2016 Grains & Oilseeds Outlook. The global outlook remains positive. 12/7/2015. Matthew C. Roberts

Transcription

1 12/7/ Grains & Oilseeds Outlook Matthew C. Roberts The global outlook remains positive

2 12/7/215 Chinese Meat Consumption Million Metric Tonnes CATTLE SWINE BROILER Chinese Oilseed Consumption Growing by 9.8%/yr since / / / / / / / / / /2 2/21 21/22 22/23 23/24 24/25 25/26 26/27 27/28 28/29 29/21 21/ / / / /215 Cottonseed Peanut Rapeseed Sunflowerseed Soybean 6 Chinese Grain Consumption Climbing by 4%/year since But demand isn t everything. Chinese de-stocking of corn? Argentine de-stocking of grains? Two years of very good SouthAm weather. Strongest El Nino on record 1 199/ / / / / / / / / /2 2/21 21/22 22/23 23/24 24/25 25/26 26/27 27/28 28/29 29/21 21/ / / / /215 Rice, Milled Wheat Corn

3 12/7/215 Crude & Nat Gas Markets Remain Very Weak Strong US production growth outstripping demand growth. Saudi Arabia is unwilling to act. But drilling has declined substantially US oil production declined in Sept vs. Oct. Global Oil Consumption Continues to Climb World Liquid Fuels Consumption million barrels per day (MMbbl/d) Change in U.S. consumption (right axis) Change in China consumption (right axis) Change in other consumption (right axis) Total world consumption (left axis) annual change (MMbbl/d) Forecast Source: Short-Term Energy Outlook, October World Crude Oil and Liquid Fuels Production Growth million barrels per day 2.5 Forecast OPEC countries North America Russia and Caspian Sea Latin America North Sea Other Non-OPEC Source: Short-Term Energy Outlook, October

4 12/7/215 U.S. Commercial Crude Oil Stocks million barrels 5 Forecast Jan 21 Jan 211 Jan 212 Jan 213 Jan 214 Jan 215 Jan 216 Note: Colored band around storage levels represents the range between the minimum and maximum from Jan Dec Source: Short-Term Energy Outlook, October U.S. Gasoline and Distillate Inventories million barrels Total motor gasoline inventory Forecast Total distillate fuel inventory 8 6 Jan 21 Jan 211 Jan 212 Jan 213 Jan 214 Jan 215 Jan 216 Note: Colored bands around storage levels represent the range between the minimum and Source: Short-Term Energy Outlook, October

5 12/7/215 Oil Prices will remain weak ME uncertainty now generally away from oil-producing areas. Declines in US production will start to be felt in 2/3Q216 Prices to $5-6 only Calendar 215 EPA Rulemaking Has Smaller Cuts Total Convent l Biofuel (min 2% GHG reduc after 21) Advanced Biofuel (min 5% GHG reduction) Cellulosic Biofuel (min 6% GHG reduction) Biobased Diesel n/a 2.5 n/a 15. n/a 5.5 n/a Ethanol Production Has Always Exceeded Mandates ' '5 '1 '15 Matthew C. Roberts, AED Economics 2 5

6 12/7/215 How Fast Will Feed Use Grow? Corn Exports ' '5 '1 ' : Three Highest Production s, Yet Percent Production Use Stocks-to-Use Ratio (%) Billion Bushels

7 12/7/215 Corn Prices Can t Catch a Break. Best hope for higher prices is continued S.Am weather declines. De-stocking creates huge uncertainty Temporarily Storage gains are best opportunities 216/17 strong demand remains in place. Soybeans Domestic Demand Flat 2,5 2, 1,5 1, ' '5 '1 ' Soy exports off 13m. 2, 1, ,6 1, ,2 1, ' '5 '1 '15 Percent Record Soybean Production, Weak Exports Leave Large Stocks Production 3.92 Stocks-to-Use Ratio (%) Use Bn Bushels 7

8 12/7/215 Global Soybean Production & Use Remains Incredible Percent 7 6 Million Metric Tons 35 Production Stocks-to-Use Ratio (%) Use Soybeans have staged small rally into December The EPA taketh away and the EPA giveth. Brazilian weather continues to decline Corn Competition Bites into US Wheat Demand Percent Stocks-to-Use Ratio (%) Billion Bushels Use 2.2 Production Plan on low prices $3.5 corn $9. soybeans $5. wheat Build working capital Pay taxes. Lower land costs. Fix interest rates

9 12/7/215 Questions? Matt Roberts (614)