22
22
3,047
3,361
3,279
3,155
3,111
3,478
3,615
3,694
3,694
3,694
138
151
215
169
141
92
450
575
620
664
4.5%
4.5%
6.6%
5.4%
4.5%
2.6%
12.4%
15.6%
16.8%
18.0%
Production
Im ports
Supply,Total
Use, Total
Ending Stocks
Stocks/Use Ratio
Weekly nearby corn futures chart
25
26
These estimates assume good weather in
next several months
28
U.S. Corn Supply and Demand
2013/14
estimate
2014/15
forecast
Change from Change from
November 10
2013/14
Percent
Planted area (million acres)
Harvested area (million acres)
Yield (bushels per acre)
Beginning stocks
Production
Imports
Total supply
Feed and residual
Food, seed, and industrial
Ethanol
Domestic use
Exports
Total use
Ending stocks
Stocks to use ratio
Average market price
95.4
90.9
87.7
83.1
158.8
173.4
Million bushels
821
1,236
13,925
14,407
36
25
14,782
15,668
5,132
5,375
6,497
6,545
5,134
5,150
11,629
11,920
1,917
1,750
13,546
13,670
1,236
1,998
Percent
9.1
14.6
Dollars per bushel
4.46
3.20/3.80
Percent
0.0
0.0
0.0
-4.7
-5.2
9.2
0.0
0.0
0.0
0.0
0.0
0.2
0.0
0.1
0.0
0.1
-0.5
50.5
3.5
-30.1
6.0
4.7
0.7
0.3
2.5
-8.7
0.9
61.7
0.0
-21.5
December 10, 2014
U.S. Meat Production and Prices
Production
Beef
Pork
Broilers
Turkey
Total meat
Prices
Steers
Hogs
Broilers
Turkey
2014
2015
estimate
forecast
Billion pounds
24.25
23.67
22.79
23.62
38.49
39.63
5.74
5.93
92.04
93.63
Dollars/cwt
155.29
166.00
76.22
65.75
Cents/lb
105.3
104.0
108.0
107.0
Change from
November 10
Change from
2014
Percent
Percent
0.0
0.0
0.0
0.0
0.0
-2.4
3.6
3.0
3.2
1.7
4.1
0.0
6.9
-13.7
0.0
0.5
-1.2
-0.9
December 10, 2014
31
32
Corn - Farmer Percent Marketing’s
18
16
14
12
10
2011/12
8
2012/13
6
4
2
0
Sep
Oct
Nov
Dec
Jan
Feb
Mar
Month of Crop Year
Apr
May
Jun
Jul
Aug
Monthly US Corn Exports
240
210
180
Million Bushels
150
120
90
60
30
0
Sep
Oct
Nov
Dec
Jan
2012-2013
Feb
2013-2014
Mar
Apr
2014-2015
May
Jun
Jul
Aug
38
USDA SUPPLY/DEMAND
Hightower 2015/16 Estimates
US CORN
Nov
Nov
Nov
USDA
USDA
USDA
Changes in Planted Acres Est.
If 163 Yield
08-09
09-10
10-11
11-12
12-13
13-14
14-15
Planted Area (M Acres)
86.0
86.4
88.2
91.9
97.3
95.4
90.9
88.9
86.9
84.9
Harvested Area (Acres)
78.6
79.5
81.4
84.0
87.4
87.7
83.1
81.3
79.4
77.6
Yield (Bu/Acre)
153.9
164.7
152.8
147.2
123.1
158.8
173.4
163.0
163.0
163.0
Beginning Stocks (M Bu)
1,624
1,673
1,708
1,128
989
821
1,236
2,008
2,008
2,008
12,092
13,092
12,447
12,360
10,755
13,925
14,407
13,247
12,949
12,651
14
8
28
29
160
125
25
25
25
25
Supply, Total
13,729
14,774
14,182
13,517
11,904
14,782
15,668
15,280
14,982
14,684
Feed & Residual
5,182
5,126
4,798
4,566
4,315
5,132
5,375
5,460
5,460
5,460
Food, Seed & Industry
5,025
5,961
6,425
6,421
6,038
6,497
6,535
6,550
6,550
6,550
Ethanol for Fuel
3,709
4,591
5,019
5,000
4,641
5,134
5,150
5,165
5,165
5,165
Domestic Total
10,207
11,087
11,224
10,987
10,353
11,629
11,910
12,010
12,010
12,010
Total Exports
1,849
1,979
1,831
1,541
730
1,917
1,750
1,850
1,850
1,850
Use, Total
12,056
13,066
13,055
12,528
11,083
13,546
13,660
13,860
13,860
13,860
Ending Stocks
1,673
1,708
1,128
989
821
1,236
2,008
1,420
1,122
824
13.9%
13.1%
8.6%
7.9%
7.4%
9.1%
14.7%
10.2%
8.1%
5.9%
Production
Imports
Stocks/Use Ratio
U.S. Rice Supply and Demand
December 10, 2014
41
42
Monthly Chicago wheat futures chart
43
44
45
CURRENT TOTAL USDA PROJECTED EXPORT SALES
CORN
SOYBEANS
ALL WHEAT
44,450.00 MMT
47,900.00 MMT
32,006.00 MMT
WEEKLY SALES TO DATE
ELAPSED: 13 WKS CORN/BEANS, 27 WKS WHEAT
CORN
SOYBEANS
WHEAT
TOTAL AVG/WEEK % OF PROJECTED SALES
23,712.80 1,824.06
53.35%
40,460.60 3,112.35
84.47%
17,375.30 643.53
54.29%
REMAINING SALES NEEDED TO MEET PROJECTIONS
REMAINING: 39 WKS CORN/BEANS, 25 WKS WHEAT
CORN
SOYBEANS
WHEAT
% SALES OF CURRENT
TOTAL AVG/WEEK
PROJ.
20,737.20 531.72
46.65%
7,439.40
190.75
15.53%
14,630.70 585.23
45.71%
47
Marketing Partners Advisory Recommendations
CORN:
2014-crop – We are 70% sold at Chicago March 2015 $4.60
Recommendation: sell 10% at Chicago March 2015 $4.22
2015-crop – We are 25% sold at Chicago December 2015 at $4.34
SOYBEANS:
2014-crop – We are 85% sold at Chicago January 2015 $11.66
Recommendation: Sell 10% at January 2015 at $11.00
2015-crop – We are 30% sold at Chicago November 2015 $10.27
Recommendation: Sell 5% at November 2015 at $11.00
WHEAT:
2014-crop
SRW – We are 60% sold at Chicago March 2015 $6.88
Recommendation: sell 10% at Chicago March 2015 $6.25
2015-crop
SRW – We are 40% sold at Chicago July 2015 $7.18
Recommendation: sell 10% at Chicago July 2015 $6.25
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PRESERVING
WEALTH!
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50