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July 19, 2017
Grain Market Outlook
n MY 2007/08 compares to the most recent USDA projections of 260.6 mmt ending stocks and 35.4%
ending stocks‐to‐use projected for “new crop” MY 2017/18. The present “large crop‐over supply” situation in
World and U.S. wheat markets continues to have a prevailing limiting influence on U.S. and World wheat prices
– even with recent drought‐fueled moves higher in the market.
Wheat Protein Supply Concerns & the “World Less China” Market Situation
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The broader “large crop‐over supply‐low price” situation in the World wheat market may be “obscuring” at
least a couple of other important market issues.
First, while the quantity of wheat available in the World is plentiful, the available supply of high protein milling
wheat is typically less so. This factor helps exports of U.S. Hard Red Spring (HRS) wheat (higher protein – good
quality) relative to World wheat export competitors. The drought conditions now occurring in the U.S. and
Canadian hard red spring wheat producing regions has raised the demand and price premiums offered for high
protein wheat supplies – whether they are from hard red winter wheat supplies or elsewhere.
Second, while the aggregate supply of wheat in World markets has grown, the supply of wheat from a “World
Less China” perspective is projected to have actually “contracted” or “diminished” further in “new crop” MY
2017/18. “World Less China” wheat percent stocks‐to‐use have declined to the tightest level since at least MY
2008/09 when U.S. wheat cash prices averaged $5.70 /bu. If this “China supply isolation factor” eventually
leads to noticeably tighter global supplies of available‐exportable wheat in coming months, then it will likely
have a significant positive impact U.S. wheat market prices in “new crop” MY 2017/18.
However, unless there is this change in the broader, overriding focus of the World wheat market away from
aggregate global supplies to available “World Less China” supplies – it is likely that significant World wheat
production problems and/or trade disruptions would need to occur in year 2017 in order to have wheat prices
recover significantly in later 2017. Such disruptions elsewhere would likely cause the market to then focus on
the limited availability of food quality wheat outside of China in the World market. Also, ongoing strength in
the U.S. dollar exchange rate continues to be a negative factor limiting the competitive affordability of U.S.
wheat exports in World markets.
USDA U.S. Wheat Supply/Demand Forecast for “New Crop” MY 2017/18
The USDA released their wheat production, supply‐demand and price projections for “new crop” MY 2017/18
in the July 12th Crop Production & World Agricultural Supply and Demand Estimates (WASDE) reports.
United States’ wheat plantings are projected to be 46.567 million acres (ma) – down from 50.154 ma in “old
crop” MY 2016/17 to the lowest level since the early 1900s. Harvested acres are forecast to be 38.115 ma
(83.72% harvested‐to‐planted) – down from 43.890 ma a year ago. The 2017 U.S. average wheat yield is
projected at 46.2 bu/ac, down from the 2016 record of 52.6 bu/acre.
Wheat production in the U.S. in 2017 is forecast to be 1.760 billion bushels (bb), down from 2.310 bb in 2015.
Projected “new crop” MY 2017/18 total supplies are 3.084 bb (down from 3.403 bb in “old crop” MY 2016/17),
with total use of 2.146 bb (down from 2.219 bb in “old crop” MY 2016/17).
The USDA projected “new crop” MY 2017/18 ending stocks to be 938 million bushels (mb) (vs 1.184 bb a year
ago), with percent ending stocks‐to‐use of 43.7% S/U (vs 53.4% last year and 50.0% the previous year). United
States’ wheat prices are projected to average $4.80 /bu – up from $3.89 in “old crop” MY 2016/17, but down
from $4.89 /bu in MY 2015/16, and $5.99 /bu in MY 2014/15. It is estimated by Kansas State University that
these USDA projections for “new crop” MY 2016/17 have a 50% probability of occurring.
Three Alternative KSU U.S. Wheat S/D Forecast for “New Crop” MY 2017/18
To represent possible alternative outcomes from the USDA’s July 12th projection, three potential KSU‐
Scenarios for U.S. wheat supply‐demand and prices are presented for “new crop” MY 2017/18.
Page | 3
KSU Scenario 1) “5 Year Avg Yield” Scenario (20% probability) assumes for “new crop” MY 2017/18 that the
following occurs. This scenario assumes that there will be 46.657 ma planted, 83.72% harvested‐to‐planted,
38.115 ma harvested, 45.8 bu/ac 5‐year average yield, 1.746 bb production, 3.030 bb total supplies, 975 mb
exports, 150 mb feed & residual use, 2.146 bb total use, 884 mb ending stocks, 41.19% S/U, & $5.05 /bu U.S.
wheat average price.
KSU Scenario 2) “Higher U.S. Wheat Exports” Scenario (20% probability) assumes the following for “new
crop” MY 2017/18. Planted acres of 46.657 ma are associated with 38.115 ma harvested, 45.8 bu/ac 5‐year
average yield, 1.746 bb production, 3.030 bb total supplies, 1.200 bb exports (due to foreign crop problems),
125 mb feed & residual use, 2.346 bb total use, 684 mb ending stocks, 29.16% S/U, & $6.00 /bu U.S. wheat
average price;
KSU Scenario 3) “Short U.S. Wheat Crop” Scenario (10% probability) assumes the following for “new crop” MY
2017/18. Planted acres of 46.657 ma, 83.72% harvested‐to‐planted, 38.115 ma harvested, 40.2 bu/ac low
“crop stress” yield, 1.633 bb production, 2.917 bb total supplies, 975 mb exports, 125 mb feed & residual use,
2.121 bb total use, 796 mb ending stocks, 37.53% S/U, & $5.35 /bu U.S. wheat average price.
…
Breakout Sessions
stores provide g y p
social meeting spaces3
es in rural America
mportant … would h
and efforts with others will bring about s
Grocery … Support
Low Sales
Volume
Meeting
Minimum Buying
Requirement
Search …
August 1, 2017
Breakout Sessions
the
daily work routine, other issues could and will change … pertain to land ownership, but other issues would involve the … These materials are designed solely to raise issues and serve as a guideline for the reader’s research. These materials are presented for the purpose of education. Every taxpayer has a distinct set of facts and circumstances that makes it impossible to give solutions other than a general guideline approach.
• …
January 1, 2005
Land Rental
Rates, Leasing Papers
and Presentations, Land Leasing
Forms
lease types have developed to meet the
needs of the modern … for the use of land. For other
farm operations, a crop-share … oral arrangements, while
others are complex, lengthy written …
February 10, 2022
Water Policy
cannot be valued. On the
other hand, when water is abundant … these valuation estimates and other
considerations that were … enough from a single well to meet the full irrigation water …
December 27, 2017
Grain Market Outlook
Page | 4
I. U.S. Wheat Market Situation & Outlook
December 12th USDA Crop Production & WASDE Reports
On December 12th the USDA World Agricultural Outlook Board (WAOB) released its December 2017
World Agricultural Supply and Demand Estimates (WASDE) report – containing U.S. and World wheat supply‐
demand and price projections for the 2015/16, “old crop” 2015/16, and “new crop” 2017/18 marketing years
(MY) for wheat. “New crop” MY 2017/18 for U.S. wheat began on September 1, 2017 and will last through
August 31, 2018.
On November 28, 2017 the USDA released its preliminary Long Term Agricultural Projections of grain
market supply‐demand and prices through year 2027. These included the USDA forecasts for U.S. Wheat
supply‐demand and prices for “next crop” 2018/19 and succeeding years. These Long Term Agricultural
Projections by the USDA will be updated at the February 2018 USDA Outlook Conference, and are available at
the following web address: https://www.usda.gov/oce/commodity/projections/.
On January 12, 2018, the USDA will release its Annual Crop Production Summary and Crop Production
reports, providing updated estimates for 2017 total production of U.S. wheat and other U.S. crops. On that
same day the USDA will also release its quarterly Grain Stocks, annual Winter Wheat & Canola Seedings, and
updated World Agricultural Supply and Demand Estimates (WASDE) reports.
CME Kansas Hard Red Winter Wheat DEC 2017 & JULY 2018 Futures
MARCH 2018 CME Kansas Hard Red Winter (HRW) Wheat futures declined from highs of $6.06 and $6.04
¼ per bushel on July 6th and 11th, 2017 down to a low of $4.38 ¼ on August 29th. After trending up to a high of
$4.77 ½ on September 27th, MARCH 2018 HRW Wheat futures trended steadily lower of $4.10 ½ ‐ $4.10 ¾ on
December 11‐12, 2017, before trending back up to a high $4.25 ½ on December 21st. MARCH 2018 HRW
Wheat futures closed at $4.22 ¼ on Friday, December 22nd (Figure 1).
Figure 1. MARCH 2018 & JULY 2018 CME Kansas Wheat Futures Daily Price Charts …
August 18, 2014
Risk Management Strategies
implied by the author or any other party. Each farmer must … Kansas that are expected to meet the 50% county yield loss … is expected it will also meet the 50% test in
2014 (drought …
March 1, 2009
Animal Well-Being
Pork Industry Information Meetings
March 23-26, 2009
OverviewOverview
… unseensite unseen’’ meat from other countries be meat fromother countries be
accepted if … production costs accelerate???
Other Critical PointsOther Critical …
May 24, 2011
Leasing Papers
and Presentations
What percentage of the crop should I receive in a crop share lease?
The percentage of the crop that the landowner and tenant receive under a crop
share lease is based on the principle that crop returns are shared in the same
proportion as crop resources contributed. In other words, the percentage of the
crop received is determined by the percentage of crop inputs that the landowner
and tenant each provide in growing the crop(s). These percentages can be
determined by building a budget for each crop grown on the land and then
identifying who provides that input (landowner, tenant, or shared). The KSU‐
Lease.xls spreadsheet is a useful tool in determining equitable crop share
arrangements. Survey information on typical irrigated and non‐irrigated crop‐share
lease arrangements in Kansas is also available on www.AgManager.info.
3 …
September 3, 2017
Section 5: Long-Range Planning (FINLRB)
May have some adjustments due to additional investment
to improve the asset, partial sale, other activity
– Inherited capital assets have initial basis equal to the
value at date of inheritance in most instances
(“stepped up” tax basis)
– … Generally ordinary gain if held less than 24 months (cattle
and horses – 12 months all other livestock)
• If held 24 months or more …