Grain Market Outlook Information KSU Agricultural Today
Grain Market Outlook Information KSU Agricultural Today Radio Program Daniel O’Brien, Extension Agricultural Economist, K-State Research and Extension Friday, March 11, 2011 I. Current Status of the U.S. Hard Red Winter Wheat Crop in Kansas, Oklahoma & Texas II. March 10th USDA WASDE Report results & Current Price Trends for Corn, Wheat & Soybeans ___________________________________________________________________________ I. Current Status of U.S. Hard Red Winter Wheat Crop in Kansas, Oklahoma, & Texas A. Winter Wheat Conditions in Kansas, Oklahoma & Texas at the end of February 2011 State
Kansas
Date
Very Poor
Poor
Fair
Good
Excellent
3/6/2011
17%
23%
35%
23%
2%
40% Poor-Very Poor 3/7/2010
1%
7%
8% Poor to Very Poor
Oklahoma
3/6/2011
7%
34%
41% Poor-Very Poor 3/7/2010
2%
3/6/2011
26%
30%
56% Poor-Very Poor 3/7/2010
5%
32%
18% Poor to Very Poor
19%
37% Fair 28%
19 bu/ac
45 bu/ac
29 bu/ac
35 bu/ac
20 bu/ac
3% 8%
65% Good to Excellent
26%
15%
26% Fair 37% Fair
33 bu/ac
22% Gd-Ex 57%
28% Fair
37%
10%
60% Good to Excellent
37%
13%
Low Yield since 1996
25% Gd-Ex 50%
32% Fair
5%
7% Poor to Very Poor
Texas
35% Fair
Yield
3%
18% Gd-Ex 36%
9%
45% Good to Excellent
B. Kansas Wheat Wind & Freeze Damage as of February 27, 2011 State
Date
None
Light
Moderate
Severe
Wind Damage
3/6/2011
79%
17%
4%
0%
Freeze Damage
3/6/2011
77%
15%
7%
1%
C. Kansas, Oklahoma & Texas Wheat Production for 2007-2010 (1,000 bushels = K) State
2007
2008
2009
2010
67% 2010
4 Yr Avg
67% 4 Yr Avg
Kansas
284 K
356 K
370 K
360 K
241 K
343 K
230 K
Oklahoma
98 K
167 K
77 K
121 K
81 K
116 K
78 K
Texas
141 K
99 K
61 K
128 K
86 K
107K
72 K
3 State Total
523 K
622 K
508 K
609 K
408 K
566 K
380 K
2,051 K
2,499 K
2,216 K
2,208 K
Dn 201 K
2,244 K
Dn 186 K
25%
25%
23%
28%
U.S. Prodn % US Prodn
25% Page | 1
D. Kansas Soil Moisture Situation as of March 6, 2011 “Kansas topsoil moisture supplies statewide were rated as 19 percent very short, 24 percent short, 50 percent adequate, and 7 percent surplus as of Sunday. In the western districts, topsoil moisture was reported to be over 80 percent short to very short.” “Kansas subsoil moisture supplies were rated as 19 percent very short, 26 percent short, 52 percent adequate, and 3 percent surplus.” (Note especially west central KS & eastern Colorado severe drought conditions). E. Oklahoma Soil Moisture Situation as of March 6, 2011 “Topsoil and subsoil moisture conditions continued to be rated mostly short to very short for the past month with 81% of topsoil and 82% of subsoil rated short to very short.” (See Oklahoma Panhandle – moderate drought, and central – south central parts of the state) F. Texas Soil Moisture Situation as of March 6, 2011 Of 15 crop reporting regions in Texas, 12 (80%) are rated as 60% short to very short. Amarillo region OK, but at least abnormally dry in many parts of the state.
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II. March 10th WASDE & Analysis of Recent $ Trends for U.S. Corn, Wheat and Soybeans MAY 2011 Corn Futures (CBOT)
(December 10, 2010 to March 10, 2011) March 10th USDA WASDE Report Results: – U.S. Corn & Grain Sorghum S‐D Balance Sheets: NO CHANGES MY 2010/11 End Stocks = 675 mb, % End Stocks / Use = 5% (historic low) MY 2010/11 Avg Cash Price = $5.15‐$5.65 ($5.40 middle)
Higher Trend since Friday, March 4th
Friday, March 4th Closing $ = $7.28 Record high contract close on 3/3 of $7.36 ¾ Thursday, March 10th Closing $ = $6.82 ¾
New Crop DEC 2011 Corn Futures (9/8/10 to 3/10/11)
– World Coarse Grains S‐D Balance Sheets MY 2010/11 production, total supply, trade & total use all lowered in March versus February WASDE report o End stocks up slightly to 159 mmt (vs 155.5 in Feb WASDE) o End stocks‐to‐use @ 25.2% (vs 24.6% in Feb WASDE) Impact of higher feedgrain prices (i.e., price rationing) affecting usage – Upcoming USDA report: USDA Prospective Planting Report on March 31st U.S. corn export Issues (USDA FAS export data through March 3rd ): – Cumulative shipments for MY 2010/11 down 1% (weekly exports up 25%) – Outstanding export sales for MY 2010/11 up 22%
New Crop DEC 2011 Corn Futures Thursday, 3/10/2011 Close = $5.87 ¼
Recent High‐Low Trading Range High‐ $6.19 ¼ on February 9th Low ‐ $5.74 ¾ on February 23rd Issue: Any combination of 2011 planting & growing season weather concerns would likely take DEC 2011 corn futures above these levels to $6.50 or $7.00+
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MAY 2011 HRW Wheat Futures (KCBT)
(December 10, 2010 to March 10, 2011) March 10th USDA WASDE Report Results: – U.S. Wheat S‐D Balance Sheets: Marginally lower exports & higher end stocks MY 2010/11 Exports = 1.275 bln bu (vs 1.3 bb in Feb WASDE) MY 2010/11 End Stocks = 843 mb (vs 818 mb in Feb WASDE MY 2010/11 % End Stocks / Use = 34.4% (vs 33% in Feb WASDE) MY 2010/11 Avg Cash Price = $5.60‐$5.80 ($5.70 middle) – NO CHANGE – World Wheat S‐D Balance Sheets MY 2010/11 production, total supply & ending Stocks increased versus February WASDE report (World wheat trade and total use up) o End stocks up 4 mmt to 181.9 mmt (vs 177.8 in Feb WASDE) o End stocks‐to‐use @ 27.4% (vs 26.7% in Feb WASDE) Impact of higher wheat prices, political unrest & higher feedgrain prices affecting trade & usage
Lower Trend since Friday, Feb. 14th Monday, Feb. 14 High $ = $10.00 Thursday, March 10th Closing $ = $8.37 Still high prices, but a weaker trend
New Crop July 2011 KCBT Wheat Futures (9/8/10 to 3/10/11)
– U.S. Hard Red Winter Wheat export business (through March 3rd ): Cumulative Shipments of HRW Wheat exports for MY 2010/11 up 67% o weekly shipments up 55% Outstanding Sales of HRW Wheat export for MY 2010/11 up 148% – U.S. Total Wheat export business (through March 3rd): Cumulative Shipments of U.S. Wheat exports for MY 2010/11 o weekly shipments up 9% Outstanding Sales of U.S. Wheat exports for MY 2010/11
up 44% up 122%
New Crop July 2011 Wheat Futures Thursday, 3/3/2011 Close = $8.47 ½ Nearly identical price pattern as May 2011 KCBT wheat – Highs over $10 on Feb. 9, 10 & 14, followed by lows on Feb. 24th of $8.80 ½ – After trending higher to $9.38, prices have now fallen to $8.47 – Volatile, up & down pattern likely through Spring 2011, waiting to determine size & condition of 2011 U.S. HRW crop.
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MAY 2011 Soybean Futures (CBOT)
(December 10, 2010 to March 10, 2011) March 10th USDA WASDE Report Results: – U.S. Soybean S‐D Balance Sheets: SMALL CHANGES MY 2010/11 End Stocks = 140 mb, % S/U = 4.2% (historic low) MY 2010/11 Avg Cash Price = $11.10‐$12.10 ($11.60 middle) – World Soybean S‐D Balance Sheets MY 2010/11 production, crush & ending stocks higher, with beginning stocks, & exports lower vs February WASDE report o End stocks up slightly to 58.33 mmt (vs 58.21 in Feb WASDE) o End stocks‐to‐use @ 22.7% (vs 22.8% in Feb WASDE) Impact of large available foreign supplies from South America & higher oilseed prices (i.e., price rationing) affecting U.S. usage – Upcoming report: USDA Prospective Planting Report on March 31st
Volatile, Lower Trend since Feb 9th WASDE
Wednesday, Feb. 9th high $ = $14.59 Thursday, March 10th Closing $ = $13.55 ½ (Trading Range: $14.59 on 2/9 to $13.11 on 2/22 & 24) As for KCBT wheat, still high prices, but a mixed market trend
U.S. Soybean export business (as of March 3rd ): – Cumulative Shipments of Soybean exports for MY 2010/11 up 2.5% (weekly sales down 21%) – Outstanding Sales of soybean exports for MY 2010/11 up 69%
New Crop NOV 2011 Soybeans (9/8/10 to 3/10/11) New Crop NOV 2011 Soybeans Thursday, 3/10/2011 Close = $13.21
U.S. Soybean Meal export business (as of March 3rd ): – Cumulative Shipments of SBM exports for MY 2010/11 (weekly shipments down 28%) – Outstanding Sales of SBM exports for MY 2010/11
Recent Volatility th High‐ $13.97 on Feb. 9 Low ‐ $12.74 ¼ on Feb. 22nd
down 24% down 15%
rd
U.S. Soybean Oil export business (as of March 3 ): – Cumulative Shipments of Soy Oil exports for MY 2010/11 down 3% – Outstanding Sales of Soy Oil exports for MY 2010/11 up 23%
*DEC 2011 Corn vs NOV 2011 Price Ratio* 2.25 ($13.21 ÷ $5.87 ¼ ) on 3/10/2011
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Kansas
Date
Very Poor
Poor
Fair
Good
Excellent
3/6/2011
17%
23%
35%
23%
2%
40% Poor-Very Poor 3/7/2010
1%
7%
8% Poor to Very Poor
Oklahoma
3/6/2011
7%
34%
41% Poor-Very Poor 3/7/2010
2%
3/6/2011
26%
30%
56% Poor-Very Poor 3/7/2010
5%
32%
18% Poor to Very Poor
19%
37% Fair 28%
19 bu/ac
45 bu/ac
29 bu/ac
35 bu/ac
20 bu/ac
3% 8%
65% Good to Excellent
26%
15%
26% Fair 37% Fair
33 bu/ac
22% Gd-Ex 57%
28% Fair
37%
10%
60% Good to Excellent
37%
13%
Low Yield since 1996
25% Gd-Ex 50%
32% Fair
5%
7% Poor to Very Poor
Texas
35% Fair
Yield
3%
18% Gd-Ex 36%
9%
45% Good to Excellent
B. Kansas Wheat Wind & Freeze Damage as of February 27, 2011 State
Date
None
Light
Moderate
Severe
Wind Damage
3/6/2011
79%
17%
4%
0%
Freeze Damage
3/6/2011
77%
15%
7%
1%
C. Kansas, Oklahoma & Texas Wheat Production for 2007-2010 (1,000 bushels = K) State
2007
2008
2009
2010
67% 2010
4 Yr Avg
67% 4 Yr Avg
Kansas
284 K
356 K
370 K
360 K
241 K
343 K
230 K
Oklahoma
98 K
167 K
77 K
121 K
81 K
116 K
78 K
Texas
141 K
99 K
61 K
128 K
86 K
107K
72 K
3 State Total
523 K
622 K
508 K
609 K
408 K
566 K
380 K
2,051 K
2,499 K
2,216 K
2,208 K
Dn 201 K
2,244 K
Dn 186 K
25%
25%
23%
28%
U.S. Prodn % US Prodn
25% Page | 1
D. Kansas Soil Moisture Situation as of March 6, 2011 “Kansas topsoil moisture supplies statewide were rated as 19 percent very short, 24 percent short, 50 percent adequate, and 7 percent surplus as of Sunday. In the western districts, topsoil moisture was reported to be over 80 percent short to very short.” “Kansas subsoil moisture supplies were rated as 19 percent very short, 26 percent short, 52 percent adequate, and 3 percent surplus.” (Note especially west central KS & eastern Colorado severe drought conditions). E. Oklahoma Soil Moisture Situation as of March 6, 2011 “Topsoil and subsoil moisture conditions continued to be rated mostly short to very short for the past month with 81% of topsoil and 82% of subsoil rated short to very short.” (See Oklahoma Panhandle – moderate drought, and central – south central parts of the state) F. Texas Soil Moisture Situation as of March 6, 2011 Of 15 crop reporting regions in Texas, 12 (80%) are rated as 60% short to very short. Amarillo region OK, but at least abnormally dry in many parts of the state.
Page | 2
II. March 10th WASDE & Analysis of Recent $ Trends for U.S. Corn, Wheat and Soybeans MAY 2011 Corn Futures (CBOT)
(December 10, 2010 to March 10, 2011) March 10th USDA WASDE Report Results: – U.S. Corn & Grain Sorghum S‐D Balance Sheets: NO CHANGES MY 2010/11 End Stocks = 675 mb, % End Stocks / Use = 5% (historic low) MY 2010/11 Avg Cash Price = $5.15‐$5.65 ($5.40 middle)
Higher Trend since Friday, March 4th
Friday, March 4th Closing $ = $7.28 Record high contract close on 3/3 of $7.36 ¾ Thursday, March 10th Closing $ = $6.82 ¾
New Crop DEC 2011 Corn Futures (9/8/10 to 3/10/11)
– World Coarse Grains S‐D Balance Sheets MY 2010/11 production, total supply, trade & total use all lowered in March versus February WASDE report o End stocks up slightly to 159 mmt (vs 155.5 in Feb WASDE) o End stocks‐to‐use @ 25.2% (vs 24.6% in Feb WASDE) Impact of higher feedgrain prices (i.e., price rationing) affecting usage – Upcoming USDA report: USDA Prospective Planting Report on March 31st U.S. corn export Issues (USDA FAS export data through March 3rd ): – Cumulative shipments for MY 2010/11 down 1% (weekly exports up 25%) – Outstanding export sales for MY 2010/11 up 22%
New Crop DEC 2011 Corn Futures Thursday, 3/10/2011 Close = $5.87 ¼
Recent High‐Low Trading Range High‐ $6.19 ¼ on February 9th Low ‐ $5.74 ¾ on February 23rd Issue: Any combination of 2011 planting & growing season weather concerns would likely take DEC 2011 corn futures above these levels to $6.50 or $7.00+
Page | 3
MAY 2011 HRW Wheat Futures (KCBT)
(December 10, 2010 to March 10, 2011) March 10th USDA WASDE Report Results: – U.S. Wheat S‐D Balance Sheets: Marginally lower exports & higher end stocks MY 2010/11 Exports = 1.275 bln bu (vs 1.3 bb in Feb WASDE) MY 2010/11 End Stocks = 843 mb (vs 818 mb in Feb WASDE MY 2010/11 % End Stocks / Use = 34.4% (vs 33% in Feb WASDE) MY 2010/11 Avg Cash Price = $5.60‐$5.80 ($5.70 middle) – NO CHANGE – World Wheat S‐D Balance Sheets MY 2010/11 production, total supply & ending Stocks increased versus February WASDE report (World wheat trade and total use up) o End stocks up 4 mmt to 181.9 mmt (vs 177.8 in Feb WASDE) o End stocks‐to‐use @ 27.4% (vs 26.7% in Feb WASDE) Impact of higher wheat prices, political unrest & higher feedgrain prices affecting trade & usage
Lower Trend since Friday, Feb. 14th Monday, Feb. 14 High $ = $10.00 Thursday, March 10th Closing $ = $8.37 Still high prices, but a weaker trend
New Crop July 2011 KCBT Wheat Futures (9/8/10 to 3/10/11)
– U.S. Hard Red Winter Wheat export business (through March 3rd ): Cumulative Shipments of HRW Wheat exports for MY 2010/11 up 67% o weekly shipments up 55% Outstanding Sales of HRW Wheat export for MY 2010/11 up 148% – U.S. Total Wheat export business (through March 3rd): Cumulative Shipments of U.S. Wheat exports for MY 2010/11 o weekly shipments up 9% Outstanding Sales of U.S. Wheat exports for MY 2010/11
up 44% up 122%
New Crop July 2011 Wheat Futures Thursday, 3/3/2011 Close = $8.47 ½ Nearly identical price pattern as May 2011 KCBT wheat – Highs over $10 on Feb. 9, 10 & 14, followed by lows on Feb. 24th of $8.80 ½ – After trending higher to $9.38, prices have now fallen to $8.47 – Volatile, up & down pattern likely through Spring 2011, waiting to determine size & condition of 2011 U.S. HRW crop.
Page | 4
MAY 2011 Soybean Futures (CBOT)
(December 10, 2010 to March 10, 2011) March 10th USDA WASDE Report Results: – U.S. Soybean S‐D Balance Sheets: SMALL CHANGES MY 2010/11 End Stocks = 140 mb, % S/U = 4.2% (historic low) MY 2010/11 Avg Cash Price = $11.10‐$12.10 ($11.60 middle) – World Soybean S‐D Balance Sheets MY 2010/11 production, crush & ending stocks higher, with beginning stocks, & exports lower vs February WASDE report o End stocks up slightly to 58.33 mmt (vs 58.21 in Feb WASDE) o End stocks‐to‐use @ 22.7% (vs 22.8% in Feb WASDE) Impact of large available foreign supplies from South America & higher oilseed prices (i.e., price rationing) affecting U.S. usage – Upcoming report: USDA Prospective Planting Report on March 31st
Volatile, Lower Trend since Feb 9th WASDE
Wednesday, Feb. 9th high $ = $14.59 Thursday, March 10th Closing $ = $13.55 ½ (Trading Range: $14.59 on 2/9 to $13.11 on 2/22 & 24) As for KCBT wheat, still high prices, but a mixed market trend
U.S. Soybean export business (as of March 3rd ): – Cumulative Shipments of Soybean exports for MY 2010/11 up 2.5% (weekly sales down 21%) – Outstanding Sales of soybean exports for MY 2010/11 up 69%
New Crop NOV 2011 Soybeans (9/8/10 to 3/10/11) New Crop NOV 2011 Soybeans Thursday, 3/10/2011 Close = $13.21
U.S. Soybean Meal export business (as of March 3rd ): – Cumulative Shipments of SBM exports for MY 2010/11 (weekly shipments down 28%) – Outstanding Sales of SBM exports for MY 2010/11
Recent Volatility th High‐ $13.97 on Feb. 9 Low ‐ $12.74 ¼ on Feb. 22nd
down 24% down 15%
rd
U.S. Soybean Oil export business (as of March 3 ): – Cumulative Shipments of Soy Oil exports for MY 2010/11 down 3% – Outstanding Sales of Soy Oil exports for MY 2010/11 up 23%
*DEC 2011 Corn vs NOV 2011 Price Ratio* 2.25 ($13.21 ÷ $5.87 ¼ ) on 3/10/2011
Page | 5
