Grain, Energy and Economic Outlook for 2015
Mike Murphy gives positive outlook of U.S. economy.
SAN ANTONIO, Texas (Feb. 5, 2015) — World stocks-to-use supplies are higher for corn, soybeans and wheat during this 2014-2015 marketingyear, said CattleFax market analyst Mike Murphy. The risk management specialist spoke to attendees of the 2015 Cattle Industry Convention & NCBA Trade Show during the CattleFax Outlook Seminar in San Antonio, Texas, Feb. 5.
In the United States, Murphy predicted 2015 planted acreage for corn at 88.9 million acres, down from 90.0 million last year; soybeans at 87.2 million acres, up from 84.2 million last year; and wheat at 56.2 million acres; holding relatively steady but down from 56.8 million.
In 2014, Murphy said, the soybean-corn price spread supported the largest increases in U.S. soybean acres relative to corn in more than 30 years.
In 2014, Mike Murphy said, the soybean-corn price spread supported the largest increases in U.S. soybean acres relative to corn in more than 30 years.
Spot corn futures prices will be in the range of $3.50 to $3.60, he said, and prices at $4.00 to $4.25 will meet resistance. The largest use of corn, he predicted, will be in livestock feed, mainly for the pork and poultry industries.
Corn for ethanol production is expected to be steady in 2015, he explained, but the Renewable Fuels Standard will be under review for the next two years. Ethanol production will trend with gasoline production in 2015. Cheaper petroleum may discourage discretionary ethanol usage, he said.
Gasoline and diesel inventories are higher starting 2015 than they were last year, which has eased consumer prices. Murphy said prices should range from $1.80 to $2.80 per gallon of gasoline and from $2.80 to $4.00 per gallon of diesel. Domestic usage of gas and diesel has decreased due to better fuel economy and driving less on either coast of the United States, he said.
The United States can’t export crude oil, only refined products, Murphy explained. U.S. exports have increased in the last 10 years. More domestic production helps offset volatility.
“Roughly 80% of domestic petroleum needs are refined from U.S. crude oil. Imports have decreased because of this, averaging 7.4 million barrels per day, the lowest volume in more than a decade,” Murphy noted.
The U.S. economy is relatively stable, with 3% growth predicted for 2015. China has shown significant growth on a year-to-year basis, though that growth is slowing. Excluding China and the United States, the world economy is not growing much.
Favorable weather patterns have allowed for more production for most countries, increasing supplies. The trade situation is affected by the strengthening U.S. dollar, and the state of other nations’ currencies will play a role in global trade, he concluded.
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