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January 11, 2021
Feeder Cattle Pricing
managing feeder cattle price risk is to hedge the transaction … vice versa, subject to basis risk. This practice reduces uncertainty … it can lead to lower net profits at times relative to
an …
Breakout Sessions
2012 Risk andProfit Conference
Breakout Session … work in cropping systems profitability, since the passage of the … SURE
Establishes Ag Risk Coverage (ARC)
Maintains …
September 5, 2017
Grain Market Outlook
as ethanol plants on September 1st ranged from $3.22 ¾ ($0.35 under
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DEC) to $3.72 ¾ ($0.15 over DEC) – indicating continuing strength in ethanol demand for corn in Kansas and
nationwide. While the “large supply and tight storage availability” situation still predominates in local Kansas
grain markets, it is a positive that Kansas cash corn prices have avoided falling down to USDA loan rate levels.
3. Major Corn Market Considerations for Fall 2017 through Spring 2018
First, large beginning stocks of U.S. corn coming into “new crop” MY 2017/18 have been a “mitigating”
factor limiting the response of the corn market to 2017 summer production risk. The corn market has b …
May 19, 2014
Agribusiness Papers
Starbird, 2005), the potential risks
associated with a stained … knowledge about those at risks and the factors that contribute … nutrition and food security risks provide better policy instruments …
December 27, 2017
Grain Market Outlook
The recent upward trend in the relative value of the U.S. dollar began in earnest after the trade‐weighted
dollar index was valued at 77.5480 in August 2014. This trend continued throughout the remainder of 2014‐
2015 into early 2016 – with the index climbing to a high of 95.3919 in December 2016 (up 23.0% from August
2014). Since then the index declined 8.7% down to 87.0803 in September 2017, before moving higher again to
an average of 88.6866 in October, and 89.1571 during November, and 88.9664 during Dec. 1‐15, 2017 period.
In addition, since January 2007 the monthly price of Ordinary Protein HRW Wheat in Kansas City,
Missouri has averaged $6.97 per bushel with a median value of $6.84 – which also indicates positive skewness
(i.e., a few extremely high values pulling up the average) (Figure 3). Over the same period the monthly price of
Ordinary Protein HRW Wheat at Texas Gulf Ports has averaged of $6.48 per bushel with an equivalent median
value of $6.48. The average difference between KC MO and Texas Gulf Ports HRW Wheat cash prices during
this period was $0.29 per bushel – with KC MO prices averaging higher than in Texas Gulf Ports. The median
difference was $0.20 per bushel (i.e., KC MO price greater than the Texas Gulf price), with a minimum of
($0.30) under in September 2009, and a maximum of $1.48 over in February 2008.
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Figure 2. Monthly U.S. Trade Weighted Dollar Index (Major Currencies) vs TX Gulf & KC MO Wheat
Prices (in USD$s), January 1973 through Mid‐December 2017 (St. Louis Federal Reserve Bank, FRED & USDA) …
August 15, 2022
Ag Law Issues
Coverage (PLC) Agricultural Risk Coverage (ARC), marketing … the actual plantings for 2009-
2012. Under the 2018 Farm … Coverage Option
(SCO). It is a risk management tool that is designed …
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 …
August 20, 2013
Land Buying and Valuing
year) and say 98.74 in
year 2009 (as it actually was). In … the rate of inflation from 2009 to 2010 is (100-98.74)/98.74 … price or cost of $5.00 in 2009 is
expected to have a price …
December 4, 2013
1999 2001 2003 2005 2007 2009 2011 2013
$ Per Cow
Livestock … Expansion Discussion
• Expected Profit
– 2014 LMIC Forecast 2X 04’ & 13’
• … 1,121; 2012 ‐ $1,317
• Profit Risk
– Context on environment of price variability…
• …
October 20, 2016
Grain Market Outlook
The total futures carrying charge or “term spread” between DEC 2016 and JULY 2017 CME Kansas Wheat
futures contracts on Wednesday, October 19th was $0.39 ½ per bushel (i.e., $4.64 ¾ for JULY 2017 less $4.25 ¼
for DEC 2016 Corn), or $0.06643 per bushel per month. This compares to 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, for storage of wheat from December 2016 to July 2017 to at least
break even, local wheat basis levels would need to at least stay level or unchanged from current levels to fully
cover commercial storage charges over the same period. Also, it would be prudent to actually place a storage
hedge on the CME Kansas July 2017 futures contract if a person were actually holding wheat for sale that long.
Otherwise the possibility of seasonal harvest price weakness in June of 2017 could put these projected storage
profits at risk.
Kansas Wheat Seasonal Average Cash Price Trends
Seasonal average price index trends for Kansas wheat over the last 17 marketing years indicate definite
seasonal impacts or trend in cash wheat prices (Figure 2). Since the 1999/2000 marketing year Kansas hard
red winter wheat cash prices have typically been weakest during the harvest month of July, with an average
seasonal price index of 98.4% of the unweighted marketing year average Kansas wheat cash price for the June
through May marketing year. However, Kansas cash wheat prices have then tended to trend higher after
harvest through September‐October, then trended sideways from November through January, with moderate
seasonal strength in February‐March – followed by a sideways‐to‐lower trend during April and May.
The projected U.S. average cash price for U.S. hard red winter wheat in the “current crop” 2016/17
marketing year exhibits a pronounced price low in August‐September 2016 with monthly prices climbing
steadily from October through January 2017 – with a sideways to declining trend during February, followed by
a trend higher in April‐May (Figure 2). “Current crop” MY 2016/17 for U.S. wheat began on June 1, 2016 and
will conclude on May 31, 2017. If this projected price pattern were to become reality, it would signal the
JULY 2017 CME KS HRW Wheat Futures
August 20, 2015 – October 19, 2016
Close = $4.64 ¾ on 10/19/2016
DEC 2016 CME KS HRW Wheat Futures
August 20, 2015 – October 19, 2016
Close = $4.25 ¼ on 10/19/2016
Page | 5
likelihood of returns to storage for Kansas wheat over the October 2016 harvest through January 2017 period.
These projections are taken from the USDA Economic Research Service (ERS) wheat futures price forecast
model, available online at the following web address:
http://www.ers.usda.gov/data‐products/season‐average‐price‐forecasts.aspx
According to historic price patterns, most of the post‐harvest increase in Kansas wheat prices is usually
realized from July through October, with movement being mostly sideways through the remainder of the
marketing year. The most variability around these monthly indices have occurred during June‐July and the
period when the Kansas hard red winter wheat crop breaks winter dormancy (i.e., February‐March), with
accompanying production uncertainty in late spring (i.e., May).
Figure 2. Kansas Wheat Seasonal Price Index – Last 17 Marketing Years (MY 1999/00 – MY 2015/16)
plus “current crop” MY 2016/17 USDA projection (Source: KSU www.AgManager.info & USDA)
U.S. Trade Weighted Dollar Index & Global Wheat Prices
Since 1973 the monthly average trade‐weighted index value of the U.S. dollar relative to the currencies
of U.S. trading partner countries has averaged 94.3680 with a median value of 93.1623 – indicating some
positive skewness in U.S. dollar index values (i.e., a few very high values pulling up the average) (Figure 3).
The historic low in the U.S. dollar trade weighted index since 1973 was 69.0247 – occurring in August 2011.
The historic high of 143.9059 occurred in March 1985. Over the January 1973 through September 2016 period
the U.S. dollar index has declined at a rate of ‐0.0609 per month …