One of the factors causing U.S. grain prices to stay at their current moderate-to-low levels is the total quantity of U.S. corn, grain sorghum, wheat and soybeans available relative to commercial off-farm storage capacity. This “strain” on storage capacity can be described as a “high demand for grain storage space.” The net result of strong demand for limited U.S. grain storage capacity is a high real cost of storage – a factor that is influencing the U.S. hard red winter wheat market located in the central and southern plains states (Kansas, Oklahoma, Texas, Colorado, etc.).
The following slides are meant to illustrate this “oversupply relative to grain storage” situation as it exists in the U.S. and in the state of Kansas in the 2016/17 marketing year. In summary, large crop supplies relative to available storage capacity characterize the U.S. grain storage and handling industry at this point in time. Looking into the future the remedy for this current situation will come from either reduced grain supplies or increased grain usage. The quickest remedy would seem be some sort of short crop/short supply situation in the U.S. in the coming months of year 2017. Although it would be a surprise to the market, some combination of foreign crop production problems and increased U.S. grain export demand would also help to alleviate the current oversupply situation.
So, the grain market waits to see whether some combination of these supply – demand factors may reduce supplies relative available to grain storage capacity. It is not too much of a “stretch” to say that we should know the answer to that question by August-September 2017!
This presentation focuses on the key factors that have been “driving” or influencing grain markets over the last 15-25 years. The full presentation will be available on the KSU Agricultural Economics website at the following web location:
Grain market summary notes, charts and comments ahead of the KSU Agriculture Today Grain Outlook to played on Friday, February 17, 2017 are available on the Kansas State University www.AgManager.info website at the following web address:
Grain market summary notes, charts and comments supporting the KSU Agriculture Today Grain Outlook to be played on Friday, January 13th is available on the Kansas State University www.AgManager.info website at the following KSU web address:
Grain market summary notes, charts and comments ahead of the KSU Agriculture Today Grain Outlook to be played on Friday, December 16, 2016 will be placed up on the Kansas State University www.AgManager.info website at the following web address:
The recorded radio program will be aired at 10:03 a.m. central time, Friday, December 16, 2016 on the K-State Radio Network (here) – web player available. Later today the program can also be listened to via a link from the following website in the “Radio Interviews” section: http://www.agmanager.info/news/default.asp
Following are sections of the Working notes for this week’s radio program up on the KSU AgManager.info website…