|
|
|
MARKET DATA, INC.
- 2005 WHEAT AND CORN MARKETING STRATEGIES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MARKET
DATA, INC. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2005
Potential Marketing Returns vs. Harvest Prices |
|
|
|
|
|
|
|
|
|
|
|
|
|
| A. |
Assumes a |
1,000.0 |
acre
dryland farm with a 1/3 - 1/3 - 1/3 crop rotation and signed up for two
commodities - cost of $500.00. |
|
|
|
|
|
|
|
|
|
|
| B. |
WHEAT REVIEW: |
as of 11-11-2005 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 1. |
Total Acres of |
333.3 |
with a yield of |
40.00 |
bushel for a |
13,333.3 |
bushel crop. |
|
|
| 2. |
Assumes a |
70.00% |
CRC or RA+ |
38.00 |
APH for |
8,866.7 |
insurance bushels. |
|
| 3. |
Assumes a |
600.0 |
acre Base and |
34.00 |
bushel yield |
17,340.0 |
bushel
covered by CCP. |
|
| 4. |
Assumes a |
$2.65 |
per bushel loan rate and a cash basis of
a |
-$0.40 |
a bushel. |
|
|
| |
|
|
|
|
|
|
|
|
|
| 5. |
January
31, 05 Monthly News |
$3.60 |
30.00% |
of the crop at |
$3.20 |
or bushels of |
4,000.0 |
$12,800.00 |
| 6. |
March 10, 2005 Greg's Gossip said to price |
$3.70 |
10.00% |
of the crop at |
$3.30 |
or bushels of |
1,333.3 |
$4,400.00 |
| 7. |
March 10, 2005 Greg's Gossip said to price |
$3.80 |
0.00% |
of the crop at |
$3.40 |
or bushels of |
0.0 |
$0.00 |
|
(The $3.80 target was not reached - high was
$3.74 on SEP K.C. but we were targeting 10% more at this price) |
|
|
|
|
|
|
|
|
|
|
|
| 8. |
Sept. 1, 2005 Gossip - DEC |
$3.70 |
10.00% |
of the crop at |
$3.30 |
or bushels of |
1,333.3 |
$4,400.00 |
|
(Less: Cost of holding to 9-29) |
-$0.12 |
10.00% |
of the crop at |
-$0.12 |
or bushels of |
1,333.3 |
-$160.00 |
|
|
|
|
|
|
|
|
|
|
| 9. |
Sept. 15, 2005 Gossip - DEC |
$3.90 |
40.00% |
of the crop at |
$3.50 |
or bushels of |
5,333.3 |
$18,666.67 |
|
(Less: Cost to hold to 10-12) |
-$0.14 |
40.00% |
of the crop at |
-$0.14 |
or bushels of |
5,333.3 |
-$746.67 |
|
|
|
|
|
|
|
|
|
|
| 10. |
Cash Price Available today of |
$3.72 |
10.00% |
of the crop at |
$3.32 |
or bushels of |
1,333.3 |
$4,426.67 |
|
(Less: Cost of holding to date) |
-$0.16 |
10.00% |
of the crop at |
-$0.16 |
or bushels of |
1,333.3 |
-$213.33 |
|
|
|
|
|
|
|
|
|
|
| 11. |
MDI marketing efforts netted a producer an
average price of |
|
$3.27 |
Totals |
13,333.3 |
$43,573.33 |
|
|
|
|
|
|
|
|
|
|
| 12. |
Less: Using the Harvest price only of |
$3.52 |
SEP on 7-1 |
-$3.12 |
on all bushels |
13,333.3 |
-$41,600.00 |
|
|
|
|
|
|
|
|
|
|
| 13. |
Equals Net Gain (-) from following Market Data,
Inc. Pre-harvest marketing |
$0.15 |
per bushel |
|
$1,973.33 |
|
|
|
|
|
|
|
|
|
|
| 14. |
Assuming a cost per bushel on the MDI service
of |
|
-$0.019 |
per bushel |
|
-$250.00 |
|
(one-half of $500 for two commodities divided
by the bushels raised) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 15. |
Equals NET return after the MDI service costs
are figured in of |
$0.129 |
per bushel |
|
$1,723.33 |
|
|
|
|
|
|
|
|
|
|
| 16. |
Return on investment from MDI service on WHEAT in this review of |
689.33% |
or a return of |
6.89 |
to 1.00. |
|
|
|
|
|
|
|
|
|
|
| 17. |
NOTE:
That the SEP K.C. Wheat futures had a high price of |
$3.740 |
on March
15, 2005. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| C. |
CORN REVIEW: |
as of 11-11-2005 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 1. |
Total Acres of |
333.3 |
with a yield of |
70.00 |
bushel for a |
23,333.3 |
bushel crop. |
|
|
| 2. |
Assumes a |
70.00% |
CRC or RA+ |
65.00 |
APH for |
15,166.7 |
insurance bushels. |
|
| 3. |
Assumes a |
300.0 |
acre Base and |
50.00 |
bushel yield |
12,750.0 |
bushel
covered by CCP. |
|
| 4. |
Assumes a |
$1.95 |
per bushel loan rate and a cash basis of
a |
-$0.25 |
a bushel. |
|
|
| |
|
|
|
|
|
|
|
|
|
| 5. |
January 31, 05 Newsletter |
$2.50 |
30.00% |
of the crop at |
$2.25 |
or bushels of |
7,000.0 |
$15,750.00 |
| 6. |
January 31, 05 Newsletter |
$2.70 |
30.00% |
of the crop at |
$2.45 |
or bushels of |
7,000.0 |
$17,150.00 |
| 7. |
July 14, 2005 Greg's Gossip |
$0.00 |
0.00% |
of the crop at |
$2.35 |
or bushels of |
0.0 |
$0.00 |
|
(figured as a |
$2.70 |
DEC corn
put for a cost of |
$0.10 |
$2.35 |
cash
price floor - never hit) |
|
|
|
|
|
|
|
|
|
|
|
| 8. |
July 14, 2005 Greg's Gossip |
$2.50 |
10.00% |
of the crop at |
$2.25 |
for bushels of |
2,333.3 |
$5,250.00 |
|
(figured buying |
$2.60 |
corn put
& Selling $3.10 call |
$0.10 |
$2.25 |
cash
price floor - was traded) |
|
|
|
|
|
|
|
|
|
|
|
| 9. |
Balance
to be sold at harvest |
$1.97 |
DEC futures + |
-$0.25 |
$1.72 |
on bushels of |
7,000.0 |
$12,040.00 |
|
|
|
|
|
|
|
|
|
|
| 10. |
LDP available at harvest time on bushels
pre-harvest priced was around |
$0.40 |
LDP on all of |
23,333.3 |
$9,333.33 |
|
|
|
|
|
|
|
|
|
|
| 11. |
|
|
|
|
average price |
$2.55 |
Totals |
23,333.3 |
$59,523.33 |
|
|
|
|
|
|
|
|
|
|
| 12. |
Less: Using the Harvest price on November 1 |
$1.97 |
on DEC 05 |
-$1.72 |
on all bushels |
23,333.3 |
-$40,133.33 |
|
Less: LDP available on all bushels as of
November 1 |
|
-$0.40 |
on
all bushels |
23,333.3 |
-$9,333.33 |
|
|
|
|
Total received at harvest of |
$2.12 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| 13. |
Equals Net Gain (-) from following Market Data,
Inc. Pre-harvest marketing |
$0.43 |
per bushel |
|
$10,056.67 |
|
|
|
|
|
|
|
|
|
|
| 14. |
Assuming a cost per bushel on the MDI service
of |
|
-$0.011 |
per bushel |
|
-$250.00 |
|
(one-half of $500 for two commodities divided
by the bushels raised) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 15. |
Equals NET return after the MDI service costs
are figured in of |
$0.420 |
per bushel |
|
$9,806.67 |
|
|
|
|
|
|
|
|
|
|
| 16. |
Return on investment from CORN in this example of |
|
3922.67% |
or a return of |
39.23 |
to 1.00. |
|
|
|
|
|
|
|
|
|
|
| 17. |
NOTE:
That DEC Corn futures had a high closing price of |
$2.700 |
on July
18, 2005. |
|
|
|
|
|
|
|
|
|
|
|
|
| D. |
COMBINED WHEAT AND CORN NET RETURN OF |
|
23.06 |
to 1.00 or dollars gained of |
$11,530.00 |
|
|
|
|
|
|
|
|
|
|
| E. |
RISK MANAGEMENT REVIEW: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 1. |
Percentage of the
WHEAT crop that was pre-harvest priced |
50.00% |
with the
risk of non-production vs. crop insurance that |
|
covered a total percentage of the actual crop |
66.50% |
for a
cushion on the crop insurance bushels |
16.50% |
. |
|
|
|
|
|
|
|
|
|
|
| 2. |
Percentage of the CORN crop that was pre-harvest priced |
70.00% |
with the
risk of non-production vs. crop insurance that |
|
covered a total percentage of the actual crop |
65.00% |
for a
cushion on the crop insurance bushels |
-5.00% |
. |
|
|
|
|
|
|
|
|
|
|