Ag Decision Maker January 2016 Updates

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Business Solutions for Farms and Agribusiness from Iowa State University Extension and Outreach

January Newsletter (pdf)

Iowa Farm Outlook

Outlook Information for Crops and Livestock

January Newsletter (pdf)

LivestockBig Supply, Strong Dollar Pressure Hog Prices
CropsCrop Markets Looking for a Turnaround


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Shrinking Numbers (1/12/16)

Chad Hart, ISU Extension Grain Marketing Economist, provides a summary of the latest USDA reports.

Hart_Chad-thumbThe January USDA reports provide the final production estimates for last year’s crops and an update on current and projected crop usage. With today’s reports, USDA found a number of areas to shrink. Starting with corn, final planting area was established at 88 million acres, down 400,000 from previous estimates. The national corn yield estimate was reduced by nearly a bushel to 168.4 bushels per harvested acre. That combination reduced national corn production by 53 million bushels to 13.6 billion bushels. So last year’s corn crop is still the 3rd largest on record, but it is a little smaller than first measured. Corn demand was also reduced in the export and food, seed, and other industrial uses categories. Overall, demand was lowered by 60 million bushels, while supplies only slipped by 43 million. So corn ending stocks for the 2015/16 marketing year were raised by 17 million bushels to 1.8 billion. And the midpoint of the season-average price range was dropped to $3.60 per bushel, down 5 cents from the previous estimate.

For soybeans, in general is the same. Planted area was reduced by 500,000 acres to 82.7 million acres. The national soybean yield was set at 48 bushels per acre, down 0.3 bushels. Total soybean supplies fell 51 million bushels to 4.15 billion. Soybean exports were lowered 25 million bushels, while seed and residual use dropped 2 million. However, unlike corn, the drop in supplies exceeded the drop in demand. So soybean ending stocks for 2015/16 were lowered to 440 million. But USDA moved the midpoint of their season-average price range lowered to more closely match recent futures prices, with the current midpoint at $8.80 per bushel, down 10 cents.

Thinking forward to the 2016 planting season, one of the bigger items in today’s report was the winter wheat acreage. Cropland sown to winter wheat is not generally available for corn and soybean production (unless winterkill hits hard or the area has potential for double cropping). This fall’s wheat planting came in at 36.6 million acres, down 2.85 million from the previous year. So there will be more available for corn and soybean production this spring, especially in the Plains states.

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Ag Decision Maker website updates for December

Ag Decision Maker

Business Solutions for Farms and Agribusiness from Iowa State University Extension and Outreach

December Newsletter (pdf)

New and Updated Files


Iowa Farm Outlook

Outlook Information for Crops and Livestock

December Newsletter (pdf)

LivestockReplacement Quality Heifer Prices Supported by Latest Data
CropsDecember is All about Demand


CARD – Agricultural Policy Review

A New Risk Management Tool for Crop Producers
The Unintended Consequences of Household Phosphate Bans
The Commonalities and Differences between Chinese and US Agriculture
China’s Importance in US Ag Markets
Degraded Water Quality in Lakes: Consequences for Use


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Ag Decision Maker website updates for November

Ag Decision Maker

Business Solutions for Farms and Agribusiness from Iowa State University Extension and Outreach

November Newsletter (pdf)

Iowa Farm Outlook

Outlook Information for Crops and Livestock

November Newsletter (pdf)

LivestockFed Cattle Market Regional Comparisons
CropsAccelerating through the Harvest Season


AgMRC Renewable Fuels Monthly Report

Uptrend in U.S. Gasoline Use Lifts Ethanol Demand
Revisiting the Impact of Biofuels on Agriculture


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Big Crops Get Bigger (11/10/15)

Chad Hart, ISU Extension Grain Marketing Economist, provides a summary of the latest USDA reports.

Hart_Chad-thumbThe November update from USDA found bigger corn and soybean crops than previously estimated. The national corn yield was raised to 169.3 bushels per acre, which added roughly 100 million bushels to estimated production. State-level yield estimates were higher in the northern and western Corn Belt, but lower to the south and east. The Iowa corn yield was set at 189 bushels per acre, which would be a record. The national soybean yield was also increased significantly, to 48.3 bushels per acre, adding again nearly 100 million bushels to the national total. The yield increases were more uniform across the country for soybeans, but Iowa is again projected to see a record yield for soybeans as well.

The supply strength, however, was coupled with some demand weakness. For corn, export and ethanol demand was reduced by a combined 125 million bushels. While feed demand increased 25 million bushels, the growth was not enough to offset the losses. For soybeans, USDA raised both crush and export demand from previous estimates, but the export number remains well below last year’s level. Ending stocks grew for both crops. Corn ending stocks were projected at 1.76 billion bushels. Soybean ending stocks were set at 465 million bushels. And the season-average prices estimates were lowered as well. The midpoints on the price ranges now set at $3.65 per bushel for corn (down 15 cents) and $8.90 per bushel for soybeans (down 25 cents).

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Ag Decision Maker website updates for October

Ag Decision Maker

Business Solutions for Farms and Agribusiness from Iowa State University Extension and Outreach

October Newsletter (pdf)

New and Updated Files


Iowa Farm Outlook

Outlook Information for Crops and Livestock

October Newsletter (pdf)

Livestock — Hogs & Pigs Report: As Expected Inventories Larger
Crops —
Preparing for Harvest


AgMRC Renewable Fuels Monthly Report

Ethanol Export Trends and Prospects
The Clean Power Plan: What, Why and How
Prices, Profitability and Supply/Demand


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Acreage Adjustment (10/9/15)

Chad Hart, ISU Extension Grain Marketing Economist, provides a summary of the latest USDA reports.

Hart_Chad-thumbIt took until the October reports, but USDA adjusted its crop acreage estimates for corn and soybeans down. Corn area was reduced by a half of a million acres. Soybeans lost 1.1 million acres. These moves more than offset the slight yield bump USDA projected. The national corn yield estimate was raised a half of a bushel to 168 bushels per acre. The national soybean yield estimate increased a tenth of a bushel to 47.2 bushels per acre. National corn production was lowered by 30 million bushels; national soybean production was reduced by 47 million bushels.

There were no adjustments made to new crop corn demand. So the drop in production led to a slight increase in USDA’s projection for the marketing year average price. The midpoint of their price range now sits at $3.80 per bushel, up 5 cents from last month. New crop soybean demand took a hit though. While domestic crush increased 10 million bushels, soybean exports were dropped by 50 million bushels. And USDA held firm on their soybean marketing year price range, with the midpoint remaining at $9.15 per bushel.

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Mixed News in the Reports (9/11/15)

Chad Hart, ISU Extension Grain Marketing Economist, provides a summary of the latest USDA reports.

Hart_Chad-thumbDemand for the 2014 crops came out a little stronger, but the prospects for the 2015 crop production remain at or above trade expectations. Starting with demand for the old crop, the estimates show a little across-the-board surge to finish out the marketing year. Corn demand via ethanol was raised 5 million bushels; corn usage in sweeteners and other food products rose 10 million bushels; and exports jumped 25 million bushels. For soybeans, old crop demand increased both domestically (up 23 million bushels) and internationally (up 10 million bushels). The increase in demand lowered ending stocks going into the 2015 marketing year. But the impact on the season-average price was rather small, with the corn price lowered 2 cents to $3.68 per bushel, while the soybean price was raised a penny to $10.06 per bushel.

Looking forward to this fall’s harvest, USDA’s projections were reduced on the corn side, but increased for soybeans. The national corn yield estimate was dropped to 167.5 bushels per acre. While record yields are still being projected for several states, the conditions through August resulted a one to three bushel reduction in expected yields across the upper Midwest. Overall, corn production is estimated at 13.585 billion bushels, down roughly 100 million from last month and down 630 million from last year. But that is still strong enough to be the 3rd largest corn crop in U.S. history. The national soybean yield estimate rose to 47.1 bushels per acre, up 0.2 bushels. Iowa, Illinois, and Indiana soybean yields were all raised by a bushel, with Iowa projected at a record 53 bushels per acre. The current soybean crop estimate puts U.S. total production just 34 million bushels below last year’s record. So the supply side of the market remains robust.

The demand outlook for the 2015 crops was mixed. Soybean demand is up slightly, as domestic usage was raised 8 million bushels. The projection for soybean exports was held steady as 1.725 billion bushels, down 110 million from last year. For corn, feed and residual demand was lowered by 25 million bushels. But corn sweetener demand was expected to rise by 5 million bushels and exports were held steady with last month’s projections. The projected ending stocks for the 2015/16 marketing year now stand at 1.59 billion bushels for corn, down 121 million from last month, and 450 million bushels for soybeans, down 20 million from last month. Based on these adjustments, USDA raised the midpoint on their season-average price range for corn back to $3.75 per bushel, but kept the soybean price at $9.15 per bushel. Futures prices before the release of the reports had pointed to 2015/16 season-average prices below those levels, indicating corn in the $3.50 range and soybeans around $8.25-8.50. So the USDA report does offer some hope for slightly higher prices as we move through the marketing year, but the improvement will not be very large.

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Ag Decision Maker website updates for August

Ag Decision Maker

Business Solutions for Farms and Agribusiness from Iowa State University Extension and Outreach

August Newsletter (pdf)

New and Updated Files


Iowa Farm Outlook

Outlook Information for Crops and Livestock

August Newsletter (pdf)

LivestockBeef Cattle Herd Expansion Underway but Supplies Still Remain Historically Tight
CropsThe Great Debate: Does Too Much Rain Make Too Little Grain?


AgMRC Renewable Fuels Monthly Report

Caution Signs in Feedstock Costs for Biofuels
Declining Corn and Ethanol Prices Change the Profitability Picture
Prices, Profitability and Supply/Demand


Choices

Theme Overview: Agricultural Grain Transportation: Are We Underinvesting and Why?

Theme Overview: Revisiting the Evidence and Potential Solutions on Climate Change


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Trade Expected Smaller Crops, Got Bigger Ones (8/12/15)

Chad Hart, ISU Extension Grain Marketing Economist, provides a summary of the latest USDA reports.

Hart_Chad-thumbIn preparation for the release of the August USDA crop reports, the see-saw of uncertainty about crop production and yields went through another up-and-down cycle. The release of the reports accelerated the down cycle. The trade had anticipated smaller crop estimates from USDA, with the average estimates weighing in with yields of 164.5 bushels per acre for corn and 44.7 bushels per acre for soybeans. USDA reported yield estimates of 168.8 bushels per acre for corn and 46.9 bushels per acre for soybeans. Even with a slight downshift in soybean plantings, corn and soybean production estimates increased and put the 2015 crop year on pace to be a very strong production year despite all of the weather issues. And while there was some positive news on the demand front with feed and ethanol demand increasing, stock levels are on the rise and price estimates retreated. USDA’s season-average price estimates for the 2015/16 crops dropped by 10 cents for both corn and soybeans. They now stand at $3.65 per bushel for corn and $9.15 per bushel for soybeans.

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