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August 24, 2020
Ag Law Issues
on an exotic game
ranch meets the definition as agricultural … goats, fur-bearing animals and other mammals. It does not include … turkeys, geese, pigeons, other birds, fish, frogs, reptiles …
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 …
December 26, 2023
Ag Law Issues
is made.
Soil, sod and other minerals. Report the sale … the sale of soil, sod and other minerals on a regular basis … “Sufficient” Fence?
If your fence meets the state law requirements …
February 1, 2012
KFMA Newsletters
strength. A farm can outperform other
operations only if it can … resources that are difficult for
other farms to obtain is critical … opportunities? I have
yet to meet a farmer that could not answer …
November 1, 2010
KFMA Newsletters
little
relationship to each other.
Table 1 presents correlation … non-
irrigated farms. Benchmarks for other farm
types can be found … often discussed at
extension meetings and is evident by examining …
May 20, 2013
Risk Management Strategies
implied
by the author or any other party. Each farmer must … non-irrigated corn was $398.31. The other selected Kansas crops also … least some
payment for the other two crops. The odds of a …
March 18, 2024
Ag Law Issues
There are analogies with other similar activities. Consider … training of horses
owned by others does not generate gross income … training horses owned by others and for a flat fee. The …
December 1, 2011
KFMA Newsletters
or purchase more feed from other farms
and ranches? Also … for world agriculture to meet world
food needs in the … in parts of the world. To meet food needs
over the next …
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 …
December 1, 2003
Leasing Papers
and Presentations
is not as large as in many other farming
endeavors. There … providing enough income to meet the goals (or needs) of all … of size considerations), meeting income needs or
goals is …