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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 …
August 1, 2022
2022 Risk and Profit Conference Recordings
Associate Professor
2022 KSU Risk andProfit Conference
Alumni Center … Protection
https://agmanager.info/events/risk-and-profit-conference/previous-
conferen … conference-proceedings/2017-risk-and-profit-conference/14
https://www.marginprotection.com/
What …
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 …
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 …
October 9, 2023
Prices and Price Forecasts
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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 …
August 9, 2024
Prices and Price Forecasts
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. 2025 looks to be a challenging …
February 23, 2012
Reduced farmer-feeders (2010 vs 2009)
– 50,000 hd yards; increased … 1994 1997 2000 2003 2006 2009 2012
Mil. Head
C-N-30
01/29/12Livestock … 1994 1997 2000 2003 2006 2009 2012
Mil. Head
C-N-38
01/29/12
+1.4 …
August 1, 2021
General Sessions
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