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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 calls should wheat prices should move unexpectedly higher. For agricultural producers,
these extended deferred futures prices provide profitable but at risk pricing opportunities should they choose
to bear the risk of utilizing them.
3 …
May 30, 2019
Precision Ag and Technology Articles, KFMA Research
been readily adopted while others lagged. Analysis of
608 … measured from left to right). Other technologies introduced to … longer violin shapes than other technologies …
October 21, 2020
Livestock Insurance, Crop Insurance Papers, 2020 K-State Crop Insurance Workshop Presentations
Backgrounded feeder cattle under new provisions
Livestock insurance options by type of risk
Production
FeedPrice
LRP
PRF
LGM
DRP
MPCI
WFRP
Production Risk:Events such as disease or weather that can lead to a decline in production/weight gain or mortalityPrice RiskMarket price might drop, even to the point of not covering the cost of productionFeed RiskIf crop/forage yield decreases, feed may become expensive or difficult to purchase
Policies in red are never …
September 4, 2025
Crop Insurance Papers
likelihood and size of payments. Other
considerations not analyzed … share of the premium. In other words, we look
at net indemnities—SCO … typical or average value. In other words, we hold 2025
costs …
July 31, 2018
Grain Market Outlook
ate April –
early May. This situation of low U.S. grain sorghum exports is unlikely to be sustained indefinitely, but has
certainly been the case since Spring 2018.
Opportunities for Other Domestic Uses: Converse t … F that occurs, then it is likely again that U.S. sorghum exports will
become the primary driver of grain sorghum usage, domestic prices, and market prospects going forward into
the future. In that event, U.S. grain sorghum would …
December 1, 1997
Section 2: Considering Cooperatives
company, corporation,
or some other business structure. Although … the steps, the
sequence of events will vary according to the … opportunity and contacts others who
also may be interested …
Funding a Buy-Sell Agreement with Corporate Owned Life Insurance - Will Corporate Value Be Enhanced?
December 8, 2023
Ag Law Issues
agreements and common triggering events.
With today’s article … article I dive deeper into other issues associated with buy-sell … closely held business (or other property) is determined
without …
January 1, 2013
Land Leasing
Forms
information about this and other leases, visit http://AgLease101.org
Managing … trust and confidence in each other.
? T he operator must convince … bulls. While the leasing
of other items such as pasture, hay …
October 15, 2018
2018 Crop Insurance Workshop Presentations
KCOmaha Branch
Grain Market Events to Come ….
1) 2018 U.S … 2018 Kansas HRW Wheat vs Other Crops
More Grain MarketEvents to Anticipate….
3) 2019 … More Grain Market Events to Anticipate….
5) 2019 …
May 1, 2003
Assessing Business Opportunities
ability to attract and retain other resources necessary for its … distillery equipment and other hard assets. In most cases … Although each of the other stages requires careful attention …