KSU Weekly Grain Market Analysis: “Grinding” Thru February in the U.S. on the way to Spring Planting

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:

https://www.agmanager.info/sites/default/files/pdf/KSRN_GrainOutlook_02-17-17.pdf

The recorded radio program will be aired at 10:03 a.m. central time, Friday, February 17 on the K-State Radio Network (here) – with the program available to listen to online.  After the program airs, a recording can also be listened to from the KSU AgManager.info website via a link  in the “Radio Interviews” section: http://www.agmanager.info/news/default.asp

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Grain Market Update (5th of 5 parts) – Graphics of U.S. Soybean Market Outlook

In the following charts is the fifth of five (5) blog posts illustrating parts of the “Grain Market Outlook for 2017” presentation given by Kansas State University Extension Agricultural Economist Daniel O’Brien.  The complete presentation will be available on the www.AgManager.info website provided by the Department of Agricultural Economics at Kansas State University .

This fifth of five (5) related blog posts provides information on Soybean Market Situation and Outlook.

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KSU Weekly Grain Market Analysis: Lower U.S. Winter Wheat Acres and Tighter U.S. Corn-Soybean Supply-Demand

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:

https://www.agmanager.info/sites/default/files/pdf/KSRN_GrainOutlook_01-13-17.pdf

The recorded radio program was aired at 10:03 a.m. central time, Friday, January 13th on the K-State Radio Network (KSU Agriculture Today Radio) – 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#ksrn-radio-interviews

Following are sections of the Working notes for this week’s radio program up on the KSU AgManager.info website…

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KSU Weekly Grain Market Analysis: Steady-Higher in Kansas feedgrain and wheat markets in early 2017

 

Grain market summary notes, charts and comments ahead of the KSU Agriculture Today Grain Outlook to be played on Friday, January 5, 2017 is available on the Kansas State University www.AgManager.info website at the following KSU web address:

https://www.agmanager.info/sites/default/files/pdf/KSRN_GrainOutlook_1-06-17.pdf

The recorded radio program will be aired at 10:03 a.m. central time, Friday, January 6, 2017 on the K-State Radio Network (KSU Agriculture Today Radio) – web player available.

Following are sections of the Working notes for this week’s radio program up on the KSU AgManager.info website…

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KSU Weekly Grain Market Analysis: End of 2016 Supply-Demand and Prices for U.S. Corn, Sorghum, Wheat and Soybeans

Grain market summary notes, charts and comments ahead of the KSU Agriculture Today Grain Outlook to be played on Friday, December 23rd will be available on the Kansas State University www.AgManager.info website at the following web address:

http://www.agmanager.info/news/weekly-grain-market-outook-dan-obrien

The recorded radio program will be aired at 10:03 a.m. central time, Friday, January 8th on the K-State Radio Network (here) – web player available.  Later on 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…

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Corn Market Analysis for the 2017 Kansas Corn Schools in Wichita (Jan. 9th), Oakley (Jan. 11th) and Olathe (Jan. 13th)

Following is a summary of corn market analysis and outlook information from Kansas State University to be presented at a series of Kansas Corn Schools in January 2017.  Locations are Wichita (South Central KS) on Monday, January 9th, Oakley (Northwest KS) on Wednesday, January 11th, and Olathe (East Central KS) on Friday, January 13th.  More information on how to register for these meetings please visist the following web location:

http://kscorn.com/2016/11/cornschool/

Corn Market Risk Management in 2017

Daniel O’Brien, Extension Agricultural Economist – Kansas State University

A. U.S. and World Corn Supply-Demand & Price Situation.

After producing the four largest U.S. corn crops on record over the 2013-2016 period following the drought of 2012, U.S. corn ending stocks of 2.403 billion bushels in the “new crop” 2016/17 marketing year have risen to a 29-year high, while percent ending stocks-to-use of 16.56 percent have risen to an 11-year high. In this “large supply – low price,” “buyer’s market,” the USDA has projected U.S. average corn prices in market year 2016/17 in the $3.05 to $3.65 range — down for four consecutive years from a record high of $6.89 per bushel in drought-stricken market year 2012/13 to the lowest level since $3.04 per bushel in market year 2006/07. Foreign coarse grain supplies and ending stocks also have reached record high levels in marketing year 2016/17 — up to 1,118 million metric tons — further exacerbating the “large crop – low price” scenario that currently exists in the U.S. and world corn market.

B. 2017 Corn Market Expectations and Contingencies.

Lower U.S. corn prices are likely to prevail through the winter months until at least mid-spring to early summer 2017 unless unexpected and substantial crop production problems occur in other major coarse grain production regions of the world, such as Argentina, Brazil, China, or the Ukraine. It is also possible that the anticipated change in world weather patterns to a La Nina condition could have a negative impact on 2016 South American (particularly in Argentina and southern Brazil) and U.S. corn production in the western Corn Belt. However, tangible evidence of such a crop production impacts will not be available until February-April 2017 in Argentina and Brazil, and later in the summer months in the United States. Also, financial market volatility, trends in the value of the U.S. dollar relative to other world currencies, and other economic factors may affect the U.S. corn market and other agricultural and energy commodity prices in coming months. However, absent any of these surprises to the U.S. and Kansas corn market, in-state corn prices will likely follow the average normal seasonal price pattern of the last 15 years, with harvest lows followed by seasonal increases through spring-early summer 2017, with weather-based market volatility likely to influence U.S. corn prices through the mid-to-later summer months.

C. Kansas Irrigated & Non-Irrigated Corn Cost of Production

Kansas cash corn prices of $2.87 to $3.36 per bushel in mid-December 2016 at major grain markets throughout the state are substantially below Kansas State University estimates of average cost of production from Kansas Farm Management Association enterprise records for the 2009-2015 period. Kansas State University estimates of statewide average irrigated corn cost of production were $4.00 per bushel in 2015, and $4.47 per bushel on average over the 2010-2014 period. For non-irrigated corn, Kansas State University estimates of statewide average cost of production were $4.36 per bushel in 2015 (with much larger than normal yields) and $5.70 per bushel on average over the 2010-2014 period.

D. What signals about 2017 are the CME corn futures markets providing?

As of December 16, 2016, the structure of futures contract prices over the remainder of the 2016/17 marketing year (i.e., through August 31, 2017) provides little or no incentive for commercial storage of grain and is near neutral at best for on-farm storage. On December 16, 2016 CME MARCH 2016 corn futures closed trade at $3.56 ½ per bushel, followed by MAY 2017 CME corn at $3.63 ¼, JULY 2017 CME corn at $3.70 ¾, and SEPTEMBER 2017 CME corn at 3.77 ½ per bushel.  Per month futures carrying charges for MARCH-MAY were $0.03375 per bushel, $0.0375 per bushel per month for MAY-JULY, and $0.03375 per bushel for JULY-SEPTEMBER.

If commercial storage costs before interest are commonly $0.04 per bushel per month, then mid- December 2016 CME corn futures carrying charges offer no incentive for storing grain — other than the possibility that local cash basis levels may narrow or strengthen enough to make storage possible. If on-farm storage cost is approximately $0.02-$0.02 ½ per bushel, then on-farm storage (before cost of interest) appears to be a “break-even” to slightly profitable marketing strategy absent any rally in corn futures or narrowing of basis in spring-early summer 2017.

E. Signals from New Crop 2017 DEC Corn & NOW Soybean futures

Concerning new crop 2016 acreage prospects for corn and other major competitive crops, on December 18, 2016 CME NOV 2017 soybean futures closed at $10.16 ¼ and CME DEC 2017 corn futures at $3.86 with a ratio of 2.63.   Over time this ratio of soybean to corn prices would be considered to be “favoring soybeans” (i.e., being markedly larger than the customary 2.2 to 2.3 break-even level) —favoring soybeans over corn from an expected profitability standpoint. That said, it is likely that prospects for the South American soybean crop during March-April 2017 will affect both old crop and new crop soybean and corn futures prices in the United States at that time, and could lead to significant changes in relative 2017 prices and expected profits between U.S. corn and soybeans, and ultimately affect U.S. farmers’ 2017 planted acreage decisions.

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KSU Weekly Grain Market Analysis: Results of the 12/9/2016 WASDE Report, and looking to March-June of Next Year

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:

http://www.agmanager.info/sites/default/files/pdf/KSRN_GrainOutlook_12-16-16.pdf

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…

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