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June 24, 2024
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Call Spread
Current Defered Basis
Months of Storage
Storage … gt; Call Call Expected Basis ($0.200) A-T-M Strike $6.20 … Costs/bu.: $6.53 $4.36 $ 9.46
Basis & Cushion: $0.47 $0.64 …
September 10, 2024
2018 Farm Bill
are published on a per acre basis and will be made on 85% of …
June 30, 2016
lower costs on a per unit basis. This is
because they use … multiple combines on a regular basis can
likely negotiate a better … operation on a per-
unit basis. Because it includes the …
August 12, 2016
Breakout session presentations
the private sector was the
basis for the first revenue insurance … including ARC will have a yield basis risk between farms within … insurance doesn’t guarantee basis.
4. This is the year to have …
August 1, 2011
Dairy
per cwt of milk produced basis, returns over total costs … database were selected on the basis of their
participation in … analyzed on a per-cow or per-cwt basis. Each method has its advantages …
December 1, 2015
KFMA Newsletters
Tim Stucky‐ South Central KFMA Association
Gifts to charity – Giving grain to charity is a much more efficient tax planning tool for a cash basis farmer than writing a
check. To make this work you must transfer title of the grain to the charity. If the charity does not already have an
account, at your local coop for example, call the charity and have them open an account. Once you transfer the title of
DECEMBER …
January 1, 2013
KFMA Newsletters
billion in 2009. On a percent basis,
fuel was 4.3% of expenses … their fuel on an as needed basis.
Farmers are often better …
October 19, 2016
Grain Market Outlook
Page | 3
I. U.S. Corn Market Situation and Outlook
October 12th USDA Crop Production & WASDE Reports
On October 12th the USDA World Agricultural Outlook Board (WAOB) released its October 2016 Crop
Production and World Agricultural Supply and Demand Estimates (WASDE) reports – containing U.S. and
World corn supply‐demand and price projections for the 2014/15, “old crop” 2015/16, and “new crop”
2016/17 marketing years for corn. “New crop” MY 2016/17 for U.S. corn began on 9/1/2016 and will last
through 8/31/2017.
Information from the 2016 Acreage report released on June 30th had been used as the USDA’s 2016 U.S.
corn planted acreage forecast in the July, August, and September USDA Crop Production and USDA WASDE
reports. However, in the October 12th USDA Crop Production and WASDE reports the USDA considered crop
planted acreage numbers from the USDA Farm Service Agency (FSA) in its calculations for 2016 U.S. corn
planted acres, in turn impacting its estimates of 2016 U.S. corn harvested acres, 2016 U.S. corn production,
and the overall U.S. corn supply‐demand balance sheet for “new crop” MY 2016/17.
Also, on September 30th the USDA presented the results of its quarterly Grain Stocks report, providing
information on U.S. corn stocks held in commercial and on‐farm storage, both nationally and by state, as of
September 1, 2016. This report also provided information on U.S. total corn use during the June‐August 2016
time‐period, the last 3 months or “quarter” of the “old crop” 2015/16 marketing year, which ended on August
31, 2016. These findings impacted the USDA’s projection of U.S. corn feed and residual usage in both “old
crop” MY 2015/16 and “new crop” MY 2016/17 as reported in the October 12th USDA WASDE report.
CME DECEMBER 2016 & JULY 2017 Corn Futures Trends
DECEMBER 2016 CME Corn Futures
Following a low of $3.64 on April 1, 2016, DECEMBER 2016 Chicago Mercantile Exchange (CME) corn
futures prices trended up to a high of $4.49 on July 17, 2016 (Figure 1). Since then DEC 2016 corn futures
prices declined to lows of $3.14 ¾ on August 31st and $3.15 on September 1st. Following those late summer
lows, DEC 2016 corn futures trended higher, trading in a range from lows of $3.23 ¾ on Sept. 6th and $3.25 on
Sept. 30th to a high of $3.58 ¾ on October 14th, before closing at $3.53 ¾ on Tuesday, October 18th.
JULY 2017 CME Corn Futures
In a similar trading pattern to DEC 2016 Corn futures, since a low of $3.84 on April 1, 2016, JULY 2017 CME
corn futures prices also trended higher – up to a high of $4.56 ½ on June 15, 2016. Since then JULY 2017 corn
futures declined to lows of $3.40 ¼ on Wednesday, August 31st, and $3.40 ¾ on September 1st. Since then,
JULY 2017 corn futures have traded in a range from lows of $3.47 ½ on September 6th and $3.49 on September
30th to a high of $3.81 on October 14th, before closing at $3.76 ½ on Tuesday, October 17th.
The total futures carrying charge or “term spread” between DEC 2016 and JULY 2017 corn futures on
Monday, October 17th was $0.22 ¾ per bushel (i.e., $3.76 ½ for JULY 2017 Corn less $3.53 ¾ for DEC 2016
Corn), or $0.0325 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
Page | 4
are accounted for. Given these futures carrying charges, for storage of corn from December 2016 to July 2017
to at least break even, local corn basis levels would need to “narrow” or appreciate by $0.05 to $0.12 per
bushel to fully cover commercial storage charges over the same period.
Figure 1. DECEMBER 2016 & JULY 2017 CME Daily Corn Futures Price Charts
ne …
December 28, 2016
Grain Market Outlook
Page | 3
I. U.S. Corn Market Situation and Outlook
December 9th USDA Crop Production & WASDE Reports
On December 9th the USDA World Agricultural Outlook Board (WAOB) released its December 2016 World
Agricultural Supply and Demand Estimates (WASDE) report – containing U.S. and World corn supply‐demand
and price projections for the 2014/15, 2015/16, and “new crop” 2016/17 marketing years (MY) for corn. “New
crop” MY 2016/17 for U.S. corn began on 9/1/2016 and will last through 8/31/2017. The USDA National
Agricultural Statistical Service (NASS) also released its December Crop Production report on the same day.
However, the December NASS Crop Production report was not survey based, but instead carried forward
information from the most recent November 9, 2016 report.
Earlier, on December 1st, the USDA released their initial, preliminary tables of their Long Term Agricultural
Projections to 2026 (https://www.usda.gov/oce/commodity/projections/) – with the complete report including descriptive
text and additional analysis to be released at the 2017 Agricultural Outlook Forum in Arlington, Virginia on
February 23‐24, 2017 (https://www.usda.gov/oce/forum/). As part of these Long Term Agricultural Projections the
USDA provides the initial set of USDA supply‐demand and price forecasts for U.S. corn and other crops for
upcoming MY 2017/18 and succeeding years.
On January 12, 2017 the USDA will release a number of key reports that have potential to significantly
impact U.S. and World grain market supply‐demand balances and prices. On that date, the January 2017 NASS
Crop Production report, 2016 Annual Crop Production Summary report (NASS), the quarterly Grain Stocks
report (NASS) for December 1, 2016, the Winter Wheat & Canola Seedings report (NASS), and the January
2017 World Agricultural Supply and Demand Estimates (WASDE‐WAOB) report will all be released.
The upcoming January 12, 2017 USDA NASS Crop Production report will be survey based, and has the
potential to cause sizable changes USDA estimates of 2016 U.S. crop production. Information from the January
2017 Crop Production report will match that in the 2016 Annual Crop Production Summary report, while the
results of the quarterly Grain Stocks report will be used for calculations pertaining to the January 2017
WASDE report.
CME MARCH 2016 & DECEMBER 2017 Corn Futures Trends
MARCH 2017 CME Corn Futures
Following a low of $3.74 on April 1, 2016, MARCH 2017 Chicago Mercantile Exchange (CME) corn futures
prices trended up to a high of $4.53 ¼ on July 15, 2016 (Figure 1). Following that high, MARCH 2017 corn
futures prices declined to a low of $3.25 on August 31st. Since then, MARCH 2017 corn futures trended higher
to $3.63 ½ on October 21st, to a low of $3.41 ¾ on Dec. 1st, and to a close of $3.45 ¾ on Friday, December 23rd.
DECEMBER 2017 CME Corn Futures
In a similar trading pattern to MARCH 2017 Corn futures, since lows of $3.80 on March 3rd and $3.80 ¾ on
March 31, 2016, DECEMBER 2017 CME corn futures prices also trended higher – up to a high of $4.22 ¾ on
June 8, 2016. After that, DECEMBER 2017 corn futures declined to lows of $3.58 ½ on August 31st, and $3.65
¾ on September 30th. To the present, DECEMBER 2017 corn futures have traded in a range from highs of
Page | 4
$3.95 on October 14th, $3.95 ¼ on October 20th, $3.93 ¾ on November 8th, $3.93 on December 6th, and $3.92 ¾
on December 13th, down to lows of $3.74 ¼ on November 15th and $3.74 ½ on December 1st before closing at
$3.76 ¼ on Friday, December 23rd.
The total futures carrying charge or “term spread” between MARCH 2017 and JULY 2017 corn futures on
Friday, December 23rd was $0.14 ¼ per bushel (i.e., $3.60 for JULY 2017 Corn less $3.45 ¾ for MARCH 2017
Corn), or $0.0285 per bushel per month. This compares to commercial grain 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 commercial storage of corn from December 2016 to July 2017 to
at least break even, local corn basis levels would need to “narrow” or appreciate by $0.05 to $0.12 per bushel
to fully cover commercial storage costs over the same period. These monthly carrying charges of $0.0285 per
bushel are greater than or equal to on‐farm storage charges which are estimated to be $0.02 to $0.0250 per
bushel per month.
Figure 1. DECEMBER 2016 & JULY 2017 CME Daily Corn Futures Price Charts (as of December 23, 2016)
ne …
December 28, 2017
Grain Market Outlook
S. grain sorghum average prices to $3.30 per bushel (equal to the U.S. corn price forecast), and a
1 million acre (+17%) increase in grain sorghum planted acreage in the “next crop” 2018/19 marketing year.
B. Kansas Cash Grain Sorghum Prices
On December 26th cash grain sorghum price bids at major grain elevators in Western Kansas were in the
range of $3.08 ‐ $3.31 /bu – with basis levels $0.45 to $0.22 /b …