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December 8, 2023
Ag Law Issues
the issue. For businesses other
than those providing professional … distributed to the
member (other than guaranteed payments … million in distributions (other than guaranteed payments …
May 8, 2020
Ag Law Issues
in price manipulation and other
practices deemed unfair … fruits, and groceries and many other commodities
not related … from using
or permitting others to use their distribution …
November 1, 2009
KFMA Newsletters
at a later
date.
To meet the labor demands of farms … those
decisions through other employees; therefore
these … authority does not extend into other areas of the
operation …
April 26, 2017
Risk Management Strategies
simple formula and it is based other formulas that determined … forfeit
their wheat will have meet minimum wheat quality standards … or better, not mixed with other classes of wheat, no heat …
December 12, 2018
Grain Market Outlook
1
Monitoring the Convergence Performance of CME Soybean Futures
Joe Janzen1
(jjanzen@ksu.edu) – K‐State Department of Agricultural Economics
December 2018
In agricultural commodity markets, convergence occurs when the commodity’s futures price equals the
cash or spot price at a delivery location and delivery period specified by the commodity exchange.
Perfect convergence occurs when the basis (equal to the cash price minus futures price) equals zero.
Not long ago, wheat futures markets had convergence failures where the cash price was well below
the futures price during the delivery period. Farmers were understandably frustrated by this weakness
in basis.
Following the harvest of the 2018 soybean crop, soybean farmers face similarly poor basis. As of mid‐
November 2018, cash soybean prices in Kansas were around $1.00/bu below nearby futures and basis
was $0.10‐0.40/bu lower than previous years. While this weak basis, it is an improvement over basis
conditions seen earlier in fall 2018. Low cash prices are in large part the result of weak export demand
related to the current trade conflict with China and relatively large US soybean crop. These two factors
led the USDA to forecast US soybean ending stocks to more than double in the 2018/19 marketing year
relative to 2017/18.
Why would non‐convergence occur?
Basis non‐convergence has tended to occur when supplies are abundant and farmers, merchants, and
other commodity trading firms would rather store grain than sell. Since large supplies and abundant
stocks currently exist in the US soybean market, we should be concerned about the potential for non‐
convergence in the soybean futures market. Weak basis in non‐delivery locations like Kansas may be
driven in part by poor convergence performance at delivery locations.
As we have learned from the wheat market, non‐convergence occurs because of the incentive to hold
the commodity in the form of shipping certificates rather than physical grain. These shipping
certificates are issued as part of the futures delivery process and charge certificate holders a fixed
storage ‘premium’ as long as they are held. (In the soybean futures market, the premium is
approximately $0.05/bu/month.) These fixed storage premiums can bid up the futures price relative to
the cash price under certain conditions.
1 Joseph Janzen is an assistant professor in the Department of Agricultural Economics, Kansas State University. His research
interests include grain marketing, commodity futures markets, and agricultural finance.
Kansas State University Department Of Agricultural Economics Extension Publication …
October 7, 2024
Ag Law Issues
general, there must be a meeting of the minds as to the essence … in the fine print. A “meeting of the minds” is essential … about this publication and others, visit AgManager.info.
K-State …
October 20, 2016
Grain Market Outlook
e projected for “current” MY 2016/17. The “large crop‐over supply‐low price” situation that now
exists in World and U.S. wheat markets continues to have a strong prevailing negative influence on World
wheat prices.
However, the broader large crop‐over supply‐low price” situation in the World wheat market may be
“masking” or “obscuring” at least a couple of other important market issues. …
December 30, 2016
Grain Market Outlook
and 34.1%
ending stocks‐to‐use projected for “current” MY 2016/17. The “large crop‐over supply” situation that now
exists in World and U.S. wheat markets continues to have a strong prevailing negative influence on U.S. and
World wheat prices.
However, the broader large crop‐over supply‐low price” situation in the World wheat market may be “hiding”
at least a couple of other important market issues. …
July 26, 2018
Grain Market Outlook
18 U.S. soybean crop production prospects near
August 1st.
What is “Unknown” – The Strength of U.S. Soybean Exports Through Fall 2018: The imposition by the
Chinese government of a 25% tariff on U.S. soybean imports into their country has had a decidedly negative
impact on U.S. soybean prices over the past few weeks. However, in terms of actual shipments of U.S.
soybeans at the current time, U.S. soybean exports are still running “on pace” to meet USDA projections for
the …
September 28, 2017
KFMA Research
adequate cash on hand to meet expenses and contribute to … for farmers.
The four other strategies as outlined by … replaced before it should and other equipment might be replaced …