Current Market Situation For Grains and Cattle!

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Current Market Situation For Grains and Cattle!

• Rodney Jones
• OSU NW Area Extension Economist

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Start With Grains

• We now have a drought that matters!!!
• 55 to 60 of U.S. Ag Land under drought conditions

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Livestock Marketing Information Center Data
Source USDA-NASS, Compiled Analysis by LMIC
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Livestock Marketing Information Center Data
Source USDA-NASS, Compiled Forecasts by LMIC
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Livestock Marketing Information Center Data
Source USDA-NASS, Compiled Forecasts by LMIC
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Livestock Marketing Information Center Data
Source USDA-NASS, Compiled Forecasts by LMIC
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CBT Corn, Dec. 2012
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Corn Relevant Numbers
Current Projections
Average
Billion Bushels
1.18 1.5
5.3 5.1
U.S. Ending Stocks
World Ending Stocks
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Feedgrain Considerations

• World ending stocks projections about average,
  U.S. well below average
• Yields and harvested acres keep getting trimmed
• In short crop years prices peak early
• Demand may waiver at high prices

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CBT Soybeans, Nov. 2012
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U.S. Soybean Situation
(Billion Bushels)
2005 3.1 2.9 0.50 5.66
2006 3.2 3.1 0.57 6.43
2007 2.7 3.1 0.21 10.10
2008 3.0 3.0 0.14 9.97
2009 3.4 3.4 0.15 9.59
2010 3.3 3.3 0.22 11.30
2011 3.1 3.1 0.21 12.35
2012 3.1 3.1 0.13 14.00
7-YR Avg. 3.1 3.13 0.29 9.34
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World Soybean Situation
(Billion Bushels)
2005 8.10 7.91 1.95
2006 8.72 8.29 2.31
2007 8.13 8.44 1.89
2008 7.79 8.13 1.56
2009 9.59 8.75 2.23
2010 9.73 9.23 2.58
2011 8.67 9.31 1.93
2012 9.8 9.67 2.05
7-YR Avg. 8.61 8.58 2.07
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Soybean Relevant Numbers
Average
Current Projections
Billion Bushels
0.13 0.29
2.05 2.07
U.S. Ending Stocks
World Ending Stocks
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Soybean Considerations

• U.S. Ending stocks projected to be well below
  average World ending stocks projected to be
  slightly below average
• Weather influence comes later than for corn
• Yields projections continue to fall
• South America will plant a lot of beans

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KCBT Wheat, Dec 012
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U.S. Wheat Situation
(Billion Bushels)
2005 2.10 2.16 .571 3.42
2006 1.81 2.05 .456 4.26
2007 2.05 2.31 .306 6.48
2008 2.50 2.28 .657 6.78
2009 2.22 2.02 .976 4.87
2010 2.21 2.42 .862 5.70
2011 2.00 2.25 .728 7.25
2012 2.23 2.39 .694 6.20
7-YR Avg. 2.13 2.19 .651 5.54
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World Wheat Situation
(Billion Bushels)
2005 22.0 22.9 5.5
2006 21.9 22.7 4.7
2007 22.5 22.7 4.6
2008 25.1 23.6 6.1
2009 25.2 23.9 7.4
2010 23.9 24.0 7.2
2011 25.5 25.5 7.2
2012 24.5 25.0 6.7
7-YR Avg. 23.8 23.6 6.1
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Wheat Relevant Numbers
Current
Projections
Average
Billion Bushels
.664 .653
6.7 6.1
U.S. Ending Stocks
World Ending Stocks
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Wheat Considerations

• Wheat fundamentals cannot support current prices
  on own
• With that said, the supply situation is
  tightening relative to last few years
• World economic concerns may be the biggest
  downside risk (remember 2008 2009)
• Very strong incentive to pull acres out of wheat
  and go to canola in areas where that is an option

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Economic Output Change (2012, 2013 projected),
IMF
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Economic Output Change (2012, 2013 projected),
IMF
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Livestock Marketing Information Center Data
Source USDA-AMS
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Livestock Marketing Information Center Data
Source USDA-AMS
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Livestock Marketing Information Center Data
Source USDA-AMS, Compiled Analysis by LMIC
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Livestock Marketing Information Center Data
Source USDA-NASS
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1.4
Livestock Marketing Information Center Data
Source USDA-NASS
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Livestock Marketing Information Center Data
Source USDA-AMS, Compiled Analysis by LMIC
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Livestock Marketing Information Center Data
Source USDA-AMS USDA-NASS
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Livestock Marketing Information Center Data
Source USDA-NASS, Compiled Analysis by LMIC
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Livestock Marketing Information Center Data
Source USDA-AMS USDA-NASS
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Livestock Marketing Information Center Data
Source USDA-AMS USDA-NASS
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Total Meat Supplies Down in 2012

• 2011 2012
• Beef ?0.4 ?2.6
• Pork ?1.5 ?2.4
• Broilers ?1.1 0.0
• Total Meat ?0.9 0.0

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Livestock Marketing Information Center Data
Source USDA-AMS USDA-NASS, Compiled
Analysis by LMIC
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Data Source KSU Focus on Feedlots, Compiled by
LMIC
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Steer Price, Total Value and Value of Gain Jun
2012, Oklahoma 7-Market Ave.
Weight (lbs) Average Price (/cwt.) Total Value (/head) Value of Gain 425 lb. Beg. Weight (/lb.) Value of Gain 525 lb. Beg. Weight (/lb.) Value of Gain 625 lb. Beg. Weight (/lb.)
425 187.56 797.13
475 189.25 898.94
525 173.17 909.14
575 170.41 979.86 1.22
625 165.06 1031.63 1.17
675 159.96 1079.73 1.13 1.14
725 157.06 1138.69 1.14 1.15
775 155.14 1202.34 1.16 1.17 1.14
825 152.33 1256.72 1.15 1.16 1.13
875 145.60 1274.00 1.06 1.04 0.97

Value of forage is high for cow-calf and a wide
range of stocker production
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Livestock Marketing Information Center Data
Source USDA-AMS, Compiled Analysis by LMIC
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Livestock Marketing Information Center Data
Source USDA-AMS USDA-NASS, Compiled
Analysis by LMIC
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