Grain and Oilseeds Outlook for 2011 Michael Jewison Foreign Agricultural Service
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Transcript of Grain and Oilseeds Outlook for 2011 Michael Jewison Foreign Agricultural Service
Grain and Oilseeds Outlook for 2011
Michael Jewison
Foreign Agricultural ServiceU.S. Department of Agriculture
Agricultural Outlook ForumArlington, Virginia
February 25, 2011
Cash Prices in Illinois Are Near Record Levels of 2007/08
8/22
/07
12/2
2/07
4/22
/08
8/22
/08
12/2
2/08
4/22
/09
8/22
/09
12/2
2/09
4/22
/10
8/22
/10
12/2
2/10
$0.00
$3.00
$6.00
$9.00
$12.00
$15.00
$18.00
Soybeans Wheat Corn
$/bu
11.82
7.10
7.31
16.18 12.69
6.53
U.S. Factors Shaping 2011
Tight supplies of corn and soybeans, relatively abundant wheat
Little supply cushion for corn and soybeans in the event of adverse weather
Strong corn, wheat, and soybean exports
Projected 10 Million More Acres: 75 Percent Going to Corn and Wheat
1996 ………. 2006 2007 2008 2009 2010 20110
50
100
150
200
250
300
350
79.2 86.0 88.2 92.0
64.275.7 77.4 78.0
75.163.2 53.6 57.0
42.3 28.2 26.0 28.1
34.5 34.631.4
31.9
Corn Soybeans Wheat Other Feed Grains, Rice & Cotton CRPMil. acres
288295 287277
New Crop Soy/Corn Price Relationship Favors Corn
1-Se
p
14-S
ep
27-S
ep
10-O
ct
23-O
ct
5-Nov
18-N
ov
1-Dec
14-D
ec
27-D
ec9-
Jan
22-Ja
n
4-Feb
17-F
eb
2-M
ar
15-M
ar
28-M
ar
10-A
pr
23-A
pr1.9
2
2.1
2.2
2.3
2.4
2.5
2.6
2.7
2007 2010 2011
Corn Acres Increased While Soy Was Flat in 2010
Corn Acres Increased in 2007
Soybean/Corn
Net Returns for Corn and Soybeans Historically High
2006 2007 2008 2009 2010 20110
100
200
300
400
500
600
700
Corn Soybeans Wheat
$/acre
$173
95/
96
97/
98
99/
00
01/
02
03/
04
05/
06
07/
08
09/
10
11/
12
0
5000
10000
15000
20000
Production Beg. Stocks
95/
96
97/
98
99/
00
01/
02
03/
04
05/
06
07/
08
09/
10
11/
12
0
5000
10000
15000
20000
Ethanol Feed Exports Other
U.S. Corn: A Record Crop, Tight Carry-In Stocks, Strong Use
Bil. Bu Supply
UseBil. Bu
Gradual Recovery in Gasoline Consumption Supports Growth in Ethanol
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011F 2012F130
132
134
136
138
140
142
144
Actual EIA Feb. 2011 Forecast
Bil. gallons
Source: Energy Information Administration
But Ethanol Usage Constrained By Market For E10
1/6/061/13/061/20/061/27/062/3/062/10/062/17/062/24/063/3/063/10/063/17/063/24/063/31/064/7/064/14/064/21/064/28/065/5/065/12/065/19/065/26/066/2/066/9/066/16/066/23/066/30/067/7/067/14/067/21/067/28/068/4/068/11/068/18/068/25/069/1/069/8/069/15/069/22/069/29/0610/6/0610/13/0610/20/0610/27/0611/3/0611/10/0611/17/0611/24/0612/1/0612/8/0612/15/0612/22/0612/29/061/5/071/12/071/19/071/26/072/2/072/9/072/16/072/23/073/2/073/9/073/16/073/23/073/30/074/6/074/13/074/20/074/27/075/4/075/11/075/18/075/25/076/1/076/8/076/15/076/22/076/29/077/6/077/13/077/20/077/27/078/3/078/10/078/17/078/24/078/31/079/7/079/14/079/21/079/28/0710/5/0710/12/0710/19/0710/26/0711/2/0711/9/0711/16/0711/23/0711/30/0712/7/0712/14/0712/21/0712/28/071/4/081/11/081/18/081/25/082/1/082/8/082/15/082/22/082/29/083/7/083/14/083/21/083/28/084/4/084/11/084/18/084/25/085/2/085/9/085/16/085/23/085/30/086/6/086/13/086/20/086/27/087/4/087/11/087/18/087/25/088/1/088/8/088/15/088/22/088/29/089/5/089/12/089/19/089/26/0810/3/0810/10/0810/17/0810/24/0810/31/0811/7/0811/14/0811/21/0811/28/0812/5/0812/12/0812/19/0812/26/081/2/091/9/091/16/091/23/091/30/092/6/092/13/092/20/092/27/093/6/093/13/093/20/093/27/094/3/094/10/094/17/094/24/095/1/095/8/095/15/095/22/095/29/096/5/096/12/096/19/096/26/097/3/097/10/097/17/097/24/097/31/098/7/098/14/098/21/098/28/099/4/099/11/099/18/099/25/0910/2/0910/9/0910/16/0910/23/0910/30/0911/6/0911/13/0911/20/0911/27/0912/4/0912/11/0912/18/0912/25/091/1/101/8/101/15/101/22/101/29/102/5/102/12/102/19/102/26/103/5/103/12/103/19/103/26/104/2/104/9/104/16/104/23/104/30/105/7/105/14/105/21/105/28/106/4/106/11/106/18/106/25/107/2/107/9/107/16/107/23/107/30/108/6/108/13/108/20/108/27/109/3/109/10/109/17/109/24/1010/1/1010/8/1010/15/1010/22/1010/29/1011/5/1011/12/1011/19/1011/26/1012/3/1012/10/1012/17/1012/24/1012/31/101/7/111/14/111/21/111/28/112/4/112/11/110.0
500.0
1,000.0
1,500.0
2,000.0
2,500.0
3,000.0
All Finished Blends Ethanol Blends
Bil. gallons
U.S. Maintains Corn Exports While DDG Exports Grow
01/02
02/03
03/04
04/05
05/06
06/07
07/08
08/09
09/10
10/11
11/12
20
30
40
50
60
70
80
Corn
DDG
MMT
U.S. Corn Ending Stocks Would Be The Second Lowest Since 95/96
95/96 … 06/07 07/08 08/09 09/10 10/11 11/120
20
40
60
80
100
120
140
160
U.S. Foreign
MMT
95/9
6
97/9
8
99/0
0
01/0
2
03/0
4
05/0
6
07/0
8
09/1
0
11/1
2
0
1000
2000
3000
4000
5000
Production Beg. Stocks
95/9
6
97/9
8
99/0
0
01/0
2
03/0
4
05/0
6
07/0
8
09/1
0
11/1
2
0
1000
2000
3000
4000
5000
Domestic Use Exports
U.S. Wheat: Lower Production and Carry-In Stocks, Exports Still Strong
Bil. Bu Supply
UseBil. Bu
95/9
6
97/9
8
99/0
0
01/0
2
03/0
4
05/0
6
07/0
8
09/1
0
11/1
2
0
1000
2000
3000
4000
5000
Production Beg. Stocks
95/9
6
97/9
8
99/0
0
01/0
2
03/0
4
05/0
6
07/0
8
09/1
0
11/1
2
0
1000
2000
3000
4000
5000
Domestic Use Exports
U.S. Soybeans: Bumper Crop and Tight Carry-In Stocks, Strong Exports and Crush
Bil. Bu Supply
UseBil. Bu
Global Factors Shaping 2011
Degree of Russian crop recovery
Production responses: Canada, EU, South America, and Australia
Continued surging demand for feed ingredients, particularly in China
Wheat: Need More Production to Meet Rising Global Consumption
00/0
1
01/0
2
02/0
3
03/0
4
04/0
5
05/0
6
06/0
7
07/0
8
08/0
9
09/1
0
10/1
1
11/1
2
500
550
600
650
700
Production Consumption
MMT
?
05/06 06/07 07/08 08/09 09/10 10/110
50
100
150
200
Others* Black Sea** Exporter***
MMT
Wheat Stocks Held by Exporters Still Ample
*Most stocks unavailable to World **Kazakhstan, Russia and Ukraine ***Argentina. Australia, Canada, EU, U.S.
Global Corn Production Expands to Meet Rising Demand
00/0
1
01/0
2
02/0
3
03/0
4
04/0
5
05/0
6
06/0
7
07/0
8
08/0
9
09/1
0
10/1
1
11/1
2
400
500
600
700
800
900
Production Consumption
MMT
?
U.S. Corn Production Responds to Ethanol, Foreign Production Responds to Growing Feed Demand
05/0
6
06/0
7
07/0
8
08/0
9
09/1
0
10/1
1
11/1
2
0
100
200
300
400
500
600
Production Ethanol
05/0
6
06/0
7
07/0
8
08/0
9
09/1
0
10/1
1
11/1
2
0
100
200
300
400
500
600
Production Consumption
?
United States
ForeignMMT MMT
Soybeans: Higher Global Production Balances Rising Consumption
00/0
1
01/0
2
02/0
3
03/0
4
04/0
5
05/0
6
06/0
7
07/0
8
08/0
9
09/1
0
10/1
1
11/1
2
150
175
200
225
250
275
Production Consumption
MMT
?
United States, Argentina, and Brazil Dominate Growth In Global Soybean Production
00/01
01/02
02/03
03/04
04/05
05/06
06/07
07/08
08/09
09/10
10/11
0
50
100
150
200
250
300
ROW Argentina, Brazil and U.S.
MMT
Soybean Production Growth: Area in South America, Yield in the U.S.
Argentina Brazil U.S.0
5
10
15
20
25
30
35
Area Yield
MMT
Period is over the last 10 years
China: All of the Growth In Soybean Import Demand
00/01
01/02
02/03
03/04
04/05
05/06
06/07
07/08
08/09
09/10
10/11
20
40
60
80
100
ROW China
MMT
Soybean Stocks Available to The World: Record Low in 10/11
05/06 06/07 07/08 08/09 09/10 10/110
10
20
30
United States Argentina Brazil
MMT
China: The Wild Card!
China: Feed Ingredient Imports Double
2005 2006 2007 2008 2009 2010 -
10
20
30
40
50
60
70
80
Oilseeds Cereals & Energy Sources (Cassava)Protein Crops and Meals DDGs
MMT
China: Hog Operations Turn Profitable On Soaring Hog Prices Relative to Corn
0
2
4
6
8
10
12Hog/Corn Ratio
Breakeven Ratio
China’s Corn Imports: Economics Or Policy
200
225
250
275
300
325
350
375
400
0
100
200
300
400
500
600
U.S. Exports To China Imported U.S. Price
Over 1 MMT of U.S. purchases
$/MTU.S.
Exports TMT
Thank you!