Grain-outlook 07-15-14 Corn

Corn Market Outlook in July 2014
Daniel O’Brien – Extension Agricultural Economist, KState Research and Extension
July 15, 2014
Summary
Since the USDA released its World Agricultural Supply and Demand Estimates (WASDE) report on Friday, July
11, 2014, U.S. corn market prices have responded negatively – moving sharply lower on the day of the report,
and then recovering some earlier losses the following trading day (i.e., Monday, July 14).
USDA U.S. Corn Forecast for “Old Crop” MY 2013/14: Adjustments were also made to several “current” MY
2013/14 usage categories, including projected ethanol corn use (5.175 million bushels or ‘mb’ – down 25 mb),
feed and residual use (5.175 billion bushels or ‘bb’ – down 125 mb), ending stocks (1.246 bb – up 100 mb),
ending stockstouse (9.2% up from 8.4%), and average price ($4.35$4.55 – down $0.10 per bushel).
USDA U.S. Corn Forecast for “New Crop” MY 2014/15: The USDA used forecasts of U.S. 2014 planted (91.641
million acres or ‘ma’) and harvested (83.839 ma) from the June 30th USDA Acreage report along with internal
projections of record high 2014 U.S. corn yields and production – figures that are still uncertain and subject to
change in upcoming USDA reports. The USDA projected 2014 U.S. corn production of 13.860 bb – down 65 mb
from a year earlier. Feed usage in “new crop” MY 2014/15 was projected to be 5.200 bb – down 75 mb from
the June WASDE. “New crop” ending stocks and ending stockstouse were also raised to 1.801 bb (up 75 mb)
and 13.5% (up from 12.9%), respectively. The USDA forecast that “new crop” MY 2014/15 average prices will
be $3.65$4.35 with a midpoint of $4.00 – down $0.20 /bu from June. As useful at these July report numbers
are, it is important to remember that the first actual surveybased projection of 2014 U.S. corn production will
be available in the August 12th USDA Crop Production and WASDE reports.
KSU U.S. Corn Forecast for “New Crop” MY 2014/15: KSU projections for “new crop” MY 2014/15 are as
follows: a) “Likely Production” Scenario: 50% prob. of 91.641 ma planted, 83.839 ma harvested, trend yields
of 159.4 bu/ac, 13.364 bb 2014 U.S. corn production, 14.640 bb U.S. corn supplies, 1.700 bb exports, 13.310 bb
total use, 1.330 bb ending stocks, 10.0% S/U, & $4.35 /bu; b) “High Production” Scenario: 35% prob. of 92.891
ma planted, 84.983 ma harvested, yields of 164.4 bu/ac, 13.971 bb 2014 U.S. corn production, 15.237 bb U.S.
corn supplies, 1.800 bb exports, 13.585 bb total use, 1.652 bb ending stocks, 12.2% S/U, & $4.10 /bu, and c)
“Low Production” Scenario: 15% prob. of 90.391 ma planted, 82.695 ma harvested, lower yields of 149.4
bu/ac, 12.355 bb 2014 U.S. corn production, 13.651 bb U.S. corn supplies, 1.400 bb exports, 12.525 bb total
use, 1.126 bb ending stocks, 9.0% S/U, & $4.90 /bu.
World Corn Total Supplies of 1,154 mmt in “new crop” MY 2014/15 are projected to be up from 1,123 mmt in
“current” MY 2013/14, and up from 1,003 mmt in MY 2012/13. Projected World corn ending stocks of 118.1
mmt (19.5% S/U) in “new crop” MY 2014/15 are up from 173.4 mmt (18.3% S/U) in “current” MY 2013/14, and
up from 138.2 mmt (16.0% S/U) in MY 2012/13. Combined “new crop” MY 2014/15 corn production for major
export competitors Brazil (74.0 mmt – down 4.0) and Argentina (26.0 mmt – up 2.0) is projected to be down
2.0 mmt. However, with a large 2014 U.S. corn crop harvest anticipated to be available in World grain export
markets in late winterspring 2015, and no major threats having yet emerged to U.S. or foreign corn
production so far in 2014, it is anticipated that World corn production and supplies will be larger and prices
sharply lower in MY 2014/15 than a year ago.
Although moderate concerns about crop development have emerged in parts of the upper Midwestern states
due to excessive moister, at this time these worries are not great enough to provide much support for corn
prices. Absent an unforeseen major downturn in 2014 U.S. corn production and price prospects, it seems
likely that U.S. corn markets are moving toward a low price period similar to the fall of 2008, a marketing year

I. U.S. Corn Market Situation and Outlook
IA. July 2014 USDA Reports & Projections for “New Crop” MY 2014/15
On July 11, 2014 the USDA World Agricultural Outlook Board (WAOB) released its July 2014 World
Agricultural Supply and Demand Estimates (WASDE) report – containing U.S. and World corn supplydemand
and price projections for both the “old crop” 2013/14 marketing year as well as for “new crop” MY 2014/15.
The “old crop” 2013/14 marketing year will end on August 31, 2014, while the “new crop” 2014/15 U.S. wheat
marketing year will last from September 1, 2014 through August 31, 2015. The July 11th WASDE report made
use of the information released in the June 30th National Agricultural Statistical Service (NASS) Acreage and
Quarterly Stocks reports. The July 11th WASDE report’s 2014 U.S. corn production forecast was based on the
projected planted and harvested acreage totals in the June 30th USDA NASS Acreage report, while information
in the June 30th USDA NASS Quarterly Stocks report was used in calculating adjustments to “old crop” MY
2013/14 U.S. corn usage and ending stocks in the July 11th USDA WASDE report.
The upcoming August 12th USDA NASS Crop Production report will provide the first infield survey based
forecast of the 2014 U.S. corn crop. This 2014 production estimate will provide the basis for the August 11th
WASDE report projection of U.S. corn supplydemand and prices.
IB. Corn Futures Trends Since the July 11th USDA Reports
The “old crop” SEPTEMBER 2014 corn futures market contract responded in negative manner to the
information in the July 11th USDA reports. On the day of the report – Friday, July 11th
– Chicago Board of Trade
(CBOT) SEPT 2014 corn futures prices opened at $3.86 per bushel, and traded as high as $3.88 1/2 and as low
as $3.75 ¾ during the session, before settling at $3.78 ¼ – down $0.08 for the day (Figure 1). The USDA report
findings were publicly released at approximately midsession, i.e., 12:00 noon eastern time (11:00 a.m. central)
that day. On Monday, July 14th SEPT 2014 corn futures prices first opened trade lower at $3.77 ¼, trading in a
range from a low of $3.74 to a high of $3.82 ¾, before closing at $3.81 ½ up $0.03 ¼ for the day. The low
price of $3.75 ¾ on July 11th was a record historic low for the SEPTEMBER 2014 corn futures contract.

Nov. 13, 2013 – July 14, 2014
Close = $3.81 ½ on 7/14/2014
DEC 2014 CME eCorn Futures
Oct. 17, 2013 – June 17, 2014
Close = $3.88 ¼ on 7/14/2014

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“New crop” DEC 2014 corn futures contract prices also responded in a negative manner to the
information in the July 11th USDA reports. On the day of the report, CBOT DEC 2014 corn futures prices
opened at $3.92 ½ per bushel, and traded as high as $3.94 ¾ and as low as $3.82 ½ during the session, before
settling at $3.84 ¾ – also down $0.08 for the day (Figure 1). On Monday, July 14th DEC 2014 corn futures
prices first opened trade lower at $3.83 ½, trading in a range from a low of $3.80 ¼ to a high of $3.89 ¼, before
closing at $3.88 ¼ up $0.03 ½ for the day. The low price of $3.80 ¼ was also a record historic low for the
DECEMBER 2014 corn futures contract.
IC. U.S. Corn SupplyDemand
U.S. Corn Acreage, Yield & Production
Following the results of June 30th USDA NASS Acreage report, the USDA projected that 2014 U.S. corn
total planted acreage would be 91.641 million acres (ma), down 50,000 acres from the March 31st USDA NASS
Prospective Plantings Report, and down from 95.365 ma in 2013, 97.155 ma in 2012, and 91.936 ma in 2011
(Table 1 and Figure 2). In addition, the USDA projected 2014 U.S. corn harvested acreage to be 83.839 ma,
down from its June 11 WASDE report projection of 84.3 ma, and down from 87.668 ma in 2013, and 87.365
ma in 2012, but up from 81.446 ma in 2011. The 2014 proportion of harvestedtoplanted acreage for all U.S.
corn is projected to be 91.49%, down from 91.9% in to 2013, but up from 89.9% in 2012 and 91.4% in 2011.
The projected 2014 U.S. average corn yield of 165.3 bushels per acre (bu/ac) is unchanged from the May
June WASDE reports, and would be a record high, up from 158.8 bu/ac in 2013, the drought affected 2012 low
yield of 123.4 bu/ac., and the historic high of 164.7 bu/ac in 2009 (Table 1 and Figure 3). Based on these 2014
acreage and yield forecasts, the USDA projected 2014 U.S. corn production to be 13.860 billion bushels (bb) –
which would be the second highest amount on record, following the record high of 13.925 bb in 2013, 10.780
bb in 2012, 12.360 bb in 2011, 12.447 in 2010, and 13.092 bb in 2009 (Table 1).
U.S. Corn Total Supplies
The USDA estimates that total supplies of U.S. corn for “new crop” MY 2014/15 are 15.136 bb – resulting
from beginning stocks of 1.246 bb, projected 2014 production of 13.860 bb, and projected imports of 30
million bushel (mb) (Table 1). Total supplies of 15.136 bb in “new crop” MY 2014/15 would be a record high,
comparable to 14.362 bb in MY 2007/08, 13.729 bb in MY 2008/09, 14.774 bb in MY 2009/10 (3rd largest),
14.182 bb in MY 2010/11 (4th largest), 13.517 bb in MY 2011/12, 11.932 bb in MY 2012/13, and 14.781 bb in
“current year” MY 2013/14 (2nd highest).
Beginning stocks of 1.246 bb in “new crop” MY 2014/15 are up 100 mb from the June WASDE report, and
up sharply from both 821 mb in “current year” MY 2013/14, and from 989 mb in MY 2012/13. This amount of
beginning stocks is up considerably from the low of 426 mb occurring in MY 1996/97. Imports of 30 mb in
“new crop” MY 2014/15 are the third highest on record, and are projected to be down from 35 mb in “current
year” MY 2013/14 (the 2nd highest), and also down sharply from the record high of 162 mb in MY 2012/13.
These amounts of U.S. corn imports are comparable to 29 mb in MY 2011/12, and 28 mb in MY 2010/11.
U.S. Corn Use by Category & Total Use
U.S. Ethanol Production and Corn Usage: Projected U.S. corn use for ethanol production of 5.050 bb in

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WASDE report), while being up from 4.648 bb in MY 2012/13, and 5.000 bb in MY 2011/12 (Figure 4). Figure 5
shows weekly U.S. oxygenated plant production of fuel ethanol as reported by the U.S. Energy Information
Administration (www.eia.gov) with a calculated estimate of corn use developed by Kansas State University.
Assuming 2.75 gallons of ethanol produced per bushel of corn, these calculations indicate that the equivalent
projected annual rate of U.S. corn used for ethanol production for “current” MY 2013/14 has ranged from
4.6385.418 bb on a weekly basis since early September 2013 the beginning of the “current” 2013/14
marketing year.
Over the period of from September 1, 2013 through July 4, 2014, corn usage for ethanol production has

through the end of the current marketing year yet to occur. This estimate of 5.050 bb is less than the USDA’s
July 2014 WASDE report estimate of 5.075 bb of corn to be used for ethanol production during “current” MY
2013/14 (which had been raised 25 mb in the July WASDE report).
U.S. Corn Use as Distillers Grains: An estimate of the U.S. corn equivalent amounts of distillers grains
(DDGS) use for direct livestock feeding and exports is provided in Figure 6 – which shows estimated a) DDGS
corn equivalent U.S. domestic livestock feeding, and b) DDGS exports as well as other categories of U.S. corn
usage since MY 1989/90.
This analysis assumes 16.00 pounds of distillers dried grains and solubles (DDGS) per 56 pound bushel of
corn used in ethanol production – following from recent ethanol industry surveys. By these estimates since
MY 2010/11, approximately 1.0511.147 bb of U.S. corn equivalent bushelweights of DDGS are projected
either to have already been or are to be fed to U.S. livestock during each marketing year– i.e., 1.108 bb in
DDGS cornweight equivalents in MY 2010/11, 1.130 bb in MY 2011/12, 1.051 bb in MY 2012/13, 1.147 bb
projected for “current” MY 2013/14, and 1.142 bb in “new crop” MY 2014/15. Over the same five most recent
marketing years, DDGS exports in corn equivalent weights are estimated to range from 277 to 306 mb, with
approximately 301 bb of DDGScorn equivalents projected for the “new crop” MY 2014/15 U.S. corn marketing
year.
U.S. Corn Exports: Projected U.S. corn exports of 1.700 in “new crop” MY 2014/15 are down from the
estimate of 1.900 bb in “current year” MY 2013/14, but up sharply from 731 mb in MY 2012/13 – the 40 year
low since MY 1975/76 (Figure 4). According the USDA Foreign Agricultural Service (FAS) weekly export data,
ss of July 3rd, with 44 of 52 weeks (84.6%) of “current” MY 2013/14 complete, 1.542 bb of U.S. corn had been
shipped for export – equal to 81.2% of the USDA’s updated projection for “current” MY 2013/14 of 1.900 bb.
An additional 330 mb of U.S. corn had been sold for future export sales in the “current” 2013/14 marketing
year – prior to August 31, 2014 (the end of “current” MY 2013/14).
Adding together 1.542 bb in past shipments plus 330 mb in forward sales amounts to 1.872 bb, or 98.6% of
the USDA’s 1.900 bb U.S. corn export target for “current” MY 2013/14 in the July 11th USDA WASDE report
with 84.6% (44/52 weeks) of the marketing year completed. The strong pace of combined shipments and
sales motivated the USDA to increase its U.S. corn export projection by 150 mb from 1.750 bb to 1.900 bb back
in the May 9th WASDE report.
In addition, 168 mb of U.S. corn export sales have been reported for the “new crop” 2014/15 marketing
year – beginning September 1, 2014. This amount would equal 9.9% of the USDA’s projection of 1.700 bb for

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NonEthanol FSI: Forecast nonethanol food, seed and industrial (FSI) use of 1.385 bb in “new crop” MY
2014/15 is equal to 1.385 bb in “current year” MY 2013/14, and compares to 1.405 bb in “last year’s” MY
2012/13, and 1.428 bb in MY 2011/12 (Figure 4).
Feed and Residual Use: Forecast U.S. feed and residual use of 5.200 bb in “new crop” MY 2014/15 is down
50 mb from the June WASDE report, while being up from 5.175 bb for “current” MY 2013/14 and up from
4.326 bb in MY 2012/13. The estimate for “current” MY 2013/14 was lowered 125 mb from the June WASDE
number. These levels of corn use for livestock feeding are somewhat correlated with the amounts of energy
feeds per grain consuming animal units reported by the USDA over the same time period (Figure 4).
Last month’s June Feed Outlook Report (http://www.ers.usda.gov/publications/fdsfeedoutlook/fds
14e.aspx) the USDA Economic Research Service (ERS) indicates that over the MY 2012/13 through “new crop”
MY 2014/15 time period, the total amount of Energy Feeds in the U.S. – including corn, sorghum, barley, oats
and wheat – was estimated to be 125.7 million metric tons (mmt) in MY 2012/13 (87.5% corn), 141.4 mmt in
“current” MY 2013/14 (95.2% corn), and 142.5 mmt in “new crop” MY 2014/15 (93.6% corn). Over this same
three year period, total U.S. Grain Consuming Animal Units were estimated to be 91.8 million in MY 2012/13,
89.7 million in “current” MY 2013/14, and 90.1 million in “new crop” MY 2014/15.
As a result, U.S. Energy Feeds per Grain Consuming Animal Unit was 1.369 metric tons per animal unit
(mt/au) in MY 2012/13, and is estimated to be 1.576 mt/au in “current” MY 2013/14, and 1.582 mt/au in “new
crop” MY 2014/15. As the availability of feed grain and other energy feeds has increased or is expected to
increase from the drought stricken “short crop” year of MY 2012/13 to “current” MY 2013/14, and into “new
crop” MY 2014/15, the amount of energy feeds fed per animal unit and total feed use of U.S. corn has and is
expected to also increase.
Total Use of U.S. Corn for “new crop” MY 2014/15 is projected to be 13.335 bb – down 50 mb from June.
This amount of 13.335 bb in total use for “new crop” MY 2014/15 is down from the record high of 13.535 bb in
“current” MY 2013/14 (also down 100 mb from the June WASDE), but up from 11.111 bb in drought affected
MY 2012/13 (Table 1 and Figures 4 & 6). United States’ total corn use has varied based on available U.S. corn
supplies in recent years, trending from 12.737 bb in MY 2007/08, 12.056 bb in MY 2008/09, 13.066 bb in MY
2009/10 (3rd highest), 13.055 bb in MY 2010/11 (4th
highest), 12.528 bb in MY 2011/12, 11.111 bb in MY
2012/13, the record high of 13.535 bb in “current” MY 2013/14, and the projected amount of 13.335 bb in
“new crop” MY 2014/15 (2nd highest).
U.S. Corn Ending Stocks, % Ending StockstoUse, & Prices
U.S. corn ending stocks for “new crop” MY 2014/15 are projected to be 1.801 bb – up 75 mb from the June
WASDE. This forecast amount of U.S. corn ending stocks of 1.801 bb in “new crop” MY 2014/15 up from 1.246
bb in “current year” MY 2013/14 – which was raised 100 mb from the June WASDE report (Table 1 & Figure
4). “Current” MY 2013/14 U.S. corn ending stocks of 1.246 bb are less than 1.673 bb of U.S. corn ending stocks
for MY 2008/09, and 1.708 bb in MY 2009/10 – but at least marginally larger than the recent downtrending
ending stocks figures of 1.128 bb in MY 2010/11, 989 mb in MY 2011/12, and 821 mb in “drought stricken” MY
2012/13.
Projected percent (%) ending stockstouse of 13.5% in “new crop” MY 2014/15 are up from 12.9% in the
June WASDE report (Table 1 & Figures 78). United States’ corn % ending stockstouse declined from 13.9%

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stricken” MY 2012/13, before increasing for the first time in six (6) years to 9.2% in “current” MY 2013/14 (up
from 8.4% in the June WASDE), and now to a projected level of 13.5% in “new crop” MY 2014/15.
U.S. average corn prices for “new crop” MY 2014/15 are projected to be in the range of $3.65$4.35 bu/ac
(midpoint = $4.00) (Table 1 & Figures 78) – down from $3.85$4.55 (midpoint = $4.20) in the June WASDE
report. Since the beginning of the rapid expansion in U.S. ethanol production in 2006, U.S. corn prices have
moved higher, then lower, and higher again, changing from $3.04 /bu in MY 2006/07, to $4.20 in MY 2007/08,
$4.06 in MY 2008/09, $3.55 in MY 2009/10, $5.18 in MY 2010/11, $6.22 in MY 2011/12, and then up to the
record high of $6.89 in “drought stricken” MY 2012/13. But if the July 11th WASDE report projection holds
true, prices will now have declined for two consecutive years since the $6.89 record high in MY 2012/13, down
to $4.35$4.55 (midpoint = $4.45) in “current” MY 2013/14, and again down to $3.65$4.35 (midpoint = $4.00)
in “new crop” MY 2014/15. The USDA’s price projection for “current” MY 2013/14 is down from $4.45$4.65
(midpoint = $4.55) in the June 2014 WASDE report.
ID. KSU U.S. Corn SupplyDemand Scenarios for “New Crop” MY 2014/15
There seems to be a tendency for early season forecasts by both the USDA and University grain market
economists to project full production scenarios. Looking back, a combination of drought, excessive moisture,
and resulting poor crop development conditions lead to lower than originally expected U.S. corn production in
2010, 2011, and 2012. And although the 2013 U.S. corn crop has ended up being record large, still it is
markedly lower than original early 2013 production forecast of 14.5+ bb.
Projections for 2014 U.S. corn production by the USDA and Kansas State University may very well follow
this same pattern of being overly optimistic – implicitly discounting the possibility of 2014 U.S. corn crop
production problems occurring later in the summer months. For example, KSU forecasts provided here are
decidedly conservative in terms of projected U.S. corn prices, with a 50% probability of U.S. corn prices
averaging near $4.35 per bushel for “new crop” MY 2014/15, and an additional 35% probability of prices
averaging near $4.10 per bushel. In reality these two scenarios are close enough together that it could be said
that these KSU projections indicate there is an 85% chance of U.S. corn prices averaging $4.10$4.35 per
bushel.
Given the market information available in July 2014, these conservative price projections still seem
reasonable. However, 2014 production uncertainty and the possibility of overly pessimistic projections of U.S.
corn usage in the “new crop” 2014/15 marketing year may still very well lead to higher prices than these
projections – even though the current prevailing market sentiment is for extremely low U.S. corn prices at
harvest this fall.
KSU Probability Based Projections U.S. Corn Supply Demand & Prices for MY 2014/15
Kansas State University forecasts of U.S. corn supplydemand balances for “new crop” in the 2014/15
marketing year are provided below. The KSU projections are an effort to reflect the uncertainty that exists in
regards to the amount of 2014 U.S. corn production. The size of the 2014 U.S. corn crop will be determined by
2014 U.S. corn planted and harvested acres on the one hand, and on 2014 U.S. corn yields on the other. These
KSU 2014 U.S. corn planted and harvested acreage projections follow from the June 30th USDA NASS Acreage
report and the July 11th USDA WASDE report.

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weighted KSU forecasts of U.S. corn average prices for “new crop” MY 2014/15 are based on projections of
U.S. corn % ending stockstouse shown in Table 1 and Figure 7. Three probabilityweighted KSU supply
demand and price scenarios for “new year’s” U.S. corn crop” MY 2014/15 follow below.
It should be noted that the key market determining factor to focus on in regards to production – supply
prospects is the projected size of the 2014 U.S. corn crop and the projected probability attached to it. In these
projections the low acreage and low yield scenarios were deliberately placed together in scenario #3 to
represent the “low 2014 U.S. corn production” scenario. Similarly, the high planted acreage and high yield
scenarios are deliberately placed together to represent the “high 2014 production” outcome in scenario #2. It
is possible – and indeed likely – that if at the end of the 2014 U.S. corn growing season the size of the U.S. corn
crop could be nearly equal to either the high production or low production outcomes of scenarios #2 or #3,
but for different specific acreage and/or yield outcomes than either of these scenarios are constructed on.
#1: “Likely Production” Scenario”: Production = 13.364 bb, 9.99% S/U, $4.35/bu – 50% Probability
It is estimated here that there is a “5 out of 10” or 50% chance of final 2014 final U.S. corn production
being approximately 13.364 billion bushels (bb). In this KSU forecast, the following assumptions are used to
derive that projection. First, it is assumed that 2014 U.S. corn planted and harvested acreage are equal to the
USDA’s projection of 91.641 million acres (ma) and 83.839 ma, respectively, assuming U.S. corn % harvested
toplanted acreage of 91.49% (Table 1). Then, a simple 19732013 trend line yield forecast of 159.4 bu/ac is
used, leading to a forecast of 2014 U.S. corn production of 13.364 bb.
Total U.S. corn supplies are projected to be 14.640 bb, U.S. total corn usage at 13.310 bb, ending stocks of
1.330 bb, and % ending stockstouse near 9.99% for “new crop” MY 2014/15. U.S. corn average prices would
be in the range of $3.85$4.850 per bushel (midpoint = $4.35) for “new crop” MY 2014/15 (Table 1 and Figure
7).
#2: “Higher Production” Scenario”: Production = 13.971 bb, 12.16% S/U, $4.10/bu – 35% Probability
It is estimated here that there is a “3.5 out of 10” or 35% chance of final 2014 final U.S. corn production
being approximately 13.971 bb. In this KSU forecast, the following assumptions are used to derive that
projection. First, it is assumed that 2014 U.S. corn planted acreage is 92.891 ma, which is 1.250 ma more than
the USDA projection of 91.641 ma, and marginally less than the upper end of the USDA’s 90% forecast error
range at 93.016 ma (i.e., 101.5% x 91.641 ma) as reported in the June 30th USDA Acreage report. U.S. corn
harvested acreage in 2014 is forecast to be 84.493 ma, assuming U.S. corn % harvestedtoplanted acreage of
91.49% as in the July 11th USDA WASDE forecasts (Table 1). Projected 2014 U.S. corn yield in this scenario is
164.4 bu/ac, which is 5 bu/ac more than the a simple 19732013 trend line yield forecast of 159.4 bu/ac that is
used in the KSU “likely scenario”, but still less than the USDA’s initial 2014 yield projection of 165.3 bu/ac.
Given these “large crop” assumptions, 2014 U.S. corn production is forecast to be 13.971 bb.
1.652 bb, and % ending stockstouse near 12.16% for “new crop” MY 2014/15. U.S. corn average prices would
7).
#3: “Lower Production” Scenario”: Production = 12.355 bb, 8.99% S/U, $4.90/bu – 15% Probability
It is estimated here that there is a “1.5 out of 10” or 15% chance of final 2014 final U.S. corn production
being approximately 12.355 bb. The following assumptions are used to derive that projection. First, it is

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91.641 ma, and marginallly larger than the lower end of the USDA’s 90% forecast error range at 90.266 ma
(i.e., 98.5% of 91.641 ma) as reported in the June 30th USDA Acreage report (Table 1). Projected 2014 U.S.
corn yield in this scenario is projected to be 149.4 bu/ac, which is 10 bu/ac less than the a simple 19732013
trend line yield forecast of 159.4 bu/ac that is used in the “likely scenario”, but still 26 bu/ac or 21% larger than
the USDA’s final yield in “drought stricken” MY 2012/13 of 123.4 bu/ac. Given these “small crop” assumptions,
2014 U.S. corn production is forecast to be 12.355 bb.
1,126 mb, and % ending stockstouse near 8.99% for “new crop” MY 2014/15. U.S. corn average prices would
7).
II. World Corn SupplyDemand Trends
The USDA forecast that “new crop” 2014/15 marketing year World corn production will be essentially
equal to “current year” MY 2013/14 production. World corn total supplies of 1,154 mmt in “new crop” MY
2014/15 are up 2.8% over 1,123 mmt in “current year” MY 2013/14, and up 15.0% over 1,003 mmt in MY
2012/13. Consequently, World corn total use is also projected to be 966 mmt in “new crop” MY 2014/15, up
1.8% over 949 mmt in “current year” MY 2013/14, and up 11.7% over 865 mmt MY 2012/13. World corn
ending stocks are also projected to continue to increase, with the USDA projecting ending stocks of 188.1 mmt
in “new crop” MY 2014/15, up 8.4% from 173.4 mmt in “current year” MY 2013/14, and up 36.1% from 138.2
mmt in MY 2012/13.
This situation is a result of the historically large 2013 South American feedgrain crop that was harvested in
the first half of the year – and that waas been followed by a record large 2013 U.S. corn crop harvested in the
fall months. These developments in 2013 led to growth in U.S. and World corn supplies, ending stocks, and %
ending stockstouse in “current” MY 2013/14. Projections of large and nearly unchanged U.S. and foreign
corn in “new crop” MY 2014/15 combined with larger World corn carryout from the end of “current” MY
2013/14 into the beginning of “new crop” MY 2014/15, have caused USDA projections of both total supplies
and ending stocks of World corn to grow in the last two marketing years over MY 2012/13 levels. Going
forward, the general market consensus is that the large 2014 world corn production is likely, with markedly
lower corn prices in late 2014 and on into 2015. That said, prospects for markedly higher U.S. corn prices
through springsummer 2014 will depend on whether any serious, damaging problems occur in 2014 U.S. corn
production.
IIA. World Corn Production by Country / Region
Projected World corn production of 981.1 mmt for “new crop” MY 2014/15 would be the second highest
on record, being down marginally from the record high of 984.5 mmt in “current” MY 2013/14; 868.8 mmt in
MY 2012/13; and the range of 796889 mmt during the MY 2007/08MY 2011/12 period (Table 2 & Figure 9).
Foreign (nonU.S.) corn production is projected to be 627.2 mmt in “new crop” MY 2014/15, down marginally
from 630.7 mmt in “current” MY 2013/14, and up 5.4% from 595.0 mmt in MY 2012/13.
Table 2 provides a projected list of the major corn producing countries or regions in the World in the “new
crop” 2014/15 marketing year. Production estimates are also provided for these major World corn producers

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2014/15 in the United States (up 0.25 to 353.7 mmt), Argentina (up 2.0 to 26.0 mmt), the European Union (up
0.68 to 65.3 mmt), and China (up 1.51 to 220.0 mmt), as well as Mexico (up 0.60 to 22.5 mmt) and Southeast
Asia (up 0.66 to 27.5 mmt). Yearoveryear decreases are projected in “new crop” MY 2014/15 in Brazil (down
4.0 to 74.0 mmt), South Africa (down 1.0 to 13.5 mmt), Egypt (down 0.05 to 5.75 mmt), Canada (down 1.7 to
12.5 mmt), and Ukraine (down 3.9 to 27.0 mmt).
The United States (354 mmt) is projected to be the largest producer of corn in “new crop” MY 2014/15,
followed by China (220 mmt), Brazil (74 mmt), Southeast Asia (27.5 mmt), Ukraine (27.0 mmt), Argentina (26.0
mmt), Mexico (22.5 mmt), South Africa (13.5 mmt), Canada (12.5 mmt), and Egypt (5.75 mmt).
IIB. World Corn Exports by Country / Region
Global corn exports in “new crop” MY 2014/15 are projected to be 115.2 mmt, down 7.6% from 125.0
mmt in “current” MY 2013/14, while being up 21.0% from 95.2 mmt in MY 2012/13 (Table 3). Foreign (non
U.S.) corn exports are projected to be 72.0 mmt in “new crop” MY 2014/15, down from 76.7 mmt in “current”
MY 2013/14, and down from 76.6 mmt in MY 2012/13.
Table 3 provides a projected list of the major corn exporting countries or regions in the World in the “new
crop” 2014/15 marketing year. Export estimates are also provided for these major World corn exporters for
“current” MY 2013/14 and MY 2012/13. Yearoveryear increases in corn exports in “new crop” MY 2014/15
are projected for Argentina, with decreases forecast for the United States, Brazil, South Africa, and the
Ukraine. However, decreased exports are projected for Argentina, South Africa, Southeast Asia, Canada, and
the Ukraine.
The United States (43.2 mmt) is the projected leader in World corn exports in “new crop” MY 2014/15,
followed by Brazil (20.0 mmt), Argentina and Ukraine (16.0 mmt), South Africa (2.2 mmt), the European Union
(2.0 mmt), and Canada (1.0 mmt).
IIC. World Corn Imports by Country / Region
Global corn imports in “new crop” MY 2014/15 are projected to be a 114.9 mmt, down 2.1% from 117.4
mmt in “current” MY 2013/14, and up 15.5% from 99.5 mmt in MY 2012/13 (Table 4). Foreign (nonU.S.) corn
imports are projected to be 114.1 mmt in “new crop” MY 2014/15, down from 116.5 mmt in “current” MY
2013/14, but up from 95.4 mmt in MY 2012/13.
Table 4 provides a projected list of the major corn importing countries or regions in the World in the “new
crop” 2014/15 marketing year, along with “current” MY 2013/14 and MY 2012/13. Yearoveryear increases in
corn imports in “new crop” MY 2014/15 are projected for Japan, Canada, and the Former Soviet Union Region
(12 countries). However, decreased imports are projected for the United States, Egypt, Mexico, Southeast
Asia, South Korea, and China.
Japan (16.0 mmt) is projected to be the largest World corn importer in “new crop” MY 2014/15, followed
by the European Union (13.0 mmt), Mexico (10.9 mmt), South Korea (9.5 mmt), Southeast Asia (9.2 mmt),
Egypt (6.5 mmt), China (3.0 mmt), Brazil (0.8 mmt), and Canada (0.5 mmt).
IID. World Corn Feed Use by Country / Region

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U.S.) corn domestic feed use is projected to be 461.8 mmt in “new crop” MY 2014/15, up 4.5% from 442.0
mmt in “current” MY 2013/14, and up 12.9% from 408.9 mmt in MY 2012/13.
Table 5 provides a projected list of the major countries or regions in the World in terms of corn domestic
feed use in the “new crop” 2014/15 marketing year, along with “current” MY 2013/14 and MY 2012/13. Year
overyear increases in corn feed use in “new crop” MY 2014/15 are projected the United States, Argentina,
Brazil, South Africa, Egypt, the European Union, Japan, Mexico, Southeast Asia, China, and the Ukraine, with a
decrease projected for Canada.
China (162.0 mmt) is projected to be the largest World user of corn for domestic feeding in “new crop” MY
2014/15, followed by the United States (132.1 mmt), the European Union (57.5 mmt), Brazil (47.5 mmt),
Southeast Asia (27.7 mmt), Mexico (16.0 mmt), Japan (11.5 mmt), Egypt (10.2 mmt), Ukraine (9.5 mmt), South
Korea (7.8 mmt), Canada (6.7 mmt), Argentina (6.0 mmt), and South Africa (5.3 mmt).
IIE. World Corn Food, Seed, & Industrial (FSI) Use by Country / Region
Global corn Food, Seed and Industrial (FSI) use in “new crop” MY 2014/15 is projected to be 372.7 mmt,
down 0.8% from 375.7 mmt in “current” MY 2013/14, and up 7.6% from 346.5 mmt in MY 2012/13 (Table 6).
Foreign (nonU.S.) corn FSI use is projected to be 209.0 mmt in “new crop” MY 2014/15, down 1.2% from
211.6 mmt in “current” MY 2013/14, but up 8.5% from 192.7 mmt in MY 2012/13.
Table 6 provides a projected list of the major countries or regions in the World in terms of corn FSI use in
the “new crop” 2014/15 marketing year, along with “current” MY 2013/14, and MY 2012/13. Yearoveryear
increases in corn FSI use in “new crop” MY 2014/15 are projected for Argentina, the European Union, Mexico,
Southeast Asia, Canada, and China, with decreases forecast for the United States and South Africa. “No
change” is forecast for Brazil, Egypt, Japan, South Korea, and Ukraine.
The United States (163.5 mmt) is projected to be the largest World user of corn for FSI use in “new crop”
MY 2014/15, followed by China (60.0 mmt), the European Union (19.0 mmt), Mexico (16.8 mmt), Brazil (9.0
mmt), Southeast Asia (8.2 mmt), South Africa (6.1 mmt), Canada (5.5 mmt), Japan (4.5 mmt), Argentina (3.0
mmt), South Korea (2.1 mmt), Egypt (2.0 mmt), and Ukraine (1.4 mmt).
IIF. World Corn Total Use by Country / Region
Projected World corn total use of 966.5 mmt in “new crop” MY 2014/15 is up 1.8% from 949.2 mmt for
“current” MY 2013/14; 865.2 mmt in MY 2012/13; and the range of 774868 mmt during the MY 2007/08MY
2011/12 period (Table 7 and Figure 9). Foreign (nonU.S.) corn total use is projected to be 670.8 mmt in “new
crop” MY 2014/15, up 2.6% from 653.7 mmt in “current” MY 2013/14, and up 11.5% from 601.6 mmt in MY
2012/13.
Table 7 provides a projected list of the major countries or regions in the World in terms of corn total use in
the “new crop” 2014/15 marketing year, along with “current” MY 2013/14 and MY 2012/13. Yearoveryear
increases in corn total use in “new crop” MY 2014/15 are projected for Argentina, Brazil, Egypt, the European
Union, Japan, Mexico, Southeast Asia, China, and the Ukraine, with a decrease projected for South Africa. No
change is expected for the United States, South Korea and Canada.
The United States (295.5 mmt) is projected to be the largest World user of corn in “new crop” MY 2014/15,

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mmt), Mexico (32.8 mmt), Japan (16.0 mmt), Canada (12.2 mmt) and Egypt (12.2 mmt), South Africa (11.4
mmt), Ukraine (10.9 mmt), South Korea (9.9 mmt), and Argentina (9.0 mmt).
IIG. World Corn Ending Stocks by Country / Region
Projected World corn ending stocks of 188.1 mmt for “new crop” MY 2014/15 is an increase of 14.6 mmt
(up 8.4%) from 173.42 mmt in “current” MY 2013/14 – and if attained would be the largest amount of World
corn ending stocks since at least MY 2007/08. Over the last seven years, World corn ending stocks have
equaled 132 mmt in MY 2007/08; 147 mmt in MY 2008/09; 147 mmt in MY 2009/10; 130 mmt in MY 2010/11;
135 mmt in MY 2011/12; 138 mmt in MY 2012/13; 173 mmt in “current year” MY 2013/14; and are projected
to be 188 mmt in “new crop” MY 2014/15. Foreign (nonU.S.) corn ending stocks is projected to be 142.3
mmt in “new crop” MY 2014/15, up marginally from 141.8 mmt in “current” MY 2013/14, and up 21.3% from
117.3 mmt in MY 2012/13.
Table 8 provides a projected list of the major countries or regions in the World terms of corn ending stocks
in the “new crop” 2014/15 marketing year, along with “current” MY 2013/14 and MY 2012/13. Yearoveryear
increases in corn ending stocks in “new crop” MY 2014/15 are projected for the United States, Argentina,
Egypt and Japan (small increases), Mexico, Southeast Asia, China, and Ukraine, while decreases are projected
for Brazil, South Africa (small decrease), the European Union, South Korea, and Canada.
China (80.4 mmt) is projected to be the largest World holder of corn ending stocks in “new crop” MY
2014/15, followed by the United States (45.8 mmt), Brazil (15.8 mmt), the European Union (6.1 mmt),
Argentina (4.5 mmt), Southeast Asia (3.8 mmt), South Africa (3.0 mmt), Mexico (2.6 mmt), Ukraine (2.4 mmt),
Egypt (2.2 mmt), Canada (1.4 mmt), South Korea (1.1 mmt), and Japan (0.5 mmt).
IIH. World Corn Ending StockstoUse by Country / Region
World corn % ending stockstouse are projected to be 19.5% in “new crop” MY 2014/15, up from 18.4% in
“current” MY 2013/14, 15.9% in MY 2012/13, 15.5% in MY 2011/12, and 15.2% in MY 2010/11, while being
equal to the top end of the range of 17.0%18.8% in the MY 2007/08 through MY 2009/10 period. Historically,
the minimum levels of World corn % ending stockstouse since the early1970s have occurred in MY 1972/73
(12.3%), MY 1973/74 (11.8% S/U), MY 2006/07 (15.3% S/U), and in the recent marketing years of MY 2010/11
(15.2% S/U), MY 2011/12 (15.5% S/U), and MY 2012/13 (15.9% S/U).
Restated, World corn ending stockstouse of 15.2% in MY 2010/11 are the lowest level since 11.8% in MY
1973/74 (Table 9). Foreign (nonU.S.) corn ending stockstouse is projected to be 19.2% in “new crop” MY
2014/15, down from 19.4% in “current” MY 2013/14, and up from 17.3% in MY 2012/13.
Table 9 provides a projected list of the major countries or regions in the World in terms of corn percent (%)
ending stockstouse in the “new crop” 2014/15 marketing year, along with “current” MY 2013/14 and MY
2012/13. Yearoveryear increases in corn % ending stockstouse in “new crop” MY 2014/15 are projected for
the United States, Argentina, Brazil, Egypt, Mexico, and Southeast Asia,. Decreased ending stockstouse are
projected for South Africa, the European Union, Japan, South Korea, Canada, China, the broader group of the
Former Soviet Union (12 countries), and Ukraine individually from within the FSU12.
China (36.2%) is projected to be the largest World holder of corn in terms of relative usage (i.e., percent

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(18.2%), Egypt (18.0%), the United States (13.5%), South Korea (11.3%), Southeast Asia (10.3%), Canada
(10.2%), Ukraine (8.9%), Mexico (7.8%) and the European Union (7.8%), and Japan (3.3%).
III. Relationship Between World Corn % Ending StockstoUse & U.S. Corn Prices
Similar to the relationship between U.S. corn ending stockstouse and U.S. average corn prices (see Figure
8), since MY 1973/74 a negative relationship has existed between U.S. corn season average cash prices and
World corn % ending stockstouse – but with an adjustment or “jump” after MY 2007/08 (Figure 10).
Larger World corn supplydemand balances relative to use (i.e., higher percent ending stockstouse) are
typically associated with lower U.S. and World corn prices, while smaller supplydemand balances are usually
associated with higher corn prices – all else being equal. As in Figure 8 earlier, U.S. corn prices in Figure 10 are
reported on a nominal basis (i.e., not adjusted for inflation).
Whereas the minimum U.S. corn percent stockstouse since MY 1973/74 was 5.0% in the historic tight
stocks year of MY 1995/96, the historic minimum in World corn percent stockstouse of 11.8% occurred in
MY 1973/74. Since 2007/08, World corn ending stockstouse have not fallen below 15.2% in MY 2010/11 and
15.5% in MY 2011/12 (15.5% S/U). Current projections are for World corn percent stockstouse to be 18.9%
in “new crop” MY 2014/15.
****************************

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Table 1. U.S. Corn SupplyDemand Balance Sheet: MY 2008/09 – “New Crop” MY 2014/15 (July 11, 2014 USDA WASDE & KSU Projections)
Item 2008/09 2009/10 2010/11 2011/12 2012/13 2013/14
USDA
2014/15
KSU
% Probability of Occurring 15% 50% 35%

Beginning Stocks 1,624 1,673 1,708 1,128 989 821 1,246 1,246 1,246 1,246

Ethanol for fuel Use 3,709 4,591 5,019 5,000 4,648 5,075 5,050 4,900 5,050 5,150
Nonethanol Food, Seed &
1,316 1,370 1,407 1,428 1,405 1,385 1,385 1,375 1,385 1,410
Exports 1,849 1,980 1,834 1,543 731 1,900 1,700 1,400 1,700 1,800
Feed & Residual Use 5,182 5,125 4,795 4,557 4,329 5,175 5,200 4,850 5,175 5,225

Ending Stocks 1,673 1,708 1,128 989 821 1,246 1,801 1,126 1,330 1,652
% Ending StockstoUse 13.88% 13.07% 8.64% 7.89% 7.38% 9.20% 13.50% 8.99% 9.99% 12.16%
U.S. Corn Average Farm
$4.55
($4.45)
$3.65
$4.35
($4.00)
$4.40
$5.40
($4.90)
$3.75
$4.75
($4.25)
$3.55
$4.55
($4.05)
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Figure 2. U.S. Corn Planted Acreage for 20002013 Plus 2014 USDA & KSU Projections
Figure 3. U.S. Corn Yield Trend for 19732013 Plus 2014 Projections
93.5 86.0 86.4 88.2
91.9 97.2 95.4 91.6 90.4 91.6 92.9
86.5 78.6 79.5 81.4 84.0 87.4 87.7 83.8 82.7 83.8 85.0
91.1% 90.8% 87.9%
90.3% 91.0% 91.9% 90.2% 92.5% 91.4% 92.0% 92.4% 91.4% 89.9% 91.9% 91.5%91.5%91.5%91.5%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
0
25
50
75
100
125
% H a r v e s t e d o r P l a n t e d A c r e s
M i l l i o n A c r e s
Year
160.3 164.7
U . S .
A v e r a g e C o r n Y i e l d p e r A c r e
Year
Yields USDA2014 KSU14 Low Prodn KSU14 Likely Prodn KSU14 High Prodn
19732013 U.S. Corn Yield Trend
Yield (bu/ac) = 83.81 bu + 1.80 bu/year
Trend Yield for 2014 = 159.4 bu/acre

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Figure 4. Trends in U.S. Corn Use & Ending Stocks since MY 2004/05 (July 11, 2014 USDA WASDE)
Figure 5. Weekly U.S. Oxygenate Plant Production of Fuel Ethanol & Estimated Corn Use
6.135 6.115
5.540 5.858
5.182 5.126
4.799 4.557
0.731
s h e
Feed+Residual Ethanol Use Exports Other FSI Use Ending Stocks
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
9.0
10.0
0
100
200
300
400
500
600
700
800
900
1000
R a t e o
f C o r n U s e ( B i l l i o n B u / m k t g y e a r )
E t h a n o
l P r o
d n ( M i l l i o n B a r r e l s / D a y )
Month / Week / Year
Rate of Ethanol Production (1,000 Barrels / day) Rate of Corn Use / Mktg Year (Billion Bu.)
2010/11 2011/12 2012/13

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Figure 6. U.S. Corn SupplyDemand with DDGS Adjustments (July 11, 2014 USDA WASDE)
Figure 7. U.S. Corn Ending Stocks vs U.S.&nbs

Grain-outlook 07-15-14 Corn

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