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May 7, 2019
Grain Market Outlook
A Deferred Future “Carrying Charge” View of KS HRW Winter Wheat Futures
On May 6th carrying charges between the JULY 2019 to SEPTEMBER 2019 Kansas HRW Wheat futures
contracts (i.e., the JUL‐SEP 2019 Spread) were $0.11 per bushel, or $0.0550 per bushel per month. This
compares to spreads of $0.22 /bu or $0.0733 /bu/mo. for SEP‐DEC 2019, and $0.2250 /bu or $0.0750 /bu/mo.
for DEC 2019‐MAR 2020 Kansas HRW Wheat futures contracts.
These “full carry” deferred futures full contract storage cost contract spreads are influenced by large
supplies on hand – which leads to higher Variable Storage Rates (VSR) among Kansas HRW Wheat futures
contracts. These large carries are encouraging storage of “new crop” 2019 Kansas HRW wheat on the one
hand, and provide the basis for a potential return to storage hedges by producers and grain elevators for the
2019 HRW wheat crop on the other.
Extending this analysis further to later deferred contracts, whereas on May 6th harvest JULY 2019 Kansas
HRW Wheat futures closed at $4.03 /bu, the JULY 2020 contract closed at $4.84 ¾ /bu for JULY 2020 – up
20.2% and $0.0681 /bu/month from JULY 2019. Extending even further into the next year, on May 6th JULY
2021 KS HRW Wheat closed at $5.42 ½ /bu, up 11.9% and $0.0479 /bu/month from JULY 2020
From an economic viewpoint, these deferred years’ JULY Kansas HRW Wheat futures prices in years 2020
& 2021 could reflect market expectations that HRW wheat futures prices will eventually be higher than
current bids for JULY 2019 futures – which is consistent with economic theory. However, it also seems that
the carrying charges now reflected across the range of available deferred KS HRW Wheat futures contracts
appear to be being extended out to the distant “new crop” JULY 2020 and JULY 2021 contracts.
Restated, it appears these uninterrupted positive carrying charges are being inflexibly and mechanically
applied to deferred KS HRW Wheat futures contracts as far as 24 months into the future – regardless of what
expected fundamental supply‐demand conditions may be in the wheat market that far out. If this is so, then
these deferred futures prices may present: a) opportunities for long‐term market arbitrage positions to
traders, or b) hedging opportunities for U.S. wheat producers IF they are able to financially manage the risk of
potential margin call …
September 17, 2018
Grain Marketing Presentations
for 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 …
August 1, 2017
Breakout Sessions
2017 Risk andProfit Conference
Breakout Session … analysis,
bioenergy impacts and risk management strategies, b … education programs on market risk,
government commodity programs …
March 25, 2019
Grain Market Outlook
… ccur in “new crop” MY 2019/20 – which will begin on June
1, 2019. The risk of tightening stocks is … hese countries place themselves at risk to the effect of
market …
October 9, 2023
Prices and Price Forecasts
a
significant effect on farm profitability. As shown by Ibendahl, Fertilizer … have large effects on farm
profitability.
Ibendahl has been predicting … fertilizer purchases could improve profitability. All the major fertilizer …
February 4, 2013
Macro and Global Economic Perspectives
Solutions
2013 Risk & Financial Management Conference
Brian C. Briggeman
Associate Professor and
Director of the Arthur Capper Cooperative Center
• … Herd liquidation continues?
3. Uncertainty of macro events outside of producers’ control
Will agriculture boom or bust in 2013?
2/4/2013
2
While the drought dinged net farm incomes in
2012, incomes were some of the largest on record.
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USDA forecasts 2012
NFI to decline 5%
Ending Stocks‐to‐Daily Use
Source: USDA PS&D Data
The 2012 drought made an already tight stock
situation even tighter.
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SoybeansDays Available …
August 1, 2021
General Sessions
OUTLOOK
https://www.agmanager.info/events/risk‐and‐profit‐conference
Quarterly Forecasts … 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019 … 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019 …
2021 Risk and Profit Conference Recordings
OUTLOOK
https://www.agmanager.info/events/risk‐and‐profit‐conference
Quarterly Forecasts … 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019 … 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019 …
March 11, 2022
Risk and Profit Online Mini-Conference Presentations
Hence, even with higher revenue projections net profit remained uncertain
• … Expanded livestock producer, price risk management resources
• … Corn
Markets Often Operate Like A Pendulum Consider 2019 Holcomb Event
Higher Grain Price Impacts: Primarily A Supply‐Side Story• …