Crop Market Outlook: Where do we go from here?

2012-13 Crop Market Outlook: Where do we go from here? Frayne Olson, PhD Crop Economist/Marketing Specialist NDSU Extension Service ND Agricultural Experiment Station Dept. of Agribusiness & Applied Economics

Today's Topics Review September 12, 2012 WASDE Where are we now (Where have we been). Are prices high enough to ration use? What does this mean for 2013 acreage? What are your questions!!

Dec CBOT Corn DTN Prophet X 09-26-2012 am

Nov CBOT Soybean DTN Prophet X 09-26-2012 am

Sep MGEX Spring Wheat DTN Prophet X 07-24-122

Corn Update

Corn Supply & Demand Table U.S. Corn 2011/2012 (Est) 2012/2013 (Aug) 2012/2013 (Sep) Planted A. 91.9 Mill. A. 96.4 Mill. A. 96.4 Mill. A. Harvested A. 84.0 Mill. A. 87.4 Mill. A. 87.4 Mill. A. Yield/Harvest A. 147.2 bu. 123.4 bu. 122.8 bu. Begin Stocks 1,128 Mill. Bu. 1,021 Mill. Bu. 1,181 Mill. Bu. Production 12,358 Mill. Bu. 10,779 Mill. Bu. 10,727 Mill. Bu. Imports 25 Mill. Bu. 75 Mill. Bu. 75 Mill. Bu. Total Supply 13,511 Mill. Bu. 11,875 Mill. Bu. 11,983 Mill. Bu. Feed & Residual 4,400 Mill. Bu. 4,075 Mill. Bu. 4,150 Mill. Bu. Food, Seed, Ind. 6,390 Mill. Bu. 5,850 Mill. Bu. 5,850 Mill. Bu. Ethanol 5,000 Mill. Bu. 4,500 Mill. Bu. 4,500 Mill. Bu. Exports 1,540 Mill. Bu. 1,300 Mill. Bu. 1,250 Mill. Bu. Total Use 12,330 Mill. Bu. 11,225 Mill. Bu. 11,250 Mill. Bu. Ending Stocks 1,181 Mill. Bu. 650 Mill. Bu. 733 Mill. Bu. USDA WASDE Sept. 12, 2012

Corn Supply & Demand Table U.S. Corn 2011/2012 (Est) 2012/2013 (Aug) 2012/2013 (Sep) Core Issue!! Planted A. 91.9 Mill. A. 96.4 Mill. A. 96.4 Mill. A. Harvested A. 84.0 Mill. A. 87.4 Mill. A. 87.4 Mill. A. U.S. will not produce enough corn to meet needs. Yield/Harvest A. 147.2 bu. 123.4 bu. 122.8 bu. Begin Stocks 1,128 Mill. Bu. 1,021 Mill. Bu. 1,181 Mill. Bu. Production 12,358 Mill. Bu. 10,779 Mill. Bu. 10,727 Mill. Bu. Who will use less! Imports 25 Mill. Bu. 75 Mill. Bu. 75 Mill. Bu. Total Supply 13,511 Mill. Bu. 11,875 Mill. Bu. 11,983 Mill. Bu. Feed & Residual 4,400 Mill. Bu. 4,075 Mill. Bu. 4,150 Mill. Bu. Food, Seed, Ind. 6,390 Mill. Bu. 5,850 Mill. Bu. 5,850 Mill. Bu. Ethanol 5,000 Mill. Bu. 4,500 Mill. Bu. 4,500 Mill. Bu. Exports 1,540 Mill. Bu. 1,300 Mill. Bu. 1,250 Mill. Bu. Total Use 12,330 Mill. Bu. 11,225 Mill. Bu. 11,250 Mill. Bu. Ending Stocks 1,181 Mill. Bu. 650 Mill. Bu. 733 Mill. Bu. USDA WASDE Sept. 12, 2012

Corn Supply & Demand Table U.S. Corn 2011/2012 (Est) 2012/2013 (Aug) 2012/2013 (Sep) Planted A. 91.9 Mill. A. 96.4 Mill. A. 96.4 Mill. A. Harvested A. 84.0 Mill. A. 87.4 Mill. A. 87.4 Mill. A. Both Yield and Yield/Harvest A. 147.2 bu. 123.4 bu. Harvested Acres are still 122.8 bu. Begin Stocks being debated. 1,128 Mill. Bu. 1,021 Mill. Bu. 1,181 Mill. Bu. Production 12,358 Mill. Bu. 10,779 Mill. Bu. 10,727 Mill. Bu. Production is the real Imports 25 Mill. Bu. 75 Mill. Bu. 75 Mill. Bu. number to watch! Total Supply 13,511 Mill. Bu. 11,875 Mill. Bu. 11,983 Mill. Bu. Feed & Residual 4,400 Mill. Bu. 4,075 Mill. Bu. 4,150 Mill. Bu. Food, Seed, Ind. 6,390 Mill. Bu. 5,850 Mill. Bu. 5,850 Mill. Bu. Ethanol 5,000 Mill. Bu. 4,500 Mill. Bu. 4,500 Mill. Bu. Exports 1,540 Mill. Bu. 1,300 Mill. Bu. 1,250 Mill. Bu. Total Use 12,330 Mill. Bu. 11,225 Mill. Bu. 11,250 Mill. Bu. Ending Stocks 1,181 Mill. Bu. 650 Mill. Bu. 733 Mill. Bu. USDA WASDE Sept. 12, 2012

180 What is the U.S. trend line yield? 160 Bushels /Acre 140 120 100 Average Yield Trend Line 80 60 Sept. 12, 2012 WASDE Feed Grains Data Base Table 1

180 What is the U.S. trend line yield? 160 Bushels /Acre 140 120 100 Average Yield Trend Line 80 60 2012 122.8 bu./a. 37.2 bu. below trend line! Sept. 12, 2012 WASDE Feed Grains Data Base Table 1

180 What is the U.S. trend line yield? 160 Bushels /Acre 140 120 100 Average Yield Trend Line 80 60 1983 = -21.6 (-21%) 1988 = -28.0 (-25%) 1993 = -21.8 (-18%) 2012 = -37.2 (-23%) Sept. 12, 2012 WASDE Feed Grains Data Base Table 1

Have Production estimates stabilized? Who will use less corn?

Corn - Total Use (Billion Bushels) 7.00 6.00 Billion Bushels 5.00 4.00 3.00 2.00 1.00 Feed & Residual Ethanol Non-Ethanol Food, Seed & Industrial Exports 0.00 Sept. 12, 2012 WASDE Report & USDA Feed Grains Data Base Table 4

Corn Supply & Demand Table U.S. Corn 2011/2012 (Est) 2012/2013 (Aug) 2012/2013 (Sep) Planted A. 91.9 Mill. A. 96.4 Mill. A. 96.4 Mill. A. Harvested A. 84.0 Mill. A. 87.4 Mill. A. 87.4 Mill. A. Will ethanol use 10% less corn? Yield/Harvest A. 147.2 bu. 123.4 bu. 122.8 bu. Begin Stocks 1,128 Mill. Bu. 1,021 Mill. Bu. 1,181 Mill. Bu. Production 12,358 Mill. Bu. 10,779 Mill. Bu. 10,727 Mill. Bu. Imports 25 Mill. Bu. 75 Mill. Bu. 75 Mill. Bu. Total Supply 13,511 Mill. Bu. 11,875 Mill. Bu. 11,983 Mill. Bu. Feed & Residual 4,400 Mill. Bu. 4,075 Mill. Bu. 4,150 Mill. Bu. Food, Seed, Ind. 6,390 Mill. Bu. 5,850 Mill. Bu. 5,850 Mill. Bu. Ethanol 5,000 Mill. Bu. 4,500 Mill. Bu. 4,500 Mill. Bu. Exports 1,540 Mill. Bu. 1,300 Mill. Bu. 1,250 Mill. Bu. Total Use 12,330 Mill. Bu. 11,225 Mill. Bu. 11,250 Mill. Bu. Ending Stocks 1,181 Mill. Bu. 650 Mill. Bu. 733 Mill. Bu. USDA WASDE Sept. 12, 2012

1,000 950 900 850 800 750 700 Weekly Ethanol Production EIA August Short Term Energy Outlook & EIA Custom Query 1,000 Barrels/Day Jun 04, 2010 Jul 04, 2010 Aug 04, 2010 Sep 04, 2010 Oct 04, 2010 Nov 04, 2010 Dec 04, 2010 Jan 04, 2011 Feb 04, 2011 Mar 04, 2011 Apr 04, 2011 May 04, 2011 Jun 04, 2011 Jul 04, 2011 Aug 04, 2011 Sep 04, 2011 Oct 04, 2011 Nov 04, 2011 Dec 04, 2011 Jan 04, 2012 Feb 04, 2012 Mar 04, 2012 Apr 04, 2012 May 04, 2012 Jun 04, 2012 Jul 04, 2012 Aug 04, 2012 Sep 04, 2012 Oct 04, 2012 Nov 04, 2012 Dec 04, 2012 Weekly Production USDA Est. Corn Use

Corn Supply & Demand Table U.S. Corn 2011/2012 (Est) 2012/2013 (Aug) 2012/2013 (Sep) Planted A. 91.9 Mill. A. 96.4 Mill. A. 96.4 Mill. A. Harvested A. 84.0 Mill. A. 87.4 Mill. A. 87.4 Mill. A. Will corn exports drop by 19%? Yield/Harvest A. 147.2 bu. 123.4 bu. 122.8 bu. Begin Stocks 1,128 Mill. Bu. 1,021 Mill. Bu. 1,181 Mill. Bu. Production 12,358 Mill. Bu. 10,779 Mill. Bu. 10,727 Mill. Bu. Imports 25 Mill. Bu. 75 Mill. Bu. 75 Mill. Bu. Total Supply 13,511 Mill. Bu. 11,875 Mill. Bu. 11,983 Mill. Bu. Feed & Residual 4,400 Mill. Bu. 4,075 Mill. Bu. 4,150 Mill. Bu. Food, Seed, Ind. 6,390 Mill. Bu. 5,850 Mill. Bu. 5,850 Mill. Bu. Ethanol 5,000 Mill. Bu. 4,500 Mill. Bu. 4,500 Mill. Bu. Exports 1,540 Mill. Bu. 1,300 Mill. Bu. 1,250 Mill. Bu. Total Use 12,330 Mill. Bu. 11,225 Mill. Bu. 11,250 Mill. Bu. Ending Stocks 1,181 Mill. Bu. 650 Mill. Bu. 733 Mill. Bu. USDA WASDE Sept. 12, 2012

Summary of Corn Exports (Million Metric Ton) Country 2011/12 2010/11 2009/10 2008/09 2007/08 Japan 11.749 14.279 14.343 15.909 15.800 Mexico 9.538 7.019 7.999 7.454 8.739 China 5.174 0.977 1.157 0.00 0.00 South Korea 3.635 6.104 7.562 5.129 8.639 Venezuela 1.280 0.894 1.077 1.159 1.005 Taiwan 1.265 2.393 2.949 3.198 3.478 Egypt 0.544 3.302 2.935 2.233 3.309 ROW 4.730 10.297 10.323 10.132 18.998 Total 37.915 45.256 48.345 45.214 59.968 USDA FAS Marketing Year Ranking Report

World Corn Prod, Use & Stocks/Use (Million Metric Ton) 900.00 800.00 Stocks-to-Use Total Production Total Use 0.6000 0.5000 Million Metric Tons 700.00 600.00 500.00 400.00 0.4000 0.3000 0.2000 Stocks-to-Use Ratio 300.00 0.1000 Sept.12, 2012 USDA -WASDE & PSD Custom Query

Corn Supply & Demand Table Will feed use drop by 5.7%? U.S. Corn 2011/2012 (Est) 2012/2013 (Aug) 2012/2013 (Sep) Planted A. 91.9 Mill. A. 96.4 Mill. A. 96.4 Mill. A. This value will be the most difficult to track! Harvested A. 84.0 Mill. A. 87.4 Mill. A. 87.4 Mill. A. Yield/Harvest A. 147.2 bu. 123.4 bu. 122.8 bu. Quarterly Grain Stocks Begin Stocks 1,128 Mill. Bu. 1,021 Mill. Bu. 1,181 Mill. Bu. Production 12,358 Mill. Bu. 10,779 Mill. Bu. 10,727 Mill. Bu. Imports 25 Mill. Bu. 75 Mill. Bu. 75 Mill. Bu. Total Supply 13,511 Mill. Bu. 11,875 Mill. Bu. 11,983 Mill. Bu. Feed & Residual 4,400 Mill. Bu. 4,075 Mill. Bu. 4,150 Mill. Bu. Food, Seed, Ind. 6,390 Mill. Bu. 5,850 Mill. Bu. 5,850 Mill. Bu. Ethanol 5,000 Mill. Bu. 4,500 Mill. Bu. 4,500 Mill. Bu. Exports 1,540 Mill. Bu. 1,300 Mill. Bu. 1,250 Mill. Bu. Total Use 12,330 Mill. Bu. 11,225 Mill. Bu. 11,250 Mill. Bu. Ending Stocks 1,181 Mill. Bu. 650 Mill. Bu. 733 Mill. Bu. USDA WASDE Sept. 12, 2012

Corn Supply & Demand Table U.S. Corn 2011/2012 (Est) 2012/2013 (Aug) 2012/2013 (Sep) Planted A. 91.9 Mill. A. 96.4 Mill. A. 96.4 Mill. A. Projected 6.5% Stocks/Use Ratio Harvested A. 84.0 Mill. A. 87.4 Mill. A. 87.4 Mill. A. Yield/Harvest A. 147.2 bu. 123.4 bu. 122.8 bu. Begin Stocks 1,128 Mill. Bu. 1,021 Mill. Bu. 1,181 Mill. Bu. Lowest since 1995/96, which was record low percentage. Production 12,358 Mill. Bu. 10,779 Mill. Bu. 10,727 Mill. Bu. Imports 25 Mill. Bu. 75 Mill. Bu. 75 Mill. Bu. Total Supply 13,511 Mill. Bu. 11,875 Mill. Bu. 11,983 Mill. Bu. Feed & Residual 4,400 Mill. Bu. 4,075 Mill. Bu. 4,150 Mill. Bu. Food, Seed, Ind. 6,390 Mill. Bu. 5,850 Mill. Bu. 5,850 Mill. Bu. Ethanol 5,000 Mill. Bu. 4,500 Mill. Bu. 4,500 Mill. Bu. Exports 1,540 Mill. Bu. 1,300 Mill. Bu. 1,250 Mill. Bu. Total Use 12,330 Mill. Bu. 11,225 Mill. Bu. 11,250 Mill. Bu. Ending Stocks 1,181 Mill. Bu. 650 Mill. Bu. 733 Mill. Bu. USDA WASDE Sept. 12, 2012

Billion Bushels 14.00 13.00 12.00 11.00 10.00 9.00 8.00 7.00 6.00 5.00 4.00 Corn Total Production & Use (Billion Bushels) Stocks-to-Use Total Production Total Use 0.500 0.450 0.400 0.350 0.300 0.250 0.200 0.150 0.100 0.050 0.000 Stocks-to-Use Ratio Sept. 12, 2012 WASDE Report & USDA Feed Grains Data Base Table 4

Price vs. Stocks/Use Ratio 1993/94 to 2012/13 13.00 11.00 1993/94 to 2006/07 9.00 7.90 7.00 6.25 5.00 3.00 3.24 5.18 4.20 4.06 3.55 1.00 0.030 0.050 0.070 0.090 0.110 0.130 0.150 0.170 0.190 0.210 Historical Price Forecasted Price

Price vs. Stocks/Use Ratio 1993/94 to 2012/13 13.00 11.00 1995/96 9.00 7.90 7.00 6.25 5.00 3.00 3.24 5.18 4.20 4.06 3.55 1.00 0.030 0.050 0.070 0.090 0.110 0.130 0.150 0.170 0.190 0.210 Historical Price Forecasted Price

Price vs. Stocks/Use Ratio 1993/94 to 2012/13 13.00 11.00 9.00 7.00 5.00 3.00 7.90 5.18 6.25 4.20 4.06 3.55 2007/08 to 2012/13 1.00 0.030 0.050 0.070 0.090 0.110 0.130 0.150 0.170 0.190 0.210 Historical Price Forecasted Price

Soybean Update

Soybean Supply & Demand Table U.S. Soybean 2011/2012 (Est) 2012/2013 (Aug) 2012/2013 (Sep) Planted A. 75.0 Mill. A. 76.1 Mill. A. 76.1 Mill. A. Harvested A. 73.6 Mill. A. 74.6 Mill. A. 74.6 Mill. A. Yield/Harvest A. 41.5 bu. 36.1 bu. 35.3 bu. Begin Stocks 215 Mill. Bu. 145 Mill. Bu. 130 Mill. Bu. Production 3,056 Mill. Bu. 2,692 Mill. Bu. 2,634 Mill. Bu. Imports 16 Mill. Bu. 20 Mill. Bu. 20 Mill. Bu. Total Supply 3,287 Mill. Bu. 2,857 Mill. Bu. 2,785 Mill. Bu. Crushings 1,705 Mill. Bu. 1,515 Mill. Bu. 1,500 Mill. Bu. Exports 1,360 Mill. Bu. 1,110 Mill. Bu. 1,055 Mill. Bu. Seed 88 Mill. Bu. 89 Mill. Bu. 89 Mill. Bu. Residual 3 Mill. Bu. 27 Mill. Bu. 25 Mill. Bu. Total Use 3,157 Mill. Bu. 2,742 Mill. Bu. 2,670 Mill. Bu. Ending Stocks 130 Mill. Bu. 115 Mill. Bu. 115 Mill. Bu. USDA WASDE Sept. 12, 2012

Soybean Supply & Demand Table U.S. Soybean 2011/2012 (Est) 2012/2013 (Aug) 2012/2013 (Sep) Planted A. 75.0 Mill. A. 76.1 Mill. A. 76.1 Mill. A. Harvested A. Current focus 73.6 is on Mill. A. 74.6 Mill. A. 74.6 Mill. A. Yield/Harvest estimating A. Yield, 41.5 but bu. 36.1 bu. 35.3 bu. Begin Stocks Harvested Acres 215 could Mill. Bu. 145 Mill. Bu. 130 Mill. Bu. Production also be debated. 3,056 Mill. Bu. 2,692 Mill. Bu. 2,634 Mill. Bu. Production is the real number to watch! Imports 16 Mill. Bu. 20 Mill. Bu. 20 Mill. Bu. Total Supply 3,287 Mill. Bu. 2,857 Mill. Bu. 2,785 Mill. Bu. Crushings 1,705 Mill. Bu. 1,515 Mill. Bu. 1,500 Mill. Bu. Exports 1,360 Mill. Bu. 1,110 Mill. Bu. 1,055 Mill. Bu. Seed 88 Mill. Bu. 89 Mill. Bu. 89 Mill. Bu. Residual 3 Mill. Bu. 27 Mill. Bu. 25 Mill. Bu. Total Use 3,157 Mill. Bu. 2,742 Mill. Bu. 2,670 Mill. Bu. Ending Stocks 130 Mill. Bu. 115 Mill. Bu. 115 Mill. Bu. USDA WASDE Sept. 12, 2012

Soybean Supply & Demand Table U.S. Soybean 2011/2012 (Est) 2012/2013 (Aug) 2012/2013 (Sep) Planted A. 75.0 Mill. A. 76.1 Mill. A. 76.1 Mill. A. Harvested A. 73.6 Mill. A. 74.6 Mill. A. 74.6 Mill. A. Yield/Harvest A. 41.5 bu. 36.1 bu. 35.3 bu. Begin Stocks 215 Mill. Bu. 145 Mill. Bu. 130 Mill. Bu. Production 3,056 Mill. Bu. 2,692 Mill. Bu. 2,634 Mill. Bu. Imports 16 Mill. Bu. 20 Mill. Bu. 20 Mill. Bu. Total Supply 3,287 Mill. Bu. 2,857 Mill. Bu. 2,785 Mill. Bu. Crushings 1,705 Mill. Bu. 1,515 Mill. Bu. 1,500 Mill. Bu. 13.8% reduction from 2011/12 Exports 1,360 Mill. Bu. 1,110 Mill. Bu. 1,055 Mill. Bu. Seed 88 Mill. Bu. 89 Mill. Bu. 89 Mill. Bu. 11.3 % reduction for corn Residual 3 Mill. Bu. 27 Mill. Bu. 25 Mill. Bu. Total Use 3,157 Mill. Bu. 2,742 Mill. Bu. 2,670 Mill. Bu. Ending Stocks 130 Mill. Bu. 115 Mill. Bu. 115 Mill. Bu. USDA WASDE Sept. 12, 2012

50.0 What is the U.S. trend line yield? 45.0 Bushels /Acre 40.0 35.0 30.0 Average Yield Trend Line 25.0 20.0 Sept. 12, 2012 WASDE Oil Crops Data Base Table 1

50.0 What is the U.S. trend line yield? 45.0 Bushels /Acre 40.0 35.0 30.0 Average Yield Trend Line 25.0 20.0 2012 35.3 bu./a. 8.7 bu. below trend line Sept. 12, 2012 WASDE Oil Crops Data Base Table 1

50.0 What is the U.S. trend line yield? 45.0 Bushels /Acre 40.0 35.0 30.0 25.0 20.0 Average Yield Trend Line 1983 = -4.2 (-7%) 1988 = -5.8 (-18%) 1993 = -6.0 (-17%) 2012 = -8.7 (-20%) Sept. 12, 2012 WASDE Oil Crops Data Base Table 1

Billion Bushels 3.50 3.30 3.10 2.90 2.70 2.50 2.30 2.10 1.90 1.70 1.50 Soybean Total Prod. & Use (Billion Bushels) Stocks-to-Use Total Production Total Use 0.500 0.450 0.400 0.350 0.300 0.250 0.200 0.150 0.100 0.050 0.000 Stocks-to-Use Ratio Sept. 12, 2012 WASDE Report & Oil Yearbook Table 3

U.S. Soybean Use 2,000 1,800 1,600 Million Bushels 1,400 1,200 1,000 800 600 Crushings Exports Seed & Residual 400 200 0 Sept. 12, 2012 WASDE Report & Oil Yearbook Table 3

Soybean Supply & Demand Table Projected 12% reduction in Crushings U.S. Soybean 2011/2012 (Est) 2012/2013 (Aug) 2012/2013 (Sep) Planted A. 75.0 Mill. A. 76.1 Mill. A. 76.1 Mill. A. Oil demand should remain strong, but exports and meal (feed) will suffer. Harvested A. 73.6 Mill. A. 74.6 Mill. A. 74.6 Mill. A. Yield/Harvest A. 41.5 bu. 36.1 bu. 35.3 bu. Begin Stocks 215 Mill. Bu. 145 Mill. Bu. 130 Mill. Bu. Production 3,056 Mill. Bu. 2,692 Mill. Bu. 2,634 Mill. Bu. Imports 16 Mill. Bu. 20 Mill. Bu. 20 Mill. Bu. Total Supply 3,287 Mill. Bu. 2,857 Mill. Bu. 2,785 Mill. Bu. Crushings 1,705 Mill. Bu. 1,515 Mill. Bu. 1,500 Mill. Bu. Exports 1,360 Mill. Bu. 1,110 Mill. Bu. 1,055 Mill. Bu. Seed 88 Mill. Bu. 89 Mill. Bu. 89 Mill. Bu. Residual 3 Mill. Bu. 27 Mill. Bu. 25 Mill. Bu. Total Use 3,157 Mill. Bu. 2,742 Mill. Bu. 2,670 Mill. Bu. Ending Stocks 130 Mill. Bu. 115 Mill. Bu. 115 Mill. Bu. USDA WASDE Sept. 12, 2012

Soybean Supply & Demand Table U.S. Soybean 2011/2012 (Est) 2012/2013 (Aug) 2012/2013 (Sep) Projected 22% reduction in Exports. Planted A. 75.0 Mill. A. 76.1 Mill. A. 76.1 Mill. A. Harvested A. 73.6 Mill. A. 74.6 Mill. A. 74.6 Mill. A. Lowest export level since 2005/06 Yield/Harvest A. 41.5 bu. 36.1 bu. 35.3 bu. Begin Stocks 215 Mill. Bu. 145 Mill. Bu. 130 Mill. Bu. Production 3,056 Mill. Bu. 2,692 Mill. Bu. 2,634 Mill. Bu. Imports 16 Mill. Bu. 20 Mill. Bu. 20 Mill. Bu. Total Supply 3,287 Mill. Bu. 2,857 Mill. Bu. 2,785 Mill. Bu. Crushings 1,705 Mill. Bu. 1,515 Mill. Bu. 1,500 Mill. Bu. Exports 1,360 Mill. Bu. 1,110 Mill. Bu. 1,055 Mill. Bu. Seed 88 Mill. Bu. 89 Mill. Bu. 89 Mill. Bu. Residual 3 Mill. Bu. 27 Mill. Bu. 25 Mill. Bu. Total Use 3,157 Mill. Bu. 2,742 Mill. Bu. 2,670 Mill. Bu. Ending Stocks 130 Mill. Bu. 115 Mill. Bu. 115 Mill. Bu. USDA WASDE Sept. 12, 2012

Soybean Supply & Demand Table Key issues: U.S. Soybean 2011/2012 (Est) 2012/2013 (Aug) 2012/2013 (Sep) Planted A. 75.0 Mill. A. 76.1 Mill. A. 76.1 Mill. A. China s economic growth and demand. Harvested A. 73.6 Mill. A. 74.6 Mill. A. 74.6 Mill. A. Yield/Harvest A. 41.5 bu. 36.1 bu. 35.3 bu. South American weather! Begin Stocks 215 Mill. Bu. 145 Mill. Bu. 130 Mill. Bu. Production 3,056 Mill. Bu. 2,692 Mill. Bu. 2,634 Mill. Bu. Imports 16 Mill. Bu. 20 Mill. Bu. 20 Mill. Bu. Total Supply 3,287 Mill. Bu. 2,857 Mill. Bu. 2,785 Mill. Bu. Crushings 1,705 Mill. Bu. 1,515 Mill. Bu. 1,500 Mill. Bu. Exports 1,360 Mill. Bu. 1,110 Mill. Bu. 1,055 Mill. Bu. Seed 88 Mill. Bu. 89 Mill. Bu. 89 Mill. Bu. Residual 3 Mill. Bu. 27 Mill. Bu. 25 Mill. Bu. Total Use 3,157 Mill. Bu. 2,742 Mill. Bu. 2,670 Mill. Bu. Ending Stocks 130 Mill. Bu. 115 Mill. Bu. 115 Mill. Bu. USDA WASDE Sept. 12, 2012

Top Five S.B. Export Destinations 30.00 25.00 Million Metric Ton 20.00 15.00 10.00 5.00 China Mexico Japan Taiwan Indonesia 0.00 USDA FAS Export Sales Custom Query

World Soybean Prod, Use & Stocks/Use (Million Metric Ton) 300.00 250.00 Stocks-to-Use Total Production Total Use 0.7000 0.6000 Million Metric Tons 200.00 150.00 100.00 50.00 0.5000 0.4000 0.3000 0.2000 0.1000 Stocks-to-Use Ratio 0.00 0.0000 Sept. 12, 2012 USDA -WASDE & PSD Custom Query

Historical Soybean Production (Million Metric Ton) Million Metric Ton 100 90 80 70 60 50 40 30 20 10 0 United States Brazil Argentina February 9, 2012 WASDE Report & PSD Tables 21,22, and 23

Wheat Update

All Wheat Supply & Demand Table U.S. All Wheat 2011/2012 (Est.) 2012/2013 (Aug) 2012/2013 (Sep) Planted A. 54.4 Mill. A. 56.0 Mill. A. 56.0 Mill. A. Harvested A. 45.7 Mill. A. 48.8 Mill. A. 48.8 Mill. A. Yield/Harvest A. 43.7 bu. 46.5 bu. 46.5 bu. Begin Stocks 862 Mill. Bu. 743 Mill. Bu. 743 Mill. Bu. Production 1,999 Mill. Bu. 2,268 Mill. Bu. 2,268 Mill. Bu. Imports 112 Mill. Bu. 130 Mill. Bu. 130 Mill. Bu. Total Supply 2,974 Mill. Bu. 3,141 Mill. Bu. 3,141 Mill. Bu. Food 941 Mill. Bu. 950 Mill. Bu. 950 Mill. Bu. Seed 77 Mill. Bu. 73 Mill. Bu. 73 Mill. Bu. Feed & Residual 163 Mill. Bu. 220 Mill. Bu. 220 Mill. Bu. Exports 1,050 Mill. Bu. 1,200 Mill. Bu. 1,200 Mill. Bu. Total Use 2,231 Mill. Bu. 2,443 Mill. Bu. 2,443 Mill. Bu. Ending Stocks 743 Mill. Bu. 698 Mill. Bu. 698 Mill. Bu. USDA WASDA September 12, 2012

All Wheat Supply & Demand Table U.S. All Wheat 2011/2012 (Est.) 2012/2013 (Aug) 2012/2013 (Sep) Planted A. 54.4 Mill. A. 56.0 Mill. A. 56.0 Mill. A. Harvested A. 45.7 Mill. A. 48.8 Mill. A. 48.8 Mill. A. Yield/Harvest A. 43.7 bu. 46.5 bu. 46.5 bu. Begin Stocks 862 Mill. Bu. 743 Mill. Bu. 743 Mill. Bu. Production 1,999 Mill. Bu. 2,268 Mill. Bu. 2,268 Mill. Bu. Imports 112 Mill. Bu. 130 Mill. Bu. 130 Mill. Bu. Total Supply 2,974 Mill. Bu. 3,141 Mill. Bu. 3,141 Mill. Bu. Planted Acres, Average Yield and Total Production are UP from 2011/12. Food 941 Mill. Bu. 950 Mill. Bu. 950 Mill. Bu. Seed 77 Mill. Bu. 73 Mill. Bu. 73 Mill. Bu. Feed & Residual 163 Mill. Bu. 220 Mill. Bu. 220 Mill. Bu. Exports 1,050 Mill. Bu. 1,200 Mill. Bu. 1,200 Mill. Bu. 13.5% increase. Total Use 2,231 Mill. Bu. 2,443 Mill. Bu. 2,443 Mill. Bu. Ending Stocks 743 Mill. Bu. 698 Mill. Bu. 698 Mill. Bu. USDA WASDA September 12, 2012

48 46 44 42 40 38 36 34 32 30 What is the U.S. trend line yield? Average Yield Trend Line Bushels /Acre 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 Sept. 12, 2012 WASDE Wheat Data Base Table 1

U.S. All Wheat Disappearance (Million Bushels) 1,400 1,200 Million Bushels 1,000 800 600 400 Food Exports Feed & Residual Seed 200 0 USDA WASDE Sept. 12, 2012 & USDA Wheat Yearbook -Table 5

All Wheat Supply & Demand Table U.S. All Wheat 2011/2012 (Est.) 2012/2013 (Aug) 2012/2013 (Sep) Food use is very important and relatively stable. Planted A. 54.4 Mill. A. 56.0 Mill. A. 56.0 Mill. A. Harvested A. 45.7 Mill. A. 48.8 Mill. A. 48.8 Mill. A. Yield/Harvest A. 43.7 bu. 46.5 bu. 46.5 bu. Begin Stocks 862 Mill. Bu. 743 Mill. Bu. 743 Mill. Bu. Production 1,999 Mill. Bu. 2,268 Mill. Bu. 2,268 Mill. Bu. Imports 112 Mill. Bu. 130 Mill. Bu. 130 Mill. Bu. Total Supply 2,974 Mill. Bu. 3,141 Mill. Bu. 3,141 Mill. Bu. Food 941 Mill. Bu. 950 Mill. Bu. 950 Mill. Bu. Seed 77 Mill. Bu. 73 Mill. Bu. 73 Mill. Bu. Feed & Residual 163 Mill. Bu. 220 Mill. Bu. 220 Mill. Bu. Exports 1,050 Mill. Bu. 1,200 Mill. Bu. 1,200 Mill. Bu. Total Use 2,231 Mill. Bu. 2,443 Mill. Bu. 2,443 Mill. Bu. Ending Stocks 743 Mill. Bu. 698 Mill. Bu. 698 Mill. Bu. USDA WASDA September 12, 2012

All Wheat Supply & Demand Table U.S. All Wheat 2011/2012 (Est.) 2012/2013 (Aug) 2012/2013 (Sep) Planted A. 54.4 Mill. A. 56.0 Mill. A. 56.0 Mill. A. Feed & Residual is variable, but relatively small. Harvested A. 45.7 Mill. A. 48.8 Mill. A. 48.8 Mill. A. Yield/Harvest A. 43.7 bu. 46.5 bu. 46.5 bu. Begin Stocks 862 Mill. Bu. 743 Mill. Bu. 743 Mill. Bu. Feed use may grow due to tight corn supplies. Production 1,999 Mill. Bu. 2,268 Mill. Bu. 2,268 Mill. Bu. Imports 112 Mill. Bu. 130 Mill. Bu. 130 Mill. Bu. Total Supply 2,974 Mill. Bu. 3,141 Mill. Bu. 3,141 Mill. Bu. Food 941 Mill. Bu. 950 Mill. Bu. 950 Mill. Bu. Seed 77 Mill. Bu. 73 Mill. Bu. 73 Mill. Bu. Feed & Residual 163 Mill. Bu. 220 Mill. Bu. 220 Mill. Bu. Exports 1,050 Mill. Bu. 1,200 Mill. Bu. 1,200 Mill. Bu. Total Use 2,231 Mill. Bu. 2,443 Mill. Bu. 2,443 Mill. Bu. Ending Stocks 743 Mill. Bu. 698 Mill. Bu. 698 Mill. Bu. USDA WASDA September 12, 2012

All Wheat Supply & Demand Table U.S. All Wheat 2011/2012 (Est.) 2012/2013 (Aug) 2012/2013 (Sep) Planted A. 54.4 Mill. A. 56.0 Mill. A. 56.0 Mill. A. Harvested A. 45.7 Mill. A. 48.8 Mill. A. 48.8 Mill. A. Exports are key price factor for wheat. Yield/Harvest A. 43.7 bu. 46.5 bu. 46.5 bu. Begin Stocks 862 Mill. Bu. 743 Mill. Bu. 743 Mill. Bu. Exchange rates (value of USD) are very important. Production 1,999 Mill. Bu. 2,268 Mill. Bu. 2,268 Mill. Bu. Imports 112 Mill. Bu. 130 Mill. Bu. 130 Mill. Bu. Total Supply 2,974 Mill. Bu. 3,141 Mill. Bu. 3,141 Mill. Bu. Food 941 Mill. Bu. 950 Mill. Bu. 950 Mill. Bu. Seed 77 Mill. Bu. 73 Mill. Bu. 73 Mill. Bu. Feed & Residual 163 Mill. Bu. 220 Mill. Bu. 220 Mill. Bu. Exports 1,050 Mill. Bu. 1,200 Mill. Bu. 1,200 Mill. Bu. Total Use 2,231 Mill. Bu. 2,443 Mill. Bu. 2,443 Mill. Bu. Ending Stocks 743 Mill. Bu. 698 Mill. Bu. 698 Mill. Bu. USDA WASDA September 12, 2012

All Wheat Supply & Demand Table U.S. All Wheat 2011/2012 (Est.) 2012/2013 (Aug) 2012/2013 (Sep) Planted A. 54.4 Mill. A. 56.0 Mill. A. 56.0 Mill. A. Drought in Black Sea region will help HRWW and SRWW sales. Harvested A. 45.7 Mill. A. 48.8 Mill. A. 48.8 Mill. A. Yield/Harvest A. 43.7 bu. 46.5 bu. 46.5 bu. Begin Stocks 862 Mill. Bu. 743 Mill. Bu. 743 Mill. Bu. Production 1,999 Mill. Bu. 2,268 Mill. Bu. 2,268 Mill. Bu. Developing drought in Australia will help HRSW Imports 112 Mill. Bu. 130 Mill. Bu. 130 Mill. Bu. Total Supply 2,974 Mill. Bu. 3,141 Mill. Bu. 3,141 Mill. Bu. Food 941 Mill. Bu. 950 Mill. Bu. 950 Mill. Bu. Seed 77 Mill. Bu. 73 Mill. Bu. 73 Mill. Bu. Feed & Residual 163 Mill. Bu. 220 Mill. Bu. 220 Mill. Bu. Exports 1,050 Mill. Bu. 1,200 Mill. Bu. 1,200 Mill. Bu. Total Use 2,231 Mill. Bu. 2,443 Mill. Bu. 2,443 Mill. Bu. Ending Stocks 743 Mill. Bu. 698 Mill. Bu. 698 Mill. Bu. USDA WASDA September 12, 2012

All Wheat Production (Million Metric Ton) Million Metric Ton 80 70 60 50 40 30 20 10 0 United States Russia Kazakhstan Ukraine USDA WASDE Sept. 12, 2012 & USDA PSD Online Custom Query

World Wheat Prod, Use & Stocks/Use (Million Metric Ton) 750.00 700.00 650.00 Stocks-to-Use Total Production Total Use 0.7000 0.6000 Million Metric Tons 600.00 550.00 500.00 450.00 400.00 350.00 300.00 0.5000 0.4000 0.3000 0.2000 0.1000 Stocks-to-Use Ratio USDA WASDE- Sept. 12, 2012 & PSD Custom Query

Corn: Summary of Key Issues Ethanol use and Export pace will be watched weekly. Feed use is the big unknown, will need to monitor Quarterly Grain Stocks Reports. Cattle on Feed, Hogs and Pigs,. Helps estimate number of mouths, but not what they are eating. Watch the basis!! Light test weight corn will not be shipped far (export) Aflatoxin is a problem in some areas, a special waiver now allows blending in Iowa

Summary of Key Issues Soybean: Export pace, especially sales to China, will be watched closely. South American planting and crop condition (i.e. weather) will create significant volatility. Watch the basis!!

Wheat: Summary of Key Issues Exports from Black Sea region are expected to end soon Export ban? Export tax? Watch Australian weather and production carefully. Winter Wheat plantings are expected to increase HRWW fall grazing and crop insurance protection SRWW potential for double crop soybeans Open winter could create winter kill concerns Local impact of changing Canadian grain system

QUESTIONS & COMMENTS? Frayne Olson Dept. of Agribusiness & Applied Econ. NDSU Dept. 7110 P.O. Box 6050 Fargo, ND 58108-6050 701-231-7377 frayne.olson@ndsu.edu http://www.ndsu.edu/cropeconomics

Average Wheat Price vs. Stocks/Use Ratio 14.00 12.00 Price US$/Bu. 10.00 8.00 6.00 4.00 2.00 6.48 8.10 6.78 7.24 5.70 4.55 4.30 4.26 3.453.26 3.403.42 3.56 3.38 2.78 2.622.48 2.65 4.87 1993-2008 2008-2013 0.00 0.000 0.100 0.200 0.300 0.400 0.500 0.600 Stocks/Use Ratio

Average Wheat Price vs. Stocks/Use Ratio 14.00 12.00 Price US$/Bu. 10.00 8.00 6.00 4.00 2.00 6.48 8.10 6.78 7.24 5.70 4.55 4.30 4.26 3.453.26 3.403.42 3.56 3.38 2.78 2.622.48 2.65 4.87 1993-2008 2008-2013 Forecast 1 0.00 0.000 0.100 0.200 0.300 0.400 0.500 0.600 Stocks/Use Ratio

Average Wheat Price vs. Stocks/Use Ratio 14.00 12.00 Price US$/Bu. 10.00 8.00 6.00 4.00 2.00 6.48 8.10 6.78 7.24 5.70 4.55 4.30 4.26 3.453.26 3.403.42 3.56 3.38 2.78 2.622.48 2.65 4.87 1993-2007 2008-2013 Forecast 1 Forecast 2 0.00 0.000 0.100 0.200 0.300 0.400 0.500 0.600 Stocks/Use Ratio