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April 3, 2018
Grain Market Outlook
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I. USDA Reports, Corn Futures, Seasonal Prices & U.S. Dollar
I‐a. March 8th USDA Crop Production & WASDE Reports
On February 23rd the USDA Office of the Chief Economist (OCE) released its projections of U.S. Grain and
Oilseeds Outlook for “new crop” MY 2018/19 at the 94th annual Agricultural Outlook Forum in Arlington,
Virginia. The “new crop” 2018/19 marketing year for U.S. corn will begin on September 1, 2018 and will last
through August 31, 2019. The next USDA U.S. soybean production and supply‐demand estimates for the “new
crop” 2018/19 marketing year will be released in the May 10th USDA WASDE report, and will be based on
USDA Economic Research Service (ERS) projections from the March 29th USDA Prospective Plantings Report
acreage report, using historic harvested‐to‐planted acreage relationships, and a selected 2018 trend yield.
On March 8th the USDA World Agricultural Outlook Board (WAOB) released its March 2018 World
Agricultural Supply and Demand Estimates (WASDE) report – containing U.S. and World soybean supply‐
demand and price projections for the 2015/16, 2016/17, and “old crop” 2017/18 marketing years (MY). “Old
crop” MY 2017/18 for U.S. corn began on September 1, 2017 and will last through August 31, 2018.
On March 29th the USDA National Agricultural Statistics Service (NASS) released its Prospective Plantings
and Grain Stocks reports. Both the Prospective Plantings report and on‐farm portion of the Grain Stocks
report are defined by NASS as “probability surveys” that were conducted during the first two weeks in March.
This combined survey included approximately 82,900 farm operators as a representative sample of U.S. farm
producers. Data from farm operators was collected by “mail, internet, telephone, or personal interview.”
The off‐farm portion of the March 29th Grain Stocks survey was an effort to have a complete enumeration
or “counting” of all 8,500 known commercial grain storage facilities – totaling approximately 11.2 billion
bushels in commercial grain storage capacity. Reports were received from about 90% of these facilities by the
USDA, with estimates made for the remaining 10% who had not responded to the survey.
The first USDA National Agricultural Statistics Service (NASS) estimate of 2018 U.S. soybean production
based on actual farmer surveys and in‐field corn plot measurements will be presented in the August 10, 2018
USDA NASS Crop Production report. This will be followed by similar reports in the September, October, and
November, and the final summary report for 2018 to be released in January 2019.
I‐b. CME MAY & DECEMBER 2018 Corn Futures Trends
MAY 2018 CME Corn Futures
Following a high of $4.30 on July 11, 2017, MAY 2018 Chicago Mercantile Exchange (CME) corn futures
prices trended downward through late summer, fall, and mid‐winter to a low of $3.53 ¾ on January 12, 2018
(Figure 1). After that MAY 2018 corn futures prices first trended higher then lower again, first being up to a
high or $3.95 ¼ on March 13, 2017, before declining to a low of $3.77 ¼ on March 23rd and closing at $3.73 ½
on March 28th. Then following the USDA Reports released the morning of March 29th, MAY 2018 CME corn
futures traded as high as $3.89 ¼ that same day, and up to $3.92 ½ on April 2nd before closing at $3.87 ¼ that
same day.
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DECEMBER 2018 CME Corn Futures
DECEMBER 2018 corn futures have followed a similar trading pattern to MAY 2018 corn futures. Following
highs of $4.29 ½ on July 11, 2017 and $4.28 on July 20th, DEC 2018 Chicago Mercantile Exchange (CME) corn
futures prices trended downward through late summer, fall, and into winter to lows of $3.79 ¼ on December
17‐18, 2017, $3.79 ¾ on January 12, 2018 (Figure 1). After that DEC 2018 corn futures prices first trended
higher then lower again, first being up to a high of $4.12 on March 14, 2018, before declining to a low of $3.91
½ on March 23rd and closing at $3.97 on March 28th. Then following the USDA Reports released the morning
of March 29th, DEC 2018 CME corn futures traded as high as $4.11 ¾ that same day, and up to $4.16 on April
2nd before closing at $4.11 ¼ that same day.
CME Corn Futures MAY 2018 – SEPT 2018 Contract Spreads
The total futures carrying charge or “term spread” between MAY 2018 and SEPT 2018 corn futures on
Monday, April 2nd was $0.15 ½ per bushel (i.e., $4.02 ¾ for SEPT 2018 Corn less $3.87 ¼ for MAY 2018 Corn),
or $0.03875 per bu. per month over 4 months. This compares to commercial grain storage charges in Kansas in
the range of $0.04 to $0.05 per bushel per month – and some as high as $0.06 per bushel per month in
adjoining states – before accounting for interest, additional handling costs, or other discounts.
Figure 1. MAY & DECEMBER 2018 CME Daily Corn Futures Price Charts (as of April 2, 2018) …
July 1, 2012
Land Buying and Valuing
Department of Agricultural Economics
Kansas State University …
July 26, 2012
Agribusiness Papers
Department of Agricultural Economics
Kansas State University …
March 1, 2004
Assessing Business Opportunities
Department of Agricultural Economics, Kansas State University …
December 1, 2003
Assessing Business Opportunities
EconomicsDepartment of Agricultural Economics
Kansas State UniversityKansas …
November 1, 2012
Cattle Finishing Returns
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October 1, 2012
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15 …
February 5, 2009
Energy
Partial Budget Approach to
Economic DecisionsEconomic Decisions:
BenefitsBenefits … for
KK--State Agricultural Economics ExtensionState AgriculturalEconomics Extension
www.AgManager.info …
September 1, 2005
LRP Insurance
Department of Agricultural Economics
Kansas State University
www.agmanager.info/livestock/marketing
jmintert@ksu.edu
LRP-What …
September 1, 2005
LRP Insurance
Agricultural and Resource Economics, 29(2,2004):228-241
4
Objectives
• …