OUTLOOK FOR COMMODITY PRICES Darrel Good Department of Agricultural and Consumer Economics University of Illinois at Urbana-Champaign Executive Summary • Large U.S. crops for sixth consecutive year. • World grain consumption to exceed world production. • U.S. and world stocks at modest levels. • U.S. winter wheat acreage reduced. • U.S. corn exports start slowly. • U.S. soybean and soybean meal export prospects boosted by meat and bone meal ban in Europe. • Another large South American soybean crop. • Corn prices to be steady through the winter, with some basis weakness in January. Spring rally likely. • Soybean prices will be more volatile, but upside limited for now by large South American crop. Higher prices in the spring. • Wheat prices to reflect January seedings report and winter weather conditions. Large carry offers an opportunity to forward price new crop. • Modest expansion in U.S. hog production in 2001. • Hog prices to remain profitable at least through mid-year. If expansion is excessive, prices to weaken beginning in fourth quarter of 2001. • Cattle numbers are in a cyclical decline. • Some expansion of the beef breeding herd in 2001. • Beef production to decline beginning last half of 2001. • Cattle prices in a cyclical increase through 2002.
Outlook for Commodity Prices by Darrel Good
US Corn Production 11.0 10.0 Billion Bushels 9.0 8.0 7.0 6.0 5.0 4.0 3.0 2.0 7980818283848586878889 9091929394959697989900 Marketing Year
US Corn Exports 2.4 Billion Bushels 2.2 2.0 1.8 1.6 1.4 1.2 1.0 79 8081 82 83 8485 86 8788 89 90 9192 93 94 9596 97 9899 00 Marketing Year
Ending Stocks of Corn 4800 4500 4200 3900 3600 Million Bushels 3300 3000 2700 2400 2100 1800 1500 1200 900 600 300 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 Marketing Year
World Coarse Grains–Ending Stocks 250 240 230 220 210 200 Million Tons 190 180 170 160 150 140 130 120 110 100 90 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 Marketing Year
US Corn Acres Planted 86,000 84,000 82,000 80,000 78,000 1,000 Acres 76,000 74,000 72,000 70,000 68,000 66,000 64,000 62,000 60,000 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 Marketing Year
US Soybean Production 3 .0 2 .8 B illio n B ushe ls 2 .6 2 .4 2 .2 2 .0 1 .8 1 .6 1 .4 1 .2 1 .0 7 9 8 0 8 1 8 2 8 3 8 4 8 5 8 6 8 7 8 8 8 9 9 0 9 1 9 2 9 3 9 4 9 5 9 6 9 7 9 8 9 9 0 0 M a rk e ting Y e ar
South American Soybean Production 61 58 55 52 49 46 Million Tons 43 40 37 34 31 28 25 22 19 16 13 10 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 Marketing Year
US Soybean Exports 1.1 1.0 0.9 Billion Bushels 0.8 0.7 0.6 0.5 0.4 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 Marketing Year
Ending Stocks of Soybeans 550 520 490 460 430 Million Bushels 400 370 340 310 280 250 220 190 160 130 100 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 Marketing Year
World Soybeans – Ending Stocks 30 28 26 24 22 Million Tons 20 18 16 14 12 10 8 6 4 2 0 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 Marketing Year
US Soybean Acres Planted 76000 74500 73000 71500 70000 1,000 Acres 68500 67000 65500 64000 62500 61000 59500 58000 56500 55000 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 Marketing Year
US Wheat Production 3000 2900 2800 2700 2600 Million Bushels 2500 2400 2300 2200 2100 2000 1900 1800 1700 1600 1500 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 Marketing Year
US Wheat Exports 1800 1725 1650 1575 Million Bushels 1500 1425 1350 1275 1200 1125 1050 975 900 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 Marketing Year
Ending Stocks of Wheat 550 520 490 460 430 Million Bushels 400 370 340 310 280 250 220 190 160 130 100 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 Marketing Year
World Wheat Ending Stocks 2000 1900 1800 1700 1600 1500 m illion bus hels 1400 1300 1200 1100 1000 900 800 700 600 500 400 300 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00
US Wheat Acres Planted 90,000 88,000 86,000 84,000 82,000 80,000 1,000 Acres 78,000 76,000 74,000 72,000 70,000 68,000 66,000 64,000 62,000 60,000 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 Marketing Year
US Commercial Beef Production 27000 26500 26000 25500 Million Pounds 25000 24500 24000 23500 23000 22500 22000 21500 21000 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 Marketing Year
Slaughter Steer Price 80 78.5 77 75.5 74 72.5 71 $/c w t 69.5 68 66.5 65 63.5 62 60.5 59 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 M a rke ting Y e a r
US Commercial Pork Production 20000 19500 19000 18500 Million Pounds 18000 17500 17000 16500 16000 15500 15000 14500 14000 13500 13000 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 Marketing Year
Hog Prices (Barrows and Gilts, US) 60 58 56 54 52 50 48 $/cwt 46 44 42 40 38 36 34 32 30 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 Marketing Year
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