GRAIN OUTLOOK Agricultural Lender’s Conference 2006

GRAIN OUTLOOKGRAIN OUTLOOK

Agricultural Lender’s Conference Agricultural Lender’s Conference 20062006

Mike WoolvertonMike Woolverton

Kansas State UniversityKansas State [email protected]@agecon.ksu.edu

WHEATWHEAT

Wheat Estimates, USDA, Wheat Estimates, USDA, Oct. 2006Oct. 2006

YieldYield ProductionProduction

U.S.U.S. 38.338.31.812 bil.1.812 bil.

KansasKansas 32.032.0 300.8 mil. 300.8 mil.(40.0)(40.0) (380.0 mil.) (380.0 mil.)

PRODUCTION PROJECTIONS, PRODUCTION PROJECTIONS, U.S., 2006/07U.S., 2006/07

All Wheat – 1.812 bil. Bu. – down 14%All Wheat – 1.812 bil. Bu. – down 14%

Hard Winter – 682 mil. Bu. – down 27%Hard Winter – 682 mil. Bu. – down 27% Hard Spring – 432 mil. Bu. – down 7%Hard Spring – 432 mil. Bu. – down 7% Soft Red – 390 mil. Bu. – up 26%Soft Red – 390 mil. Bu. – up 26% White – 254 mil. Bu. – down 15%White – 254 mil. Bu. – down 15% Durum – 53 mil. Bu. - down 48%Durum – 53 mil. Bu. - down 48%

2006 - 2005 HRW Wheat Quality 2006 - 2005 HRW Wheat Quality 11

20062006 20052005

Test Weight lbs/bu Test Weight lbs/bu 60.7 60.7 60.0 60.0

Wheat Protein %Wheat Protein % 13.9 13.9 12.1 12.1

Flour YieldFlour Yield 71.0 71.0 69.0 69.0

Wet Gluten %Wet Gluten % 33.8 33.8 29.5 29.5

11 Kansas State University harvest survey of Wheat Sheds in Kansas, Kansas State University harvest survey of Wheat Sheds in Kansas, Oklahoma, and Texas, Summer 2006, preliminary results.Oklahoma, and Texas, Summer 2006, preliminary results.

PRODUCTION PROJECTIONS, PRODUCTION PROJECTIONS, MAJOR WHEAT EXPORTERS, MAJOR WHEAT EXPORTERS,

2006/07 2006/07 (MMT)(MMT)

2006/072006/07 2005/062005/06 EU-25EU-25 117.89 117.89 (-4%)(-4%) 122.59 122.59 United StatesUnited States 49.32 49.32 (-14%)(-14%) 57.28 57.28 CanadaCanada 26.3 26.3 (+1%)(+1%) 25.98 25.98 AustraliaAustralia 11.0 11.0 (-55%)(-55%) 24.5 24.5 ArgentinaArgentina 13.25 13.25 (+6%)(+6%) 12.5 12.5

Total World Prod.Total World Prod. 585.14 585.14 (-6%)(-6%) 621.86621.86

WORLD WHEAT CARRYOVER 2002 TO 2007 est. (MMT)

0

20

40

60

80

100

120

140

160

180

2002/03 2003/04 2004/05 2005/06 2006/07 est

YEAR

MM

T

Wheat Balance SheetWheat Balance Sheet04-05 04-05 05-06 05-06 06-0706-07

Plant A. (mil.)Plant A. (mil.) 59.7 59.7 57.2 57.2 57.3 57.3

Harvest A. (mil.)Harvest A. (mil.) 50.0 50.0 50.1 50.1 46.8 46.8

Bu./A. Bu./A. 43.2 43.2 42.0 42.0 38.7 38.7

ProductionProduction 2,158 2,158 2,105 2,105 1,8121,812

ImportsImports 71 71 82 82 105 105

Carryover Carryover 546 546 540 540 571 571

Total Supply Total Supply 2,775 2,775 2,727 2,727 2,4882,488

Utilization:Utilization:

Feed and ResidualFeed and Residual 201 201 200 200 145 145

FoodFood 895 895 915 915 920 920

Seed Seed 79 79 78 78 80 80

ExportsExports 1,060 1,060 1,009 1,009 925 925

Total UtilizationTotal Utilization 2,235 2,235 2,155 2,155 2,0702,070CarryoverCarryover 540 540 (24%)(24%) 571 571 (26%)(26%) 418 418

(20%)(20%)

U.S. Farm PriceU.S. Farm Price $3.40 $3.42 $4.10-$4.60 $3.40 $3.42 $4.10-$4.60

Current Market Influences - WheatCurrent Market Influences - Wheat

Australian Drought Australian Drought (-55%)(-55%)

Low Carryover Low Carryover U.S. HRW QualityU.S. HRW Quality Winter Wheat PlantingsWinter Wheat Plantings

CORNCORN

Corn Estimates, USDA, Corn Estimates, USDA, Oct. 2006Oct. 2006

YieldYield BushelsBushels

U.S.U.S. 153.5153.5 10.9 bil.10.9 bil.

KansasKansas 125.0125.0 394 mil.394 mil. (135.0)(135.0) (465.8 mil.)(465.8 mil.)

Corn Balance SheetCorn Balance Sheet04-05 04-05 05-06 05-06 06-0706-07



Bu./A. Bu./A. 160.4 160.4 147.9 147.9 153.5 153.5

Production 11,807Production 11,807 11,112 11,112 10,905 10,905


Beginning Carryover Beginning Carryover 958 958 2,114 2,114 1,971 1,971

Total Supply Total Supply 12,776 12,776 13,23713,237 12,886 12,886


Feed and ResidualFeed and Residual 6,162 6,141 6,162 6,141 6,100 6,100 Food, seed, industrialFood, seed, industrial 2,686 2,686 2,975 2,975 3,540 3,540 Ethanol Ethanol

for fuelfor fuel 1,323 1,323 (11%) (11%) 1,600 1,600 (14%)(14%) 2,150 2,150 (20%)(20%)

ExportsExports 1,814 1,814 2,150 2,150 2,250 2,250

Total UtilizationTotal Utilization 10,662 10,662 11,26611,266 11,890 11,890

Ending CarryoverEnding Carryover 2,114 2,114 (20%)(20%) 1,971 1,971 (17%)(17%) 996 996 (8%)(8%)


Current Market Influences - CornCurrent Market Influences - Corn

Wet Harvest Conditions in Wet Harvest Conditions in Southern and Eastern Corn Southern and Eastern Corn BeltBelt

Demand from ethanol Demand from ethanol producersproducers

Strong export demandStrong export demand Carryover stocksCarryover stocks

GRAIN SORGHUMGRAIN SORGHUM

Sorghum Estimates, USDA, Sorghum Estimates, USDA, Oct. 2006Oct. 2006


U.S.U.S. 56.656.6301.0 mil.301.0 mil.

KansasKansas 60.060.0138.0 mil.138.0 mil.(75.0)(75.0) (195.0 mil.) (195.0 mil.)

Sorghum Balance SheetSorghum Balance Sheet04-05 04-05 05-06 05-06 06-0706-07



Bu./A. Bu./A. 69.9 69.9 68.7 68.7 56.6 56.6

Production 454 Production 454 394 394 301 301


Beginning Carryover Beginning Carryover 34 34 57 57 65 65

Total Supply Total Supply 487 487 451 451 366 366


Feed and ResidualFeed and Residual 191 141 191 141 100 100

Food, seed, industrialFood, seed, industrial 55 55 50 50 55 55

ExportsExports 184 184 195 195 165 165

Total UtilizationTotal Utilization 430 430 386 386 320 320

Ending CarryoverEnding Carryover 57 57 (13%)(13%) 65 65 (17%)(17%) 46 46 (14%)(14%)


SOYBEANSSOYBEANS

Soybean Estimates, USDA, Soybean Estimates, USDA, Oct. 2006Oct. 2006


U.S.U.S. 42.842.83.189 bil.3.189 bil.

KansasKansas 31.031.093 mil.93 mil.(37.0)(37.0) (105.5 mil.)(105.5 mil.)

Soybean Balance SheetSoybean Balance Sheet04-05 04-05 05-06 05-06 06-0706-07

Plant A. (mil.)Plant A. (mil.) 75.2 75.2 72.0 72.0 75.6 75.6 Harvest A. (mil.)Harvest A. (mil.) 74.0 74.0 71.3 71.3 74.5 74.5Bu./A. Bu./A. 42.2 42.2 43.0 43.0 42.8 42.8ProductionProduction 3,124 3,124 3,063 3,063

3,1893,189 ImportsImports 6 6 4 4 4 4 Beginning Carryover Beginning Carryover 112 112 256 256 449 449

Total Supply Total Supply 3,242 3,242 3,323 3,323 3,6413,641

Utilization:Utilization: Crushings Crushings 1,696 1,696 1,739 1,739

1,7751,775 Seed Seed 88 88 93 91 93 91 ExportsExports 1,103 1,103 948 948 1,145 Residual 1,145 Residual

99 99 95 95 75 75 Total UtilizationTotal Utilization 2,986 2,986 2,874 2,874 3,086 3,086

Ending CarryoverEnding Carryover 256 256 (9%)(9%) 449 449 (16%)(16%) 555 555 (18%)(18%)

U.S. Farm PriceU.S. Farm Price $5.74 $5.74 5.66 $4.90-$5.90 5.66 $4.90-$5.90

Current Market Influences - Current Market Influences - SoybeansSoybeans

Higher than expected Higher than expected yields due to August rainsyields due to August rains

Large CarryoverLarge Carryover Bio-diesel potentialBio-diesel potential Brazilian plantingsBrazilian plantings

Production of Major Crops, Production of Major Crops, United States and Former Soviet Union, United States and Former Soviet Union, Percentage Change, 2001/02 to 2004/05Percentage Change, 2001/02 to 2004/05

U.S.U.S. F.S.U.F.S.U.

WheatWheat 11%11% 6% 6%

CornCorn 24%24%125%125%

SoybeansSoybeans 9% 9%117%117%

Source: USDA Agricultural Statistics, 2006Source: USDA Agricultural Statistics, 2006

Former Soviet Union, Production, Former Soviet Union, Production, 2004/05, KMT 2004/05, KMT

CountryCountry WheatWheat CornCorn SoybeansSoybeansRussiaRussia 45,300 3,450 45,300 3,450 .56 .56UkraineUkraine 17,500 8,800 17,500 8,800 .36 .36KazakhstanKazakhstan 9,950 - 9,950 - - - MoldovaMoldova - - 1,500 1,500 - -

For Comparison:For Comparison:United States 58,738 299,917 85,484United States 58,738 299,917 85,484

Source: USDA, Agricultural Statistics, 2006.Source: USDA, Agricultural Statistics, 2006.

GRAIN OUTLOOK Agricultural Lender’s Conference 2006

Documents

Transcript of GRAIN OUTLOOK Agricultural Lender’s Conference 2006