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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 …
February 1, 2013
Beef Cattle
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Center … http://AgLease101.org
Managing risk is required for many farm … many farm enterprises to be profitable and sustainable.
Leasing …
May 22, 2020
Farm Profitability, KFMA Research
provide good insight into the profitability and financial structure of … could at least match the profitability of 2019. However, the coronavirus … https://www.agmanager.info/crop-insurance/risk-management-strategies/mya-price-estimates-updated-arc-and-plc-commodity-0 …
July 1, 1996
Section 2: Considering Cooperatives
the cooperative?
• What risks are the cooperatives exposed … the cooperative?
2. What risks are the cooperative business … great enough to justify the risks
surrounding the cooperative's …
December 1, 2016
KFMA Research
1
Likelihood of Kansas Farm Financial Persistence
Jayce Stabel (jstabel@ksu.edu), Terry Griffin (twgriffin@ksu.edu) and Greg Ibendahl (ibendahl@ksu.edu)
Kansas State University Department of Agricultural Economics – December 2016
Do some farms consistently (persist) outperform their peers?
Persistence: Firm or obstinate continuance in a course of action in spite of difficulty or opposition.
Executive Summary
Often times farmers and agricultural lenders alike seek the ability to identify ways to improve farm
operations’ stability and profitability. Seeking these characteris …
February 1, 2008
Water Policy
Net Present Value of Gross Profit … the least impact on gross profits because of the relatively … irrigation
because of the unknown risk associated with production …
November 27, 2018
Grain Market Outlook
Lingering 2018 U.S. Fall Harvest Delays: As of November 25, 2018 the U.S. corn harvest was estimated
to be 94% complete in the 18 major states – compared to the recent 5 year average of 95% completed.
Moderate end of season harvest delays still lingered in states such as Kansas (94% harvested vs 99% 5‐
yr avg.); Nebraska (94% harvested vs 97% average); North Dakota (80% harvested vs 93% avg.); Ohio
(86% harvested vs 93% avg.); Pennsylvania (82% harvested vs 89% avg.); and South Dakota (90%
harvested vs 97% avg.); To complicate matters in these areas, precipitation in the form of snow had
fallen in parts of Nebraska, Kansas, Iowa, Illinois, and North and South Dakota over the November 19‐
26 period – further slowing harvest in these areas.
The accumulated result of these slow harvest and recent precipitation events will be to delay the final
part of the 2018 U.S. corn harvest to some degree – providing at least moderate uncertainty about final
2018 U.S. corn production and some support for corn prices through the conclusion of the U.S. Fall harvest.
…
General Sessions
2015 Risk andProfit Conference
General Session … includes
livestock and grain, risk management, international … of these record-high price events was short-lived --
less …
April 29, 2020
Grain Market Outlook
April 28, 2020
Recent events in the U.S. economy caused … yield (trendline yield, vs previous record of 76.6 bu/ac in
2017 … crop”
MY 2020/21.
Risk Avoiding Market Responses …
October 16, 2018
Grain Market Outlook
Negative U.S. Corn Market Factors
U.S. Corn Production in 2018: The most important negative market factor is the projected size of the 2018 U.S.
corn crop at 14.778 billion bushels (bb) – forecast to be the second highest on record behind 15.148 bb in
2016, but up from 14.601 bb in 2017 (Table 1 & Figures 5‐7).
Total U.S. Corn Supplies in “new crop” MY 2018/19: In addition, the USDA projects total supplies of U.S. corn
in the “new crop” 2018/19 marketing year (MY) starting 9/1/2018 to be a record high 16.968 bb –
maintaining downward pressure on U.S. corn prices. Total supplies of U.S. corn in MY 2016/17 were a
previous record high of 16.942 bb, and were only marginally lower at 16.934 bb in “old crop” MY 2017/18
which ended on August 31, 2018 (Table 1 & Figure 7).
…