FUTURES TRADERS GUIDE TO THE WASDE

Size: px
Start display at page:

Download "FUTURES TRADERS GUIDE TO THE WASDE"

Transcription

1 FUTURES TRADERS GUIDE TO THE WASDE Your Guide To Understanding The USDA World Agriculture Supply & Demand Estimates For Corn, Soybeans And Wheat By Craig & Drew Daniels

2 What Is The WASDE? The World Agricultural Supply and Demand Estimates (WASDE) report provides the USDA s comprehensive forecasts of supply and demand for crops (US and global) and livestock (US only). The report gathers information from a number of statistical reports published by USDA and other government agencies, and provides a framework for additional USDA reports. The USDA s home page for the WASDE may be found here: As you read through this guide, you may want to have a copy of the WASDE report handy. When you click on the above link, you will be able to download the latest version of the WASDE or access one of the archived reports. You may also access the most current WASDE report via this web link: What Markets Does The WASDE Cover? The World Agricultural Supply and Demand Estimates (WASDE) report is prepared monthly and includes forecasts for U.S. and world wheat, rice, and coarse grains (corn, barley, sorghum, and oats), oilseeds (soybeans, rapeseed, palm), and cotton. U.S. coverage is extended to sugar, meat, poultry, eggs, and milk. While the WASDE covers many different crops and livestock, there are three markets that garner significant attention when the reports are released. Corn, Wheat and the Soybean are the three reports that the futures markets greatly anticipate. Out of the total 325 million acres of available US farmland, Corn, Soybeans and Wheat make up about 70% of all harvested acres. What Is The Highlights Report? The Highlights Report is in the first few pages of the WASDE. It is a summary report of the detailed balance sheets that follow the Highlights Report. The report explains the findings and changes the USDA observes. In essence, the Highlight Report provides the color for the Balance Sheets. What Exactly Are The Balance Sheets? The WASDE reports a full balance sheet for each commodity. Separate estimates are made for components of supply (beginning stocks, imports, and production) and demand (domestic use, exports, and ending stocks). Domestic is then subdivided into major categories, like corn for feed and corn for ethanol. 2

3 The WASDE also reports forecast season-average farm prices for most items. Prices tie together both sides of the balance sheet. Market prices aid in rationing available supplies among competing uses. Prices also indicate potential supply responses, which include potential planting decisions for the upcoming year. The process of forecasting price and balance sheet items is complex and involves the interaction of expert judgment, commodity models, and in-depth research by USDA analysts on key domestic and international issues. Corn Balance Sheet In the bottom half on page 12 of the WASDE report you should find the US Corn Balance Sheet. For your convenience, we have reprinted the Corn Balance sheet from the July 2012 WASDE below. Understanding the WASDE report boils down to understanding the Balance Sheets. If you can master this section, you will be able to have full control over the WASDE report. The objective of the Balance Sheet is to determine Supply and Demand. First take a look at five columns of the table below. The 1st column on the left defines the data sets we will be evaluating. They include Area Planted, Area Harvested, Yield per Acre, and Production on the Supply Side, and data sets like Feed & Residual and Exports on the Demand Side. The other four columns to the right are for different crop years. There are four columns for three years of data. The first crop year we see is from two years ago, the 2010/2011. The next crop year is old crop, which is the 2011/2012 crop year. The last two columns (the 4th and 5th columns) are for new crop corn 2012/2013. The 4th column shows the numbers reported in the prior months WASDE. The 5th and last column shows the numbers reported for this months (current) WASDE. This report comes from the July 2012 WASDE. So the 4th column shows the numbers reports on the June 2012 and the 5th column is for July Now that we know what years and crops the WASDE covers, we need to get into the how the tables are organized and what data it holds. The top section of the report is all about the Supply Side and the second half is the Demand Side. Supply Side: The most important metric for the Supply Side is Production. Production is the amount of corn we grow in a given year. To find this out take the Area Harvested and multiply it by the Yield per Harvested Acres. Production = Area Harvested X Yield per Harvested Acre If we look at corn below (2nd column), we see the Area Harvested is 81.4 Million Acres and the yield is X 81.4 Million Acres is how the USDA gets the Production in the 4th row of the table. 3

4 Beginning Stocks for the current year are the same number as the Ending Stocks from the year before. For the 2010/2011 year (2 crops ago) this number will not change. However, for new crop, the Beginning Stocks are still not known, it can only be estimated. We are still using old crop corn for sales this year. That means as the Ending Stocks estimates change for old crop, they are also changing for Beginning Stocks for the new crop. Beginning Stocks = Last Year s Ending Stocks The Total Supply for each year is going to be the sum total of the Beginning Stocks (last year s ending stocks), Production (this years Harvested Acres X Yield), and Imports, which is corn that the US imports from other countries. The sum of these three inputs represents the total supply of corn in the US for any given year. Total Supply = Beginning Stocks + Production + Imports Demand Side: Now that we know the Total Supply, we need to also understand the Demand side, which is also known as Total Use. To find the Total Use we need to know the Feed and Residual, Food, Seed & Industrial, and Exports. Domestic Use is the sum of Feed & Residual and Food, Seed and Industrial (FS&I). You DO NOT add back the Ethanol usage. Ethanol is already included in FS&I. Feed & Residual mainly comprises of the corn used for Livestock feed. FS&I represent the corn we use for food, seed for the next crop, and ethanol. Domestic Use = Feed & Residual + Food, Seed and Industrial After we get Domestic Use, we can then move on to Exports. This row is for all corn the US sells overseas. Finally, we now have the numbers needed for Total Use. Total Use = Feed & Residual + Food, Seed & Industrial + Exports The most important number in each column is Ending Stocks. Ending Stocks shows how many millions of bushels of Corn we have at the end of the year and how much we carry over to the next year. Ending Stocks = Total Supply Total Use One very important metric that traders use but is not on the WASDE report is Stock to Use Ratio. This ratio gives us an idea of the how the ending stocks stack up to total demand. To get the Stocks to Use, just divide the Ending Stocks by the Total Use. In 2010/2011 the stock to use was 1128 Ending Stocks divided by Total Use, which is an 8.64% stock to use percentage. Stocks to Use Ratio = Ending Stocks / Total Use 4

5 Finally, at the end of the report, the USDA reports their average farm price for Corn. The price of corn will go up and down depending if the WASDE increases/decreases Acres, Yield, Usage and Exports. If the USDA comes out and says Harvested Acres are increasing, the price of corn will go down (more supply). If yields are decreasing, prices go higher (less supply). If the WASDE says we are using less Feed for livestock, prices decrease (demand decreases). If the WASDE says exports are increasing, then prices go higher (demand increases). If you can get a handle on the WASDE report, the market expectations heading into the report, and have an idea of what each piece of data means, you can greatly improve your understanding of how grain markets trade based on fundamental reports. CORN 2010/ /12 EST. 2012/13 PROJ. Million Acres 2012/13 PROJ. Area Planted * 96.4 * Area Harvested * 88.9 * Bushels Yield per Harvested Acre * * Million Bushels Beginning Stocks Production Imports Supply, Total Feed and Residual Food, Seed & Industrial Ethanol & by-products Domestic, Total Exports Use, Total Ending Stocks CCC Inventory 0 0 Free Stocks Outstanding Loans Avg. Farm Price ($/bu)

6 Soybeans Balance Sheet The Soybean Balance sheet may be found on Page 15 of the WASDE. The soybean balance sheet is very similar to the corn balance sheet. Once you learn how to read one of the Balance Sheets, the learning the rest becomes much easier. Just like with Corn, the first half of the Balance Sheet is about Supply and the second is about Demand (Use). Supply Side: On the Supply Side, Production is equal to Area Harvested multiplied by Yield per Harvested Acre. Total Supply is Production plus Beginning Stocks plus Imports Production = Area Harvested X Yield per Acre Beginning Stocks = Last Year s Ending Stocks Total Supply = Production + Beginning Stocks + Imports Demand Side: On the Demand Side, we need to find Crushings, Exports, Seed and Residual. Total Use = Crushings + Exports + Seed + Residual Crushings and Exports make up for the majority of Soybean use while Seed and Residual are more of an afterthought. Crushing use is derived from the demand for both soybean oil and soybean meal used in feed and human food products. Soybeans are crushed to separate out the oil from the protein and create crude soybean oil and soybean meal. Exports represent the soybeans that American producers send abroad. Seed represents the soybeans used for seeding future crops. Residual is what the USDA uses to make the numbers fit together. If there are Soybeans used and they can t account for it, the USDA puts them into the Residual classification. The last metrics to calculate are Ending Stocks and the Stocks to Use ratio.»» Ending Stocks = Total Use Total Supply Stocks to Use = Ending Stocks / Total Use 6

7 SOYBEANS 2010/ /12 EST. 2012/13 PROJ. Million Acres 2012/13 PROJ. Area Planted * 76.1 ** Area Harvested * 75.3 ** Filler Bushels Yield per Harvested Acre * 40.5 ** Million Bushels Beginning Stocks Production Imports Supply, Total Crushings Exports Seed Residual Use, Total Ending Stocks Avg. Farm Price ($/bu) Wheat Balance Sheet The Wheat Balance Sheet may be found on page 11 of the WASDE. The wheat balance sheet is almost exactly the same as the corn balance sheet. Now that you know the Corn and Soybeans balance sheets, you should be able to understand the Wheat balance sheet. For your convenience, I will again list the formals below. Take this opportunity to review the Wheat Balance Sheet and do the calculations yourself. Supply Side: Production = Area Harvested X Yield per Acre Beginning Stocks = Last Year s Ending Stocks Total Supply = Production + Beginning Stocks + Imports 7

8 8 100 South Wacker Drive, Suite 1225 Demand Side: Domestic Use = Food + Seed + Feed & Residual Total Use = Domestic Use + Exports Ending Stocks = Total Use Total Supply Stocks to Use Ratio = Ending Stocks / Total Use WHEAT 2010/ /12 EST. 2012/13 PROJ. Million Acres 2012/13 PROJ. Area Planted * 56 Area Harvested * 48.8 Bushels Yield per Harvested Acre * 45.6 Million Bushels Beginning Stocks Production Imports Supply, Total Food Seed Feed and Residual Domestic, Total Exports Use, Total Ending Stocks CCC Inventory 0 0 Free Stocks Outstanding Loans Avg. Farm Price ($/bu)

9 Conclusion Now that you know and understand how to read the WASDE, you can start making your own Balance Sheets to model where the price of Corn, Soybeans and Wheat will be in the coming weeks and months. You will also have a greater understanding of the fundamental numbers when they are reported and how it can effect price changes. If you don t have time to do it yourself, then I highly recommend you register for my free weekly newsletter s Take. Before each WASDE I will send out what the trade estimates are for the WASDE and then we will review the report after the release. Sign Up for My Free s Take Newsletter If you enjoyed the this article, the educational nature, and the way it was presented, then I highly recommend you sign up for a free subscription to my weekly newsletter, s Take: About s Take s Take is a weekly market commentary newsletter with intraday trade recommendations published by Craig, Senior Broker with Daniels Trading in Chicago. s Take was created to give traders and investors a window into the elusive world of LaSalle and Wall Street. About Craig Craig is a Senior Broker at Daniels Trading and the author of the s Take futures and options newsletter. Craig began his career in the Financial Industry in 1998 providing trading support at the NYSE and then moved on to Goldman Sachs as a Technical Analyst in 2000, focusing on Commodity and Futures trading systems. Craig joined Daniels Trading in Chicago in 2007 as a Futures & Options Broker. He has his bachelors from the Rensselaer Polytechnic Institute (RPI) and his MBA from Stern School of Business at New York University (NYU), which was part of the Goldman Sachs Executive Program. Craig uses his understanding of Fundamental and Technical Analysis to help traders identify and act on trading opportunities in the Futures & Options markets. Craig has a deep and extensive knowledge of Online Trading Platforms, Pit Execution, Option Strategies, Systems Trading, Newsletter Trading, and Managed Futures. Craig excels in providing exceptional client service, trading execution, and the ability to expertly match client assets with trading and investment opportunities. 9

10 Sources USDA, World Supply and Demand Estimates, 4/12/2012, (7/15/2012) USDA, How the WASDE Report is Prepared 6/15/2012, htm (7/15/2012) USDA, How the WASDE Report is Prepared 6/15/2012, htm (7/15/2012) Disclosure THIS MATERIAL IS CONVEYED AS A SOLICITATION FOR ENTERING INTO A DERIVATIVES TRANSACTION. THIS MATERIAL HAS BEEN PREPARED BY A DANIELS TRADING BROKER WHO PROVIDES RESEARCH MARKET COMMENTARY AND TRADE RECOMMENDATIONS AS PART OF HIS OR HER SOLICITATION FOR ACCOUNTS AND SOLICITATION FOR TRADES. DANIELS TRADING, ITS PRINCIPALS, BROKERS AND EMPLOYEES MAY TRADE IN DERIVATIVES FOR THEIR OWN ACCOUNTS OR FOR THE ACCOUNTS OF OTHERS. DUE TO VARIOUS FACTORS (SUCH AS RISK TOLERANCE, MARGIN REQUIREMENTS, TRADING OBJECTIVES, SHORT TERM VS. LONG TERM STRATEGIES, TECHNICAL VS. FUNDAMENTAL MARKET ANALYSIS, AND OTHER FACTORS) SUCH TRADING MAY RESULT IN THE INITIATION OR LIQUIDATION OF POSITIONS THAT ARE DIFFERENT FROM OR CONTRARY TO THE OPINIONS AND RECOMMENDATIONS CONTAINED THEREIN. PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE PERFORMANCE. THE RISK OF LOSS IN TRADING FUTURES CONTRACTS OR COMMODITY OPTIONS CAN BE SUBSTANTIAL, AND THEREFORE INVESTORS SHOULD UNDERSTAND THE RISKS INVOLVED IN TAKING LEVERAGED POSITIONS AND MUST ASSUME RESPONSIBILITY FOR THE RISKS ASSOCIATED WITH SUCH INVESTMENTS AND FOR THEIR RESULTS. YOU SHOULD CAREFULLY CONSIDER WHETHER SUCH TRADING IS SUITABLE FOR YOU IN LIGHT OF YOUR CIRCUMSTANCES AND FINANCIAL RESOURCES. YOU SHOULD READ THE RISK DISCLOSURE WEBPAGE ACCESSED AT AT THE BOTTOM OF THE HOMEPAGE. DANIELS TRADING IS NOT AFFILIATED WITH NOR DOES IT ENDORSE ANY TRADING SYSTEM, NEWSLETTER OR OTHER SIMILAR SERVICE. DANIELS TRADING DOES NOT GUARANTEE OR VERIFY ANY PERFORMANCE CLAIMS MADE BY SUCH SYSTEMS OR SERVICES. BEING A SUCCESSFUL PAPER TRADER DURING ONE TIME PERIOD DOES NOT MEAN THAT YOU WILL MAKE MONEY WHEN YOU ACTUALLY INVEST DURING A LATER TIME PERIOD. MARKET CONDITIONS CONSTANTLY CHANGE. 10

Soybean Supply and Demand Forecast

Soybean Supply and Demand Forecast Soybean Supply and Demand Forecast U.S. soybean planted acreage is expected to increase 11.5 million acres over the forecast period. U.S. soybean yields are expected to increase 7 bushels per acre or an

More information

2013 World Grain Outlook

2013 World Grain Outlook 2013 World Grain Outlook Presented by: John Roach February 18, 2013 Disclaimer: Futures/options trading involves substantial risk of loss and trading may not be suitable for all investors. You should fully

More information

Grains and Oilseeds Outlook

Grains and Oilseeds Outlook United States Department of Agriculture Grains and Oilseeds Outlook Friday, February 20, 2015 www.usda.gov/oce/forum Agricultural Outlook Forum 2015 Released: Friday, February 20, 2015 GRAINS AND OILSEEDS

More information

Tennessee Agricultural Production and Rural Infrastructure

Tennessee Agricultural Production and Rural Infrastructure Tennessee Trends in Agricultural Production and Infrastructure Highlights - In many states the percentage of the state population designated by the U.S. Census Bureau as living in rural areas has declined,

More information

298,320 3,041 107,825. Missouri Economic Research Brief FARM AND AGRIBUSINESS. Employment. Number of Agribusinesses.

298,320 3,041 107,825. Missouri Economic Research Brief FARM AND AGRIBUSINESS. Employment. Number of Agribusinesses. Missouri Economic Research Brief FARM AND AGRIBUSINESS Missouri s Farm and Agribusiness Missouri s farm and agribusiness sectors include crops, livestock, industries supporting farm production and farm-related

More information

Ethanol Usage Projections & Corn Balance Sheet (mil. bu.)

Ethanol Usage Projections & Corn Balance Sheet (mil. bu.) Ethanol Usage Projections & Corn Balance Sheet (mil. bu.) Updated 12/21/215 Historic Est. Prelim. Proj. 216-17 Year: (production/marketing) 1/ 211-12 212-13 213-14 214-15 215-16 Low Med. 4 High Yield (bu.

More information

Chapter Five: Risk Management and Commodity Markets

Chapter Five: Risk Management and Commodity Markets Chapter Five: Risk Management and Commodity Markets All business firms face risk; agricultural businesses more than most. Temperature and precipitation are largely beyond anyone s control, yet these factors

More information

Grains and Oilseeds Outlook

Grains and Oilseeds Outlook United States Department of Agriculture Grains and Oilseeds Outlook Friday, February 26, 2016 www.usda.gov/oce/forum Agricultural Outlook Forum 2016 Released: Friday, February 26, 2016 GRAINS AND OILSEEDS

More information

AFBF Comparison of Senate and House Committee passed Farm Bills May 16, 2013

AFBF Comparison of Senate and House Committee passed Farm Bills May 16, 2013 CURRENT LAW SENATE AG COMMITTEE (S. 954) HOUSE AG COMMITTEE (HR 1947) Reported out of Committee 15 5 Reported out of Committee 36 10 Cost $979.7 billion over the 10 years before sequester reductions of

More information

U.S. Farm Policy: Overview and Farm Bill Update. Jason Hafemeister 12 June 2014. Office of the Chief Economist. Trade Bureau

U.S. Farm Policy: Overview and Farm Bill Update. Jason Hafemeister 12 June 2014. Office of the Chief Economist. Trade Bureau U.S. Farm Policy: Office of the Chief Economist Trade Bureau Overview and Farm Bill Update Jason Hafemeister 12 June 2014 Agenda Background on U.S. Agriculture area, output, inputs, income Key Elements

More information

this section shall not count toward pay limits under the 2014 Farm Bill limits. (Section 1119)

this section shall not count toward pay limits under the 2014 Farm Bill limits. (Section 1119) Title I Commodities (1) Repeal of Direct Payments Section 1101 of the House bill repeals direct payments effective with the 2014 crop year. The section continues direct payments for the 2013 crop year

More information

FCStone Grain Recap July 9, 2015

FCStone Grain Recap July 9, 2015 CORN: Values higher throughout the day on heavy volume as traders anticipate USDA s Friday S&D update and speculate on US crop problems. Weekly export sales of 535,000 tons vs 363,000 tons of old crop

More information

U.S. crop program fiscal costs: Revised estimates with updated participation information

U.S. crop program fiscal costs: Revised estimates with updated participation information U.S. crop program fiscal costs: Revised estimates with updated participation information June 2015 FAPRI MU Report #02 15 Providing objective analysis for 30 years www.fapri.missouri.edu Published by the

More information

Third Quarter 2015 Earnings Conference Call. 21 August 2015

Third Quarter 2015 Earnings Conference Call. 21 August 2015 Third Quarter 2015 Earnings Conference Call 21 August 2015 Safe Harbor Statement & Disclosures The earnings call and accompanying material include forward-looking comments and information concerning the

More information

The Supplementary Insurance Coverage Option: A New Risk Management Tool for Wyoming Producers

The Supplementary Insurance Coverage Option: A New Risk Management Tool for Wyoming Producers The Supplementary Insurance Coverage Option: A New Risk Management Tool for Wyoming Producers Agricultural Marketing Policy Center Linfield Hall P.O. Box 172920 Montana State University Bozeman, MT 59717-2920

More information

First Quarter 2015 Earnings Conference Call. 20 February 2015

First Quarter 2015 Earnings Conference Call. 20 February 2015 First Quarter 2015 Earnings Conference Call 20 February 2015 Safe Harbor Statement & Disclosures The earnings call and accompanying material include forward-looking comments and information concerning

More information

Farm Commodity Programs and the 2007 Farm Bill

Farm Commodity Programs and the 2007 Farm Bill Order Code RS21999 Updated January 25, 2008 Farm Commodity Programs and the 2007 Farm Bill Jim Monke Specialist in Agricultural Policy Resources, Science, and Industry Division Summary The farm commodity

More information

Market Monitor Number 3 November 2012

Market Monitor Number 3 November 2012 Market Monitor Number 3 November 2012 AMIS Crops: World Supply-Demand Balances in 2012/13 World supply and demand situation continues to tighten for wheat and maize but rice and soybeans have eased. In

More information

INDEPENDENT. OBJECTIVE. RELIABLE. Options Basics & Essentials: The Beginners Guide to Trading Gold & Silver Options

INDEPENDENT. OBJECTIVE. RELIABLE. Options Basics & Essentials: The Beginners Guide to Trading Gold & Silver Options INDEPENDENT. OBJECTIVE. RELIABLE. 1 About the ebook Creator Drew Rathgeber is a senior broker at Daniels Trading. He has been heavily involved in numerous facets of the silver & gold community for over

More information

Supply & demand outlook for the canola industry

Supply & demand outlook for the canola industry Supply & demand outlook for the canola industry J.P. Gervais Chief Ag Economist March 2015 @jpgervais Canola Canola is one component of the environment for oil producing crops Growth in demand has supported

More information

Market will worry about demand later Weekly Corn Review for May 11, 2016 By Bryce Knorr

Market will worry about demand later Weekly Corn Review for May 11, 2016 By Bryce Knorr Market will worry about demand later Weekly Corn Review for May 11, 2016 By Bryce Knorr USDA didn t do much to help the corn market in its May 10 reports other than give soybeans a big lift. That could

More information

FCStone Grain Recap October 1, 2015

FCStone Grain Recap October 1, 2015 CORN: A choppy but firm market today. Today starts the march of the private crop estimates led off with FCStone s number this afternoon. Export sales reported today showed net bookings of 748.2 tmt as

More information

Futures Basics & Essentials: The Beginners Guide to Trading Gold Futures INDEPENDENT. OBJECTIVE. RELIABLE.

Futures Basics & Essentials: The Beginners Guide to Trading Gold Futures INDEPENDENT. OBJECTIVE. RELIABLE. INDEPENDENT. OBJECTIVE. RELIABLE. About the ebook Creator Drew Rathgeber is a senior market strategist at Daniels Trading. He has been heavily involved in numerous facets of the Gold community for nearly

More information

Third Quarter 2014 Earnings Conference Call. 13 August 2014

Third Quarter 2014 Earnings Conference Call. 13 August 2014 Third Quarter 2014 Earnings Conference Call 13 August 2014 Safe Harbor Statement & Disclosures The earnings call and accompanying material include forward-looking comments and information concerning the

More information

CROP REVENUE COVERAGE INSURANCE PROVIDES ADDITIONAL RISK MANAGEMENT WHEAT ALTERNATIVES 1

CROP REVENUE COVERAGE INSURANCE PROVIDES ADDITIONAL RISK MANAGEMENT WHEAT ALTERNATIVES 1 Presented at the 1997 Missouri Commercial Agriculture Crop Institute CROP REVENUE COVERAGE INSURANCE PROVIDES ADDITIONAL RISK MANAGEMENT WHEAT ALTERNATIVES 1 Presented by: Art Barnaby Managing Risk With

More information

Outlook for the 2013 U.S. Farm Economy

Outlook for the 2013 U.S. Farm Economy Outlook for the 213 U.S. Farm Economy Kevin Patrick Farm and Rural Business Branch Resource and Rural Economics Division Highlights Net farm income in 213 forecast: $128.2 billion Net cash income in 213

More information

Grain Stocks Estimates: Can Anything Explain the Market Surprises of Recent Years? Scott H. Irwin

Grain Stocks Estimates: Can Anything Explain the Market Surprises of Recent Years? Scott H. Irwin Grain Stocks Estimates: Can Anything Explain the Market Surprises of Recent Years? Scott H. Irwin http://nationalhogfarmer.com/weekly-preview/1004-corn-controversies-hog-market http://online.wsj.com/news/articles/sb10001424052970203752604576641561657796544

More information

FCStone Grain Recap January 6, 2016

FCStone Grain Recap January 6, 2016 CORN: CH16 made new contract lows but were unable to hold below unchanged into the close. Weekly ethanol production marginally higher this week, up 4 thbpd to 996. Ethanol stocks built again reaching 21099

More information

CBOT AGRICULTURAL PRODUCTS

CBOT AGRICULTURAL PRODUCTS CBOT AGRICULTURAL PRODUCTS Business Development 141 W. Jackson Boulevard Chicago, IL 60604-2994 312-341-7955 fax: 312-341-3027 New York Office One Exchange Plaza 55 Broadway, Suite 2602 New York, NY 10006

More information

Quick Cash Flow Projections

Quick Cash Flow Projections Quick Cash Flow Projections The Quick Cash Flow Projections tool assists farm operators in projecting cash needs, farm profitability, and debt servicing capabilities. The program also aids users in performing

More information

Setting up your Chart of Accounts

Setting up your Chart of Accounts FARM FUNDS WORKSHEETS Setting up your Chart of Accounts Supplies Supplies are any inputs that will be used on a field, group of livestock, or equipment. Setting up a supply will set up the related expense

More information

OBTAINING OPERATING CAPITAL FOR 2016 GRAIN OPERATIONS: NEEDS, RISKS, REWARDS & THE BOTTOM LINE

OBTAINING OPERATING CAPITAL FOR 2016 GRAIN OPERATIONS: NEEDS, RISKS, REWARDS & THE BOTTOM LINE OBTAINING OPERATING CAPITAL FOR 2016 GRAIN OPERATIONS: NEEDS, RISKS, REWARDS & THE BOTTOM LINE 02.03.16 JEFF RODIBAUGH FIRST FARMERS BANK & TRUST POLL: 2016 CORN BELT SEED CONFERENCE 1. You believe there

More information

Multiple Peril Crop Insurance

Multiple Peril Crop Insurance Multiple Peril Crop Insurance Multiple Peril Crop Insurance (MPCI) is a broadbased crop insurance program regulated by the U.S. Department of Agriculture and subsidized by the Federal Crop Insurance Corporation

More information

JOINT EXPLANATORY STATEMENT OF THE COMMITTEE OF CONFERENCE

JOINT EXPLANATORY STATEMENT OF THE COMMITTEE OF CONFERENCE JOINT EXPLANATORY STATEMENT OF THE COMMITTEE OF CONFERENCE The managers on the part of the House and the Senate at the conference on the disagreeing votes of the two Houses on the amendment of the House

More information

CBOT AGRICULTURAL PRODUCTS GRAIN AND SOYBEAN FUTURES AND OPTIONS

CBOT AGRICULTURAL PRODUCTS GRAIN AND SOYBEAN FUTURES AND OPTIONS CBOT AGRICULTURAL PRODUCTS GRAIN AND SOYBEAN FUTURES AND OPTIONS Futures Markets provide the mechanism to ensure fairly consistent prices for grains, soybeans, and processed foods. Managing Uncertainty

More information

DAILY FINANCIAL & COMMODITY MARKET NEWS

DAILY FINANCIAL & COMMODITY MARKET NEWS DAILY FINANCIAL & COMMODITY MARKET NEWS FOR NEWSLETTERS, PUBLICATIONS, WEB SITES, SCRIPTS Writing daily market summaries is hard. It is exacting and time-consuming. Accuracy has to be 100%. Dozens, or

More information

Cash to Accrual Income Approximation

Cash to Accrual Income Approximation Cash to Accrual Income Approximation With this program, the user can estimate accrual income using the Schedule F from his/her federal income tax return. Fast Tools & Resources Farmers typically report

More information

How Crop Insurance Works. The Basics

How Crop Insurance Works. The Basics How Crop Insurance Works The Basics Behind the Policy Federal Crop Insurance Corporation Board of Directors Approve Policies Policy changes General direction of program Risk Management Agency Administers

More information

Market-Driven Inventory System (MDIS)

Market-Driven Inventory System (MDIS) Market-Driven Over the last dozen years, low-price and high-price extremes revealed shortcomings of the U.S. agricultural commodity program. Under the current program when supply exceeds demand, crop prices

More information

Missouri Soybean Economic Impact Report

Missouri Soybean Economic Impact Report Missouri Soybean Economic Report State Analysis March 2014 The following soybean economic impact values were estimated by Value Ag, LLC, as part of a Missouri Soybean Merchandising Council funded project.

More information

Commodity Exchange Endorsement for Livestock Gross Margin for Dairy Cattle

Commodity Exchange Endorsement for Livestock Gross Margin for Dairy Cattle Commodity Exchange Endorsement for Livestock Gross Margin for Dairy Cattle This endorsement contains the exchange prices that are used to set expected and actual prices for LGM for Dairy Cattle. To find

More information

HEDGING IN THEORY AND PRACTICE

HEDGING IN THEORY AND PRACTICE HEDGING IN THEORY AND PRACTICE Ann Berg Senior Commodity Markets Development Expert USAID/FINREP-ІІ Kyiv, 2013 July 11 Maize contract (CME) 320 310 307.58 $ 11 April 308.07 $ 13 June 300 291.44 $ 1 March

More information

Institute of Ag Professionals

Institute of Ag Professionals Institute of Ag Professionals Proceedings of the 2014 Crop Pest Management Shortcourse & Minnesota Crop Production Retailers Association Trade Show www.extension.umn.edu/agprofessionals Do not reproduce

More information

Agriculture & Business Management Notes...

Agriculture & Business Management Notes... Agriculture & Business Management Notes... Preparing and Analyzing a Cash Flow Statement Quick Notes... Cash Flow Statements summarize cash inflows and cash outflows over a period of time. Uses of a Cash

More information

ARC/PLC Program Overview

ARC/PLC Program Overview ARC/PLC Program Overview FSA and University of MN Extension Producer Meetings December 2014 January 2015 The 2014 Farm Bill provides the following: Eliminates DCP and ACRE program Allows for a one-time

More information

Abstract. Acknowledgments

Abstract. Acknowledgments Price Determination for Corn and Wheat: The Role of Market Factors and Government Programs. By Paul C. Westcott and Linwood A. Hoffman, Market and Trade Economics Division, Economic Research Service, U.S.

More information

General Information Series

General Information Series General Information Series 1 Agricultural Futures for the Beginner Describes various applications of futures contracts for those new to futures markets. Different trading examples for hedgers and speculators

More information

A BULLISH CASE FOR CORN AND SOYBEANS IN 2016

A BULLISH CASE FOR CORN AND SOYBEANS IN 2016 A BULLISH CASE FOR CORN AND SOYBEANS IN 2016 Probabilities for higher prices, and the factors that could spur price rallies. Commodity markets tend to move on three variables: perception, momentum and

More information

How much financing will your farm business

How much financing will your farm business Twelve Steps to Ag Decision Maker Cash Flow Budgeting File C3-15 How much financing will your farm business require this year? When will money be needed and from where will it come? A little advance planning

More information

OILSEEDS AND OILSEED PRODUCTS

OILSEEDS AND OILSEED PRODUCTS 3. COMMODITY SNAPSHOTS OILSEEDS AND OILSEED PRODUCTS Market situation Global oilseeds production in the 214 marketing year (see glossary for a definition of marketing year) reached record levels for the

More information

AIC Farm Bill Brief #1

AIC Farm Bill Brief #1 University of California July 2007 Agricultural Issues Center AIC Farm Bill Brief #1 The Farm Bill and California Food and Agriculture* Daniel A. Sumner** Every five years or so the United States reconsiders

More information

World Agricultural Supply and Demand Estimates

World Agricultural Supply and Demand Estimates ISSN: 1554-9089 World Agricultural Supply and Demand Estimates Office of the Chief Economist Agricultural Marketing Service Farm Service Agency Economic Research Service Foreign Agricultural Service WASDE

More information

Economic Effects of the Sugar Program Since the 2008 Farm Bill & Policy Implications for the 2013 Farm Bill

Economic Effects of the Sugar Program Since the 2008 Farm Bill & Policy Implications for the 2013 Farm Bill Economic Effects of the Sugar Program Since the 2008 Farm Bill & Policy Implications for the 2013 Farm Bill June 3, 2013 Overview Changes to the sugar program in the 2008 farm bill made a bad program even

More information

Managing Feed and Milk Price Risk: Futures Markets and Insurance Alternatives

Managing Feed and Milk Price Risk: Futures Markets and Insurance Alternatives Managing Feed and Milk Price Risk: Futures Markets and Insurance Alternatives Dillon M. Feuz Department of Applied Economics Utah State University 3530 Old Main Hill Logan, UT 84322-3530 435-797-2296 dillon.feuz@usu.edu

More information

LIVESTOCK GROSS MARGIN FOR DAIRY CATTLE INSURANCE POLICY QUESTIONS AND ANSWERS

LIVESTOCK GROSS MARGIN FOR DAIRY CATTLE INSURANCE POLICY QUESTIONS AND ANSWERS LIVESTOCK GROSS MARGIN FOR DAIRY CATTLE INSURANCE POLICY QUESTIONS AND ANSWERS 1. Q: What is the Livestock Gross Margin for Dairy Cattle Insurance Policy? A: The Livestock Gross Margin for Dairy Cattle

More information

1. Prices now 2. TA APH yield endorsement 3. Re-rating 4. Suggestions

1. Prices now 2. TA APH yield endorsement 3. Re-rating 4. Suggestions Crop Insurance Update Gary Schnitkey University of Illinois Topics 1. Prices now 2. TA APH yield endorsement 3. Re-rating 4. Suggestions 2 1 Combo Product and Old Products Type COMBO Product Old Product

More information

The Farm Bill Down in the Weeds Numbers

The Farm Bill Down in the Weeds Numbers Disclaimer The Farm Bill Down in the Weeds Numbers by Dr. G. Art Barnaby, Jr. Professor, Agricultural Economics. Kansas State University KSU Presentation Spring, 2014 Email: barnaby@ksu.edu Phone 78531515

More information

U.S. Farm Income. Randy Schnepf Specialist in Agricultural Policy. February 28, 2014. Congressional Research Service 7-5700 www.crs.

U.S. Farm Income. Randy Schnepf Specialist in Agricultural Policy. February 28, 2014. Congressional Research Service 7-5700 www.crs. Randy Schnepf Specialist in Agricultural Policy February 28, 2014 Congressional Research Service 7-5700 www.crs.gov R40152 Summary According to USDA s Economic Research Service (ERS), national net farm

More information

Contents. Acknowledgements... iv. Source of Data...v

Contents. Acknowledgements... iv. Source of Data...v Kentucky Farm Business Management Program Annual Summary Data: Kentucky Grain Farms - 2011 Agricultural Economics Extension No. 2012-17 June 2012 By: Amanda R. Jenkins Michael C. Forsythe University of

More information

ProPartners Financial Application Cover Page Please fax to 651-282-7861 with application

ProPartners Financial Application Cover Page Please fax to 651-282-7861 with application Loan Information: ProPartners Financial Application Cover Page Please fax to 651-282-7861 with application Applicant Name: Requested Amount Dealer Buy Down - % Dealer Add-On + % (Buy-down and add-on are

More information

Livestock Gross Margin Insurance for Dairy Farms What is it? Do I need it? What will it cost? A guide for Ohio dairy producers.

Livestock Gross Margin Insurance for Dairy Farms What is it? Do I need it? What will it cost? A guide for Ohio dairy producers. Cameron Thraen Thraen.1@osu.edu March 11, 2011 Livestock Gross Margin Insurance for Dairy Farms What is it? Do I need it? What will it cost? A guide for Ohio dairy producers. Prepared for the Risk Management

More information

Title I Programs of the 2014 Farm Bill

Title I Programs of the 2014 Farm Bill Frequently Asked Questions: Title I Programs of the 2014 Farm Bill November 2014 Robin Reid G.A. Art Barnaby Mykel Taylor Extension Associate Extension Specialist Assistant Professor Kansas State University

More information

Craig Thomas MSU-Extension Educator Dairy Farm Business Management and Milk Marketing

Craig Thomas MSU-Extension Educator Dairy Farm Business Management and Milk Marketing Livestock Gross Margin Insurance for Dairy Craig Thomas MSU-Extension Educator Dairy Farm Business Management and Milk Marketing Livestock Gross Margin Insurance for Dairy (LGM-Dairy) is a subsidized insurance

More information

A Business Newsletter for Agriculture. Vol. 12, No. 1 www.extension.iastate.edu/agdm. Energy agriculture - where s the nitrogen?

A Business Newsletter for Agriculture. Vol. 12, No. 1 www.extension.iastate.edu/agdm. Energy agriculture - where s the nitrogen? A Business Newsletter for Agriculture Vol. 12, No. 1 www.extension.iastate.edu/agdm November 2007 Energy agriculture - where s the nitrogen? by Don Hofstrand, value-added agriculture specialist, co-director

More information

Will It Sprout? Seed Germination Test

Will It Sprout? Seed Germination Test Objective Will It Sprout? Seed Germination Test The student will understand the importance of a seed germination test performed on field seed, and will do a classroom germ test. Grade Level 1-3 4-6 TEKS:

More information

CHOOSING AMONG CROP INSURANCE PRODUCTS

CHOOSING AMONG CROP INSURANCE PRODUCTS CHOOSING AMONG CROP INSURANCE PRODUCTS Gary Schnitkey Department of Agricultural and Consumer Economics University of Illinois at Urbana-Champaign Email: schnitke@uiuc.edu, Phone: (217) 244-9595 August

More information

Breakeven Analysis. Takes the user to the data input worksheet of the tool.

Breakeven Analysis. Takes the user to the data input worksheet of the tool. Breakeven Analysis This program allows the user to calculate breakeven price and yield levels and prepare projected net farm income and cash flow statements. The Breakeven Analysis program assists farm

More information

3.3 Real Returns Above Variable Costs

3.3 Real Returns Above Variable Costs 3.3 Real Returns Above Variable Costs Several factors can impact the returns above variable costs for crop producers. Over a long period of time, sustained increases in the growth rate for purchased inputs

More information

Hedging: To buy or sell a futures contract on a commodity exchange as a temporary substitute for an intended later transaction in the cash market.

Hedging: To buy or sell a futures contract on a commodity exchange as a temporary substitute for an intended later transaction in the cash market. Section I Learning objectives Register for Commodity Challenge and join an open game Understanding your challenge Ground rules for trading in Commodity Challenge Illustrate a simple hedge with futures

More information

Agricultural Commodity Marketing: Futures, Options, Insurance

Agricultural Commodity Marketing: Futures, Options, Insurance Agricultural Commodity Marketing: Futures, Options, Insurance By: Dillon M. Feuz Utah State University Funding and Support Provided by: On-Line Workshop Outline A series of 12 lectures with slides Accompanying

More information

KCBOT: The Kansas City Board of Trade was formally chartered in 1876 and trades hard red winter

KCBOT: The Kansas City Board of Trade was formally chartered in 1876 and trades hard red winter Section I Introduction to Futures and Options Markets Learning objectives To know major agricultural futures exchanges To see the types of commodities traded To understand common characteristics of futures

More information

Mechanics of the Futures Market. Andrew Wilkinson

Mechanics of the Futures Market. Andrew Wilkinson Mechanics of the Futures Market Andrew Wilkinson Risk Disclosure Options and Futures are not suitable for all investors. The amount you may lose may be greater than your initial investment. Before trading

More information

SOURCES AND USES OF FUNDS ON KFMA FARMS

SOURCES AND USES OF FUNDS ON KFMA FARMS KANSAS FARM MANAGEMENT ASSOCIATION Your Farm - Your Information - Your Decision N E W S L E T T E R Volume 6, Issue 3 March 2012 SOURCES AND USES OF FUNDS ON KFMA FARMS A flow of funds report, often referred

More information

Research verification coordinators collaborate with Arkansas Division of Agriculture crop specialists to determine a typical production method for

Research verification coordinators collaborate with Arkansas Division of Agriculture crop specialists to determine a typical production method for 1 2 3 Research verification coordinators collaborate with Arkansas Division of Agriculture crop specialists to determine a typical production method for application in the crop enterprise budgets. 4 Whole

More information

AGRICULTURAL SCIENCES Vol. II - Crop Production Capacity In North America - G.K. Pompelli CROP PRODUCTION CAPACITY IN NORTH AMERICA

AGRICULTURAL SCIENCES Vol. II - Crop Production Capacity In North America - G.K. Pompelli CROP PRODUCTION CAPACITY IN NORTH AMERICA CROP PRODUCTION CAPACITY IN NORTH AMERICA G.K. Pompelli Economic Research Service, U. S. Department of Agriculture, USA Keywords: Supply, policy, yields. Contents 1. Introduction 2. Past Trends in Demand

More information

Principles of Hedging with Futures

Principles of Hedging with Futures MARKETING & UTILIZATION Cooperative Extension Service Purdue University West Lafayette, IN 47907 NCH-47 Principles of Hedging with Futures Chris Hurt, Purdue University Robert N. Wisner, Iowa State University

More information

Dairy Margin Protection Program of the 2014 Farm Bill

Dairy Margin Protection Program of the 2014 Farm Bill : Dairy Margin Protection Program of the 2014 Farm Bill July 2015 Robin Reid Dr. Gregg Hadley Extension Associate Associate Professor Kansas State University Kansas State University 785-532-0964 785-532-5838

More information

Introduction to Futures Markets

Introduction to Futures Markets Agricultural Commodity Marketing: Futures, Options, Insurance Introduction to Futures Markets By: Dillon M. Feuz Utah State University Funding and Support Provided by: Fact Sheets Definition of Marketing

More information

Futures Investment Series. No. 2. The Mechanics of the Commodity Futures Markets. What They Are and How They Function. Mount Lucas Management Corp.

Futures Investment Series. No. 2. The Mechanics of the Commodity Futures Markets. What They Are and How They Function. Mount Lucas Management Corp. Futures Investment Series S P E C I A L R E P O R T No. 2 The Mechanics of the Commodity Futures Markets What They Are and How They Function Mount Lucas Management Corp. The Mechanics of the Commodity

More information

An Analysis of a Market-Driven Inventory System (MDIS)

An Analysis of a Market-Driven Inventory System (MDIS) An Analysis of a Market-Driven Inventory System (MDIS) Harwood D. Schaffer, Research Assistant Professor Chad Hellwinckel, Research Assistant Professor Daryll E. Ray, Professor and Co-Director Daniel G.

More information

Agriculture Production, Trading and Brokerage SEEK MORE

Agriculture Production, Trading and Brokerage SEEK MORE Agriculture Production, Trading and Brokerage SEEK MORE Discover profitable insights on the world s agriculture markets Changing agriculture markets create new opportunities. Are you going to see and seize

More information

Internal Revenue Service

Internal Revenue Service Internal Revenue Service Number: 201120008 Release Date: 5/20/2011 Index Number: 1382.00-00, 199.06-00 ------------------- ------------------------ ---------------------------- -------------------------------

More information

Grain Inventory Management

Grain Inventory Management Grain Inventory Management With this program, the user can manage and track grain inventories by landowner, production location, storage site and field. Transactions can be recorded for: Production Grain

More information

Introductory Pricing/Marketing Workshop for Grains, On-Line

Introductory Pricing/Marketing Workshop for Grains, On-Line (Lecture notes for the first session, 2/3/14) Introductory Pricing/Marketing Workshop for Grains, On-Line Introduction Michigan State University Extension (MSUE) and Michigan CORN are offering this on-line

More information

Commodity Futures and Options

Commodity Futures and Options Understanding Commodity Futures and Options for Producers of Livestock and Livestock Products CIS 1100 The Authors Larry D. Makus, C. Wilson Gray and Neil R. Rimbey* Introduction Risk associated with an

More information

Handling CCC Crop Loans In FINAN

Handling CCC Crop Loans In FINAN 4/21/2009 Handling CCC Crop Loans In FINAN Entering CCC crop loans in FINAN can be confusing for even the most seasoned analysis veteran. CCC loans pose a special problem because IRS allows two alternative

More information

Grain marketing in the real world

Grain marketing in the real world 2009 GRDC FOR IRRIGATION CROPPERS Grain marketing in the real world Paper prepared by Ron Storey Australian Crop Forecaster Email: ron@cropforecasters.com.au IREC C/- CSIRO Land and Water, Griffith Private

More information

Crop-Share and Cash Rent Lease Comparisons Version 1.6. Introduction

Crop-Share and Cash Rent Lease Comparisons Version 1.6. Introduction Crop-Share and Cash Rent Lease Comparisons Version 1.6 Alan Miller and Craig L. Dobbins Spreadsheet can be found at http://www.agecon.purdue.edu/extension/pubs/farmland_values.asp Introduction This spreadsheet

More information

Protecting Your Investment- Canola Crop Insurance Options

Protecting Your Investment- Canola Crop Insurance Options Protecting Your Investment- Canola Crop Insurance Options December 2014 2015 Crop Year Supplemental Coverage Option The 2014 Farm Bill authorized the new Supplemental Coverage Option (SCO) endorsement

More information

CROP BUDGETS, ILLINOIS, 2015

CROP BUDGETS, ILLINOIS, 2015 CROP BUDGETS Department of Agricultural and Consumer Economics University of Illinois CROP BUDGETS, ILLINOIS, 2015 Department of Agricultural and Consumer Economics University of Illinois September 2015

More information

THIS REPORT CONTAINS ASSESSMENTS OF COMMODITY AND TRADE ISSUES MADE BY USDA STAFF AND NOT NECESSARILY STATEMENTS OF OFFICIAL U.S.

THIS REPORT CONTAINS ASSESSMENTS OF COMMODITY AND TRADE ISSUES MADE BY USDA STAFF AND NOT NECESSARILY STATEMENTS OF OFFICIAL U.S. THIS REPORT CONTAINS ASSESSMENTS OF COMMODITY AND TRADE ISSUES MADE BY USDA STAFF AND NOT NECESSARILY STATEMENTS OF OFFICIAL U.S. GOVERNMENT POLICY Required Report - public distribution Date: GAIN Report

More information

Debt Service Analysis: Can I Repay?

Debt Service Analysis: Can I Repay? Purdue Extension Knowledge to Go Debt Service Analysis: Can I Repay? Low prices and incomes have made many farmers and their lenders concerned about the farmers ability to fulfill debt obligations. Lenders

More information

Corn Transportation Profile

Corn Transportation Profile Corn Transportation Profile AMS Transportation and Marketing Programs August 2014 Marina R. Denicoff Marvin E. Prater Pierre Bahizi Executive Summary America s farmers depend on transportation as the critical

More information

Implications of Crop Insurance as Social Policy

Implications of Crop Insurance as Social Policy Implications of Crop Insurance as Social Policy Bruce Babcock Iowa State University Presented at the Minnesota Crop Insurance Conference Sept 10, 2014 Mankato, MN Summary of talk 2014 farm bill irrevocably

More information

Appendix A. A Nonstochastic Comparison of Price- and Revenue-Based Support

Appendix A. A Nonstochastic Comparison of Price- and Revenue-Based Support Appendix A. A Nonstochastic Comparison of Price- and Revenue-ased Support efore planting, the producer can only guess at harvested yields and harvesttime prices due to their stochastic nature (that is,

More information

Educational Efforts With FAST Tools

Educational Efforts With FAST Tools Educational Efforts With FAST Tools By Paul N. Ellinger 1 farmdoc companion project initiated in 1999 FAST Tools Development of spreadsheet-based tools to aid decisions for producers, lenders, consultants

More information

- 1 - The Canadian flax industry has a strong visual grading system designed to ensure uniform quality.

- 1 - The Canadian flax industry has a strong visual grading system designed to ensure uniform quality. - 1 - OVERVIEW OF THE FLAXSEED SECTOR IN MANITOBA Manitoba has been growing flax since the late 18s but it was not until World War II that it emerged as an alternative cash crop to wheat and other cereals.

More information

U.S. Farmland and other Real Assets. A Research Note

U.S. Farmland and other Real Assets. A Research Note U.S. Farmland and other Real Assets A Research Note Stephen A. Kenney Senior Investment Analyst January 2010 DISCLAIMERS AND NOTE ON FORWARD LOOKING STATEMENTS Hancock Agricultural Investment Group, a

More information

Hedging strategies aim to reduce price risk

Hedging strategies aim to reduce price risk April 2014 INSIGHTS Hedging strategies aim to reduce price risk AgriThought AgriBank provides financial solutions to meet the needs of production agriculture in America s heartland. We feature our research

More information

All Approved Insurance Providers All Risk Management Agency Field Offices All Other Interested Parties

All Approved Insurance Providers All Risk Management Agency Field Offices All Other Interested Parties United States Department of Agriculture Farm and Foreign Agricultural Services Risk Management Agency Beacon Facility Mail Stop 0801 P.O. Box 419205 Kansas City, MO 64141-6205 March 3, 2014 INFORMATIONAL

More information