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September 15, 2021
Fed Cattle Pricing
DISCOVERY, DIVERGENT INCENTIVES, RISK MANAGEMENT,
AND FUTURE … well-informed trade; better manage
risk; and inform policy and regulatory … Marketing Cost, Flexibility, & Risk Management; 3)
Market Information …
April 19, 2017
Grain Market Outlook
DECEMBER (DEC) 2017 CME Kansas hard red winter wheat futures traded as high as $5.90 ¼ on
April 20, 2016, and $5.90 on June 8, 2016 before declining approximately $0.90 per bushel by early
July. Then, following lows of $4.74 per bushel on August 31st, $4.72 ½ on October 12th, and $4.59 ½
DEC 2017 CME KS HRW Wheat Futures
February 18, 2016 – April 18, 2017
Close = $4.74 ¼ on 4/18/2017
MAY 2017 CME KS HRW Wheat Futures
February 18, 2016 – April 18, 2017
Close = $4.19 ¼ on 4/18/2017
Page | 4
on December 1, 2016, DEC 2017 CME Kansas hard red winter wheat futures prices traded up to a high
of $5.30 ¾ on February 16, 2017. From that February 16th high, DEC 2017 CME KS HRW Wheat
futures then traded lower – down to a low of $4.68 ½ on March 31st and $4.69 on April 18th before
closing at $4.74 ¼ that same day (Figure 1).
The total futures carrying charge or “term spread” between MAY 2017 and JULY 2017 CME Kansas Wheat
futures contracts on Tuesday, April 18th was $0.12 ¾ per bushel (i.e., $4.32 for JULY 2017 less $4.19 ¼ for MAY
2017 Wheat), or $0.06375 per bushel per month. This compares to commercial storage charges in Kansas grain
elevators in the range of $0.04 to $0.05 per bushel per month – before interest or additional handling costs or
other discounts are accounted for.
Given these futures carrying charges, commercial storage of wheat from MAY 2017 to JULY 2017 would at
least break even and/or cover costs (i.e., carry of $0.06375 /bu/mo is greater than $0.04‐$0.05 /bu/mo storage
cost) IF local cash wheat basis levels would at least stay unchanged and not weaken further over the May‐July
2017 period. Along this same lines of reasoning, it may be profitable to actually place a stor …
January 11, 2021
Feeder Cattle Pricing
managing feeder cattle price risk is to hedge the transaction … vice versa, subject to basis risk. This practice reduces uncertainty … it can lead to lower net profits at times relative to
an …
February 20, 2020
information:
https://www.asi.k-state.edu/events/stocker-
conference.html
https://www.youtube.com/watch?v=DpTyq3SuZn
8&list=PLst4YxRiGX9RSG0UO4WcavXCkwJmQz7Iw
&index=2&t=0s
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Mil. Head
HEIFERS …
February 21, 2020
information:
https://www.asi.k-state.edu/events/stocker-
conference.html
https://www.youtube.com/watch?v=DpTyq3SuZn
8&list=PLst4YxRiGX9RSG0UO4WcavXCkwJmQz7Iw
&index=2&t=0s
60
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100
110
120
130
140
0 … 1996 1999 2002 2005 2008 2011 2014 2017 2020
Mil. Head
HEIFERS …
May 22, 2017
Grain Market Outlook
DEC 2017 CME KS HRW Wheat Futures
March 21, 2016 – May 19, 2017
Close = $4.80 ¼ on 5/19/2017
JULY 2017 CME KS HRW Wheat Futures
March 21, 2016 – May 19, 2017
Close = $4.38 on 5/19/2017
Page | 4
DECEMBER (DEC) 2017 CME Kansas hard red winter wheat futures traded as high as $5.90 ¼ on
April 20, 2016, and $5.90 on June 8, 2016. Then DEC 2017 HRW wheat futures declined to lows of
$4.74 per bushel on August 31st, $4.72 ½ on October 12th, and $4.59 ½ on December 1, 2016. DEC
2017 CME Kansas hard red winter wheat futures then traded up to a high of $5.30 ¾ on February 16,
2017. From that February 16th high, DEC 2017 CME KS HRW Wheat futures then traded lower –
down to a low of $4.67 on April 25th before rising to $5.09 on May 2nd before closing at $4.80 ¼ on
Friday, May 19th (Figure 1).
The total futures carrying charge or “term spread” between JULY 2017 and DEC 2017 CME Kansas Wheat
futures contracts on Friday, May 19th was $0.42 ¼ per bushel (i.e., $4.80 ¼ for DEC 2017 less $4.38 for JULY
2017 Wheat), or $0.07042 per bushel per month. This compares to commercial storage charges in Kansas grain
elevators in the range of $0.04 to $0.05 per bushel per month – before interest or additional handling costs or
other discounts are accounted for.
Given these futures carrying charges, commercial storage of wheat from JULY 2017 to DEC 2017 would at
least break even and/or cover costs (i.e., carry of $0.07042 /bu/mo is greater than $0.04‐$0.05 /bu/mo storage
cost) IF local cash wheat basis levels would at least stay unchanged and not weaken further over the May‐July
2017 period. Along this same lines of reasoning, it may be profitable to actually place a stor …
January 1, 2011
Land Leasing
Forms
provided by the North Central Risk Management Education
Center … 2010-
49200-06200
NCFMEC-03
December 2011
©2011 by the North Central Farm … would shift some of the risk, and the
probability of …
January 1, 2013
Land Leasing
Forms
provided by the North Central Risk Management Education
Center … http://AgLease101.org
Managing risk is required for many farm … many farm enterprises to be profitable and sustainable.
Leasing …
October 20, 2016
Grain Market Outlook
The total futures carrying charge or “term spread” between DEC 2016 and JULY 2017 CME Kansas Wheat
futures contracts on Wednesday, October 19th was $0.39 ½ per bushel (i.e., $4.64 ¾ for JULY 2017 less $4.25 ¼
for DEC 2016 Corn), or $0.06643 per bushel per month. This compares to storage charges in Kansas grain
elevators in the range of $0.04 to $0.05 per bushel per month – before interest or additional handling costs or
other discounts are accounted for.
Given these futures carrying charges, for storage of wheat from December 2016 to July 2017 to at least
break even, local wheat basis levels would need to at least stay level or unchanged from current levels to fully
cover commercial storage charges over the same period. Also, it would be prudent to actually place a storage
hedge on the CME Kansas July 2017 futures contract if a person were actually holding wheat for sale that long.
Otherwise the possibility of seasonal harvest price weakness in June of 2017 could put these projected storage
profits at risk.
Kansas Wheat Seas …
August 1, 2018
General Sessions
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 …