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February 17, 2020
Grain Marketing Presentations
Jan 2020)
o Struggling profitability for 2013-2019 HRW Wheat
o … early)
16
More Grain Market Events to Anticipate
2020 Production … • ARG-Brazil-Ukraine Ag Export “Open Door” w …
April 19, 2017
Grain Market Outlook
DECEMBER (DEC) 2017 CME Kansas hard red winter wheat futures traded as high as $5.90 ¼ on
April 20, 2016, and $5.90 on June 8, 2016 before declining approximately $0.90 per bushel by early
July. Then, following lows of $4.74 per bushel on August 31st, $4.72 ½ on October 12th, and $4.59 ½
DEC 2017 CME KS HRW Wheat Futures
February 18, 2016 – April 18, 2017
Close = $4.74 ¼ on 4/18/2017
MAY 2017 CME KS HRW Wheat Futures
February 18, 2016 – April 18, 2017
Close = $4.19 ¼ on 4/18/2017
Page | 4
on December 1, 2016, DEC 2017 CME Kansas hard red winter wheat futures prices traded up to a high
of $5.30 ¾ on February 16, 2017. From that February 16th high, DEC 2017 CME KS HRW Wheat
futures then traded lower – down to a low of $4.68 ½ on March 31st and $4.69 on April 18th before
closing at $4.74 ¼ that same day (Figure 1).
The total futures carrying charge or “term spread” between MAY 2017 and JULY 2017 CME Kansas Wheat
futures contracts on Tuesday, April 18th was $0.12 ¾ per bushel (i.e., $4.32 for JULY 2017 less $4.19 ¼ for MAY
2017 Wheat), or $0.06375 per bushel per month. This compares to commercial storage charges in Kansas grain
elevators in the range of $0.04 to $0.05 per bushel per month – before interest or additional handling costs or
other discounts are accounted for.
Given these futures carrying charges, commercial storage of wheat from MAY 2017 to JULY 2017 would at
least break even and/or cover costs (i.e., carry of $0.06375 /bu/mo is greater than $0.04‐$0.05 /bu/mo storage
cost) IF local cash wheat basis levels would at least stay unchanged and not weaken further over the May‐July
2017 period. Along this same lines of reasoning, it may be profitable to actually place a stor …
September 6, 2017
Grain Market Outlook
State University that these USDA projections for “new crop” MY 2016/17 have a 55% probability of
occurring.
Four Alternative KSU U.S. Wheat Supply/Demand Forecast for “New Crop” MY 2017/18
To represent possible alternative outcomes from the USDA’s August 10th projection, four potential KSU‐
Scenarios for U.S. wheat supply‐demand and prices are presented for “new crop” MY 2017/18.
KSU Scenario 1) “Lower U.S. Production” Scenario (25% probability) assumes for “new crop” MY 2017/18
that the following occurs. This scenario assumes that there will be 46.657 ma planted, 83.72% harvested‐to‐
planted, 37.500 ma harvested, 44.0 bu/ac yield, 1.650 bb production, 2.984 bb total supplies, 975 mb exports,
150 mb feed & residual use, 2.141 bb total use, 843 mb ending stocks, 39.37% stocks/use, & $5.20 /bu U.S.
wheat average price.
KSU Scenario 2) “Lower U.S. Wheat Exports” Scenario (10% probability) assumes the following for “new
crop” MY 2017/18: Production of 1.739 bb (same as the USDA), 3.074 bb total supplies, 800 mb exports, 150
mb feed & residual use, 1.966 bb total use, 1.108 bb ending stocks, 56.36% stocks/use, & $3.75 /bu U.S. wheat
average price;
KSU Scenario 3) “Higher U.S. Wheat Exports” Scenario (5% probability) assumes the following for “new
crop” MY 2017/18: Production of 1.739 bb (same as the USDA), 3.074 bb total supplies, 1.200 bb exports, 150
mb feed & residual use, 2.366 bb total use, 708 mb ending stocks, 29.92% stocks/use, & $6.00 /bu U.S. wheat
average price;
KSU Scenario 4) “Wildcard Foreign Events” Scenario (5% probability) assumes the following for “new
crop” MY 2017/18: Production of 1.739 bb (same as the USDA), 3.074 bb total supplies, less than 700 mb
exports, 150 mb feed & residual use, less than 1.800 bb total use, more than 1.300 bb ending stocks, greater
than 65% stocks/use, & less than $3.00 /bu U.S. wheat average price;
…
May 22, 2017
Grain Market Outlook
DEC 2017 CME KS HRW Wheat Futures
March 21, 2016 – May 19, 2017
Close = $4.80 ¼ on 5/19/2017
JULY 2017 CME KS HRW Wheat Futures
March 21, 2016 – May 19, 2017
Close = $4.38 on 5/19/2017
Page | 4
DECEMBER (DEC) 2017 CME Kansas hard red winter wheat futures traded as high as $5.90 ¼ on
April 20, 2016, and $5.90 on June 8, 2016. Then DEC 2017 HRW wheat futures declined to lows of
$4.74 per bushel on August 31st, $4.72 ½ on October 12th, and $4.59 ½ on December 1, 2016. DEC
2017 CME Kansas hard red winter wheat futures then traded up to a high of $5.30 ¾ on February 16,
2017. From that February 16th high, DEC 2017 CME KS HRW Wheat futures then traded lower –
down to a low of $4.67 on April 25th before rising to $5.09 on May 2nd before closing at $4.80 ¼ on
Friday, May 19th (Figure 1).
The total futures carrying charge or “term spread” between JULY 2017 and DEC 2017 CME Kansas Wheat
futures contracts on Friday, May 19th was $0.42 ¼ per bushel (i.e., $4.80 ¼ for DEC 2017 less $4.38 for JULY
2017 Wheat), or $0.07042 per bushel per month. This compares to commercial storage charges in Kansas grain
elevators in the range of $0.04 to $0.05 per bushel per month – before interest or additional handling costs or
other discounts are accounted for.
Given these futures carrying charges, commercial storage of wheat from JULY 2017 to DEC 2017 would at
least break even and/or cover costs (i.e., carry of $0.07042 /bu/mo is greater than $0.04‐$0.05 /bu/mo storage
cost) IF local cash wheat basis levels would at least stay unchanged and not weaken further over the May‐July
2017 period. Along this same lines of reasoning, it may be profitable to actually place a stor …
Breakout Sessions
2012 Risk and Profit Conference
Breakout Session … work in cropping systems profitability, since the passage of the … Troy Dumler
Extension Ag Economist
Kansas State …
August 22, 2018
Grain Marketing Presentations
for 2018 - 2019
Western KS Ag Research Center Field Day
Hays … KCOmaha Branch
Grain Market Events to Come ….
1) 2018 U.S … HRW wheat $’s in 2018?
o Profits for 2018 Kansas HRW Wheat …
August 1, 2018
General Sessions
2018 - 2019
2018 KSU Risk & Profit Conference
Manhattan, Kansas
DANIEL … KCOmaha Branch
Grain Market Events to Come ….
1) 2018 U.S … HRW wheat $’s in 2018?
o Profits for 2018 Kansas HRW Wheat …
that is contingent on future events• A formal claim follows … house
Conversions
•Traditional to ROTH
•Starting 2010 – allowed to make non deductible … rate are not contingent on profit, etc.o Not convertible into …
April 16, 2020
Land Buying and Valuing
of Directors
4 Kansas Farm Profitability Trends
6 State Land Value … Secretary/Treasurer
Mykel Taylor – Education/Events Coordinator
Fred Olsen – … K-State family.
Kansas Farm Profitability Trends
Welcome to the second …
July 19, 2017
Grain Market Outlook
The elevated value of the U.S. trade weighted dollar index since mid‐2014 has been a significant negative
factor in export markets for U.S. wheat in particular as well as other U.S. grains. A higher U.S. dollar exchange
rate relative to other major currencies generally makes it more expensive for foreign buyers of U.S. grains to
exchange their country’s currencies for U.S. dollars – which they would then in turn use to purchase U.S. grain
exports (i.e., which are denominated or “priced” in U.S. dollars in U.S. grain markets).
U.S. Wheat Production Acreage, Yield & Production
U.S. Wheat Planted Acreage
In the June 30, 2017 Acreage report, the USDA projected that 2017 U.S. total wheat planted acres would
46.567 million acres (ma). This amount of U.S. wheat planted acres would be down 4.497 ma (‐9.0%) from
50.154 million acres (ma) in 2016, down 9.342 ma (‐17.0%) from 54.999 ma in 2015, down 19.7% from 56.841
ma in 2014, and down 18.8% from 56.236 ma in 2013 (Table 1 and Figures 4 & 5). Kansas State University
projections for All U.S. Wheat Planted Acres in 2017 equal those of the USDA.
U.S. Winter Wheat Planted Acres in 2017: In its June 30, 2017 Acreage report the USDA NASS
estimated U.S. winter wheat planted acres for harvest in 2017 to be 32.839 ma (Table 1 and Figures 4 & 5).
Winter wheat seedings of 32.839 ma in 2017 (seeded in fall 2016 for harvest in 2017) were down 3.390 ma (‐
9.4%) to 36.137 ma in 2016, down 6.934 ma (‐17.5%) from 39.681 ma in 2015, down 9.662 ma (‐22.8%) from
42.409 ma in 2014, and down 10.483 ma (‐24.25%) from 43.230 ma in 2013.
With low winter wheat prices (i.e., below USDA marketing loan rates throughout the state of Kansas during
the fall seeding period in September‐October 2016), associated low profitability prospects, and intensive
localized infestations of debilitating diseases such as wheat streak mosaic, it was thought that the proportion
of harvested‐to‐planted acres for winter wheat in 2017 would be lower than normal historically. In particular,
it seemed likely that in the U.S. central and southern Great Plains regions a larger than normal proportion of
hard red winter wheat acres would be “grazed out” by cattle or planted to other crops in spring 2017.
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Monthly Trade Weighted U.S. Dollar Index (1973=100) (No Seas. Adj …