Corn Outlook February, 2018
Corn Outlook February 2018 Historical Price Reference Fundamental Backdrop Seasonal Tendency Summary 2
Historical Price Reference Where are Corn Prices Currently, And Where are they Historically? 3
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USDA Supply/Demand Report : February 8, 2018 7
Fundamental Backdrop U.S. Corn Balance Sheet in Million Bushels Crop Year 2016/2017 2017/2018 January February Change January February Change Area (Million Acres) Planted 94 94 0 90.2 90.2 0 Harvested 86.7 86.7 0 82.7 82.7 0 Yield (Bushels/Acre) 174.6 174.6 0 176.6 176.6 0 Beginning Stocks 1737 1737 0 2293 2293 0 Production 15148 15148 0 14604 14604 0 Imports 57 57 0 50 50 0 Supply, Total 16942 16942 0 16947 16947 0 Feed & Residual 5467 5467 0 5550 5550 0 Food, Seed & Industrial 6889 6889 0 6995 6995 0 Ethanol for Fuel 5439 5439 0 5525 5525 0 Domestic Total 12356 12356 0 12545 12545 0 Total Exports 2293 2293 0 1925 2050 125 Use, Total 14649 14649 0 14470 14595 125 Ending Stocks 2293 2293 0 2477 2352-125 Stocks/Usage Ratio 15.65% 15.65% 0.00% 17.12% 16.12% -1.00% 8
Actual USDA vs. Estimates 2017/18 Ending Stocks Estimates February January 2016-17 USDA Average Range USDA USDA Corn 2.352 2.467 2.377-2.550 2.477 2.293 Soybeans 0.530 0.492 0.455-0.540 0.470 0.302 Wheat 1.009 0.993 0.974-1.014 0.989 1.181 9
Domestic Supply/Demand Fundamentals? 10
1,000 Metric Tons U.S. Corn Ending Stocks (Updated February 8, 2018) 140,000 Source: USDA Foreign Agricultural Service 120,000 100,000 80,000 60,000 40,000 20,000 0 1960 1963 1966 1969 1972 1975 1978 1981 1984 1987 1990 1993 1996 1999 2002 2005 2008 2011 2014 2017 11
U.S. Corn Stocks/Use Ratio (Updated February 8, 2018) 70% 60% 50% 40% 30% 20% 10% Source: USDA Foreign Agricultural Service 0% 1960 1963 1966 1969 1972 1975 1978 1981 1984 1987 1990 1993 1996 1999 2002 2005 2008 2011 2014 2017 12
Bushels Per Acre U.S. Corn Trendline Yield (Updated February 8, 2018) 200 Source: USDA Economic Research Service 180 160 140 120 100 80 Source: USDA World Agricultural Outlook Board 60 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 13
100,000 Bushels Total U.S. Domestic Corn Use (Updated February 8, 2018) 14000 Source: USDA World Agricultural Outlook Board & Economic Research Service 12000 10000 Ethanol & by-products Other Food, Seed & Industrial Feed and Residual 8000 6000 4000 2000 0 1972 1975 1978 1981 1984 1987 1990 1993 1996 1999 2002 2005 2008 2011 2014 2017 14
100,000 Bushels U.S. Feed and Residual Corn Use 7000 6000 (Updated February 8, 2018) Source: USDA World Agricultural Outlook Board & Economic Research Service Feed and Residual 5000 4000 3000 2000 1000 0 1972 1975 1978 1981 1984 1987 1990 1993 1996 1999 2002 2005 2008 2011 2014 2017 15
100,000 Bushels U.S. Corn Consumption for Ethanol (Updated February 8, 2018) 6000 Source: USDA Economic Research Service 5000 4000 3000 2000 1000 0 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 16
The following tables outline changes to the Global balance sheet for 2016/17 crop year & 2017/18 crop year
World Corn Balance Sheet in Million Metric Tons Crop Year 2016/2017 February, 2018 Supply Use Region Beginning Stocks Production Imports Feed Exports Ending Stocks Stocks/Use World 0-0.02 0.1 0.08-1 1.01 0.12% United States 0 0 0 0 0 0 Major Exporters 0 0 0.15 0-1 1.15 Argentina 0 0 0 0 0 0 South Africa 0 0 0 0 0 0 Major Importers 0 0.01-0.01 0 0 0 Egypt 0 0 0 0 0 0 EU-27 0 0 0 0 0 0 Japan 0 0 0 0 0 0 Mexico 0 0.01 0 0 0 0.01 Southeast Asia 0 0-0.02 0 0-0.01 South Korea 0 0 0 0 0 0 Selected Other Brazil 0 0 0.15 0-1 1.15 Canada 0 0 0 0 0 0 China 0 0 0 0 0 0 FSU-12 0-0.03 0 0.1 0-0.14 Ukraine 0-0.03 0 0 0-0.03 Net Changes from Prior Month 18
World Corn Balance Sheet in Million Metric Tons Crop Year 2017/2018 February, 2018 Supply Use Region Beginning Stocks Production Imports Feed Exports Ending Stocks Stocks/Use World 1.01-2.83 0.7 0 2.38-3.48-0.36% United States 0 0 0 0 3.17-3.18 Major Exporters 1.15-3 0.1-0.5-0.5-0.75 Argentina 0-3 0-0.5-1.5-1 South Africa 0 0 0 0 0 0 Major Importers 0 0.4 0.2 0.3 0 0.29 Egypt 0 0 0 0 0 0 EU-27 0 0 0.2 0.2 0 0 Japan 0 0 0 0 0 0 Mexico 0.01 0.3 0 0 0 0.31 Southeast Asia -0.01 0.1 0 0.1 0-0.02 South Korea 0 0 0 0 0 0 Selected Other Brazil 1.15 0 0.1 0 1 0.25 Canada 0 0 0 0 0 0 China 0 0 0 0 0 0 FSU-12-0.14-0.48 0-0.2-0.3-0.12 Ukraine -0.03-0.88 0-0.3-0.5-0.12 Net Changes from Prior Month 19
What About Global Supply/Demand Fundamentals? 20
1,000 Metric Tons World Corn Ending Stocks (Updated February 8, 2018) 250,000 Source: USDA Foreign Agricultural Service 200,000 150,000 100,000 50,000 0 1960 1963 1966 1969 1972 1975 1978 1981 1984 1987 1990 1993 1996 1999 2002 2005 2008 2011 2014 2017 21
World Corn Stocks/Use Ratio (Updated February 8, 2018) 50% 45% 40% 35% 30% 25% 20% 15% 10% 5% Source: USDA Foreign Agricultural Service 0% 1960 1963 1966 1969 1972 1975 1978 1981 1984 1987 1990 1993 1996 1999 2002 2005 2008 2011 2014 2017 22
70% World vs U.S. Corn Stocks/Use Ratio (Updated February 8, 2018) 60% 50% World U.S. 40% 30% 20% 10% Source: USDA Foreign Agricultural Service 0% 1960 1963 1966 1969 1972 1975 1978 1981 1984 1987 1990 1993 1996 1999 2002 2005 2008 2011 2014 2017 23
1,000 Metric Tons 600,000 Major Foreign Corn Producers (Updated February 8, 2018) Source: USDA Foreign Agricultural Service 500,000 Southeast Asia Mexico Argentina 400,000 Brazil E.U. China 300,000 200,000 100,000 0 1960 1963 1966 1969 1972 1975 1978 1981 1984 1987 1990 1993 1996 1999 2002 2005 2008 2011 2014 2017 24
1,000 Metric Tons 90,000 80,000 Major Foreign Corn Exporters Annual Exports (Updated February 8, 2018) Source: USDA Foreign Agricultural Service 70,000 60,000 Ukraine Argentina Brazil 50,000 40,000 30,000 20,000 10,000 0 1960 1963 1966 1969 1972 1975 1978 1981 1984 1987 1990 1993 1996 1999 2002 2005 2008 2011 2014 2017 25
1,000 Metric Tons Brazil Corn Production (Updated February 8, 2018) 120,000 Source: USDA Foreign Agricultural Service 100,000 80,000 60,000 40,000 20,000 0 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 26
1,000 Metric Tons Argentina Corn Production (Updated February 8, 2018) 45,000 Source: USDA Foreign Agricultural Service 40,000 35,000 30,000 25,000 20,000 15,000 10,000 5,000 0 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 27
1,000 Metric Tons Brazil Corn Exports 40,000 (Updated February 8, 2018) Source: USDA Foreign Agricultural Service 35,000 30,000 25,000 20,000 15,000 10,000 5,000 0 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 28
1,000 Metric Tons Argentina Corn Exports 30,000 (Updated February 8, 2018) Source: USDA Foreign Agricultural Service 25,000 20,000 15,000 10,000 5,000 0 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 29
1,000 Metric Tons 90,000 80,000 E.U. Egypt Southeast Asia Major Corn Importers (Updated February 8, 2018) Source: USDA Foreign Agricultural Service 70,000 South Korea Mexico Japan 60,000 50,000 40,000 30,000 20,000 10,000 0 1960 1963 1966 1969 1972 1975 1978 1981 1984 1987 1990 1993 1996 1999 2002 2005 2008 2011 2014 2017 30
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Summary The USDA released the February WASDE report and raised the U.S. corn export expectation by 125 million bushels, the total estimate now stands at 2,050 million. The report cited increased U.S. competitiveness and reduced export movement in Argentina and Ukraine as support for the move. Also weekly U.S. corn export sales the last month have been strong and reflect three of the top four weekly totals so far this marketing year. As a result, ending stocks were lower to 2,352 million bushels. Globally, persistent heat and dryness led the USDA to reduce the Argentinian production projection, while the Brazilian estimate was left unchanged. 33
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