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2012 Market Price Outlook

2012 Market Price Outlook. ISU Northern Research Farm Meeting Duncan, Iowa Mar. 8, 2012 Chad Hart Assistant Professor/Grain Markets Specialist chart@iastate.edu 515-294-9911. U.S. Corn Supply and Use. Source: USDA-WAOB, 2012 Unofficial Projections. U.S. Soybean Supply and Use.

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2012 Market Price Outlook

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  1. 2012 Market Price Outlook ISU Northern Research Farm Meeting Duncan, Iowa Mar. 8, 2012 Chad Hart Assistant Professor/Grain Markets Specialist chart@iastate.edu 515-294-9911

  2. U.S. Corn Supply and Use Source: USDA-WAOB, 2012 Unofficial Projections

  3. U.S. Soybean Supply and Use Source: USDA-WAOB, 2012 Unofficial Projections

  4. 2011 Corn Yields Source: USDA-NASS

  5. 2011 Soybean Yields Source: USDA-NASS

  6. World Corn Production Source: USDA-WAOB

  7. World Soybean Production Source: USDA-WAOB

  8. Corn vs. Wheat Source: CME Group, 3/7/2012

  9. Hog Crush Margin The Crush Margin is the return after the pig, corn and soybean meal costs. Carcass weight: 200 pounds Pig price: 50% of 5 mth out lean hog futures Corn: 10 bushels per pig Soybean meal: 150 pounds per pig Source: Shane Ellis, ISU Extension

  10. Cattle Crush Margin The Crush Margin is the return after the feeder steer and corn costs. Live weight: 1250 pounds Feeder weight: 750 pounds Corn: 50 bushels per head Source: Shane Ellis, ISU Extension

  11. Corn Export Shifts Source: USDA-FAS

  12. Soy Export Shifts Source: USDA-FAS

  13. Change of Export Pace

  14. Renewable Fuels Standard (RFS)

  15. Corn Grind for Ethanol Source: DOE-EIA

  16. Ethanol Blending Advantage

  17. U.S. Blended Gasoline Consumption 7.6 bil. gal. 7.4 bil. gal. Source: DOE-EIA, via USDA-ERS

  18. Projected 2011 Season-Average Corn Price Cost

  19. Projected 2011 Season-Average Soy Price Cost

  20. Projected 2012 Season-Average Corn Price Cost

  21. Projected 2012 Season-Average Soy Price Cost

  22. Iowa Corn Prices vs. Costs

  23. Iowa Soybean Prices vs. Costs

  24. Principal Crop Area Source: USDA-NASS

  25. States with Room to Grow Number is the difference in planted acres between 2008 and 2011

  26. Iowa Crop Margins

  27. 2012 Crop Prices

  28. Current Corn Futures 5.96 5.42 5.31 5.22 Source: CME Group, 3/7/2012

  29. Current Soybean Futures 12.41 12.10 11.75 11.53 Source: CME Group, 3/7/2012

  30. Thoughts for 2012 and Beyond • General economic conditions • Continued worldwide economic recovery is a major key for crop prices • US job recovery, European financial concerns • Supply/demand concerns • Worries about dry conditions in South America and in U.S. • Biofuel growth and energy demand • Corn has the upper hand in the acreage competition • Will supply be able to keep pace with demand? • 2011/12: USDA: Corn $6.20; Soy $11.70 • Futures (as of 3/7/12): Corn $5.96; Soy $12.10 • 2012/13: Futures (as of 3/7/12): Corn $5.42; Soy $12.41

  31. Thank you for your time!Any questions?My web site:http://www.econ.iastate.edu/~chart/Iowa Farm Outlook:http://www.econ.iastate.edu/ifo/Ag Decision Maker:http://www.extension.iastate.edu/agdm/

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