412 - Agricultural Commodities Marketing - Material
Please note the change of location of the second meeting of The Fed Cattle Market Simulator. We are meeting at the CoBank Center at 4492 East County Road 56. This is just past ARDEC which is on the Frontage Road and north of Mountain Vista Dr while south of Wellington. If you dont know where this is and have not been there before then dont try to find it Saturday morning. Find it this afternoon. Beautiful day for a drive.
On-campus students: deadlines for assignments are posted with that assignment.
Online students: adhering to the assignment deadline is appreciated. The absolute deadline is the day the assignment is returned, reviewed in class, and lecture posted.
When you send me an email please make sure the subject line leads with AREC 412:... and provides a topic.
All students campus and distance please read the following:
If you need to email me an attachment then please do two things. First, if there are multiple files then zip them into a single .zip compressed file and send that. (Left click on the multiple files, then right click, choose Send To, and choose Compressed (zipped) Folder. Second, always use the following file naming convention, AREC 412 AssignmentName&Number YourLastName. For example, Quiz 3 becomes AREC 412 Quiz 3 YourLastName.pdf. (Please dont send me a document named Quiz 3.pdf.)
WSJ Reading Suggestions...
The link to the WSJ website to sign-up for the paper is http://www.wsj.com/studentoffer - and you must list me as the Referring Instructor and list Colorado State University (but the major and course are not critical) so that I know you have signed up. You may share the paper but that must be communicated to me through email.
https://store.wsj.com/v2/shop/60616004?mbsy_source=44dc7881-91e7-40d3-bfb5- Use this link instead.
Class Cancelled Days
September 27-29 (Th&F) Craig & Grand Junction, CO @ Ag Lenders Meetings cancelled class
October 2-3 (M&T) Minnesota cancelled class
October 12 (Th) Akron, CO @ Ag Lender Meeting no class impact
October 27 (F) Denver, CO @ Colorado Department of Agriculture Outlook Committee Meeting no class impact
October 31 (T) Brush, CO @ Crop Insurance Education Meetings no class impact
November 1-2 (W&Th) Rocky Ford, & Alamosa, CO @ Ag Lenders Meeting potential cancelled class
November 21 (T) Torrington, WY @ Crop Producer Meeting no class impact
Syllabus and Survey
AREC 412 Syllabus - 8/18
AREC 412 Lecture A Introduction - 8/21
AREC 412 Lecture B Institutions 8/23
CBOT Corn Futures Price Quotes done in class
CME Rulebook Chapter 101 & Chapter 102 These are resources only so do not print them.
CME Products Traded
AREC 412 Lecture C Price Discovery 9/1
dlr 08-23-2017 dlr 08-28-2017 August 2017 Cattle on Feed Report discussion
dlr 07-03-2017 no pre-report discussion June 2017 Acreage Report discussion This years report was not a good teaching example.
dlr 04-03-2017 no pre-report discussion March 2017 Prospective Plantings Report discussion.
dlr 06-30-2015 dlr 07-01-2015 June 2015 Acreage Report Discussion The 2015 report was a good example.
Look in your recent WSJ. The GDP was revised upward and that surprised the market.
Modern Trader had an article on what is expected regarding interest rates.
dlr 07-02-2013 Brock Report Summary June 2013 Acreage Report & Grain Stocks Report discussion
dlr 06-26-2012 dlr 08-09-2012 dlr 08-13-2012 August 2012 Crop Production (pg 6) & August 2012 WASDE (pg 12)
dlr 09-10-2008 dlr 09-12-2008 CropProd-09-12-2008 CropProd-10-10-2008_revision
Find the CMEs Federal Funds futures quotes for 2017-09-06 & determine when are interest rates going to increase?
Find the CMEs Crude Oil futures quotes for 2017-09-06 & determine what the long-run price of oil is?
AREC 412 Lecture D Forward Pricing & Measuring Risk 9/8 Marked Up Version
Top Producer The tail of two tails. Old article with good ways to think.
CBOT Corn Prices 2017-09-08 Go to the CME Group website and look up the corn prices out the next several years.
KCBOT Wheat Prices 2017-09-08 Do the same for hard red winter wheat.
AREC 412 Lecture E Basis & Basis Risk 9/18 Re-Print or Re-Download this document
AREC 412 Lecture F Grain Basis & Yield Risk 9/25
AREC 412 Lecture G Livestock Basis & Hedging Summary 10/4
Hedging with Futures and Options Examples Spreadsheet 10/13 reposted 12/6
This spreadsheet does many of the hedge calculations for a decision maker and allows the user to examine but-what-if questions.
End of material for Exam 1.
AREC 412 Lecture H Fundamental Analysis: Motivation & Nonstorable Commodities - 10/13
USDA Cattle on Feed Report
USDA Livestock Slaughter Report
USDA ERS Livestock & Dairy Outlook
Cattle-Fax Trends & Cattle-Fax Update
AREC 412 Lecture I Fundamental Analysis: Storable Commodities - 10/30
USDA World Agricultural Supply and Demand Estimates (WASDE) Report
USDA Crop Production Report & USDA Crop Progress Report
USDA ERS Feedgrain Outlook, USDA ERS Oil Crops Outlook, & USDA ERS Wheat Outlook
AREC 412 Lecture J Technical Analysis: Summary - 11/27
End of material for Exam 2.
AREC 412 Overheads O 12/6
Example Options Calculations and Graphs Spreadsheet 12/6
Hedging with Futures and Options Examples Spreadsheet 12/6
AREC 412 Overheads Z
Handout & Assignment - Fed Cattle Market Simulator Dates - 8/23
Handout - Mark to the Market 8/30
Handout - Risk and Return Figures 9/11
Handout - Risk and Expectations Figures 9/11
Handout - Wheat Basis Tables 9/18 Marked Up Version
Handout - Wheat Transportation Costs 9/20
Handout - Wheat Storage Costs, Seasonal Price Improvement & Basis Table Figures 9/20
Handout - Cattle Basis Tables 10/4 do not print
Handout - Cattle Transportation Costs 10/4
Handout - Cattle Basis Figures & Calculations 10/4
Handout - Forecast Live Cattle Futures 10/16
Handout - Forecast Feeder Cattle Futures 10/25
Handout - Cattle & Beef Markets Information - 10/25
Handout - Grain Balance Sheet Tables & Figures 11/1
Handout - Technical Analysis Tools 11/3
Handout Charts Print PDF as whole pages and not multiple document pages per printed page.
Charts 2016-11 Bar Chart Examples Trends / Support & Resistance 11/3 - reposted 11/
Charts 2016-11 Bar Chart Examples - Topping & Bottoming / Consolidation 11/ reposted 11/
Charts 2016-11 Examples Alternative Tools - 11/ reposted 11/
Elliott Wave The links www.dolefin.com have changed so you will need to go in through the front door if you want to see of topics.
Handout - Market Wizards Sample 10/30
Market Wizards Assignment Schedule - Your assignment is due by the end of the week at the beginning of class or submitted through Canvas.
FuturesMag 2011-03 William Eckhardt Interview
Purcell & Koontz Textbook (Left Click to Open Link.)
Other Reading Material
WSJ 2008-07-17 Declining Value of College Degree - The news here is not really all that bad and it has implications what you do this last year or two of and what you need to do after university.
2008-09 BEEF Feeder Cattle Risk Management
2008-09 Progressive Farmer Elevators Under Pressure
2008-08 Corn & Soybean Digest Elevator Marketing Jam
2008-03 Corn & Soybean Digest - Rule Your Risks
2008-08-08 Ag Journal - Rising Costs
WSJ 2008-08-13 Cotton Price Spike
Articles on Speculators
WSJ 2008-08-15 Data & Oil Speculators
WSJ 2008-08-01 Chemistry of Speculation Based on this, is there any way government can limit speculation?
WSJ 2008-07-03 Commodity Funds
WSJ 2008-06-28 Commodity Bets
WSJ 2008-04-22 Rein in Grain Speculators
Price Discovery Examples
WSJ 2008-08-28 Stocks Energy Price Discovery
WSJ 2008-08-11 Corn Report Price Discovery
WSJ 2008-06-14 Floods & Grain Prices
WSJ 2008-04-14 GE & Price Discovery
WSJ 2007-08-09 Price Discovery Example
WSJ 2006-06-11 Fed Raises Rates
Reading Material on Problems with Basis Convergence
Non-Convergence in Domestic Commodity Futures Markets USDA ERS Publication
Poor Convergence Performance of CBOT Corn, Soybean and Wheat Futures Contracts University of Illinois Publication
The Causes and Effects of Wide Kansas Wheat Basis Bids Kansas State University Publication
Extra Reading Material
CSU DARE Undergraduate Learning Outcomes 8/21
Congressional Budget Office Report Budget Update & Economic Outlook 2017-2027 8/28
CFTC Complaint Against PFG Best 8/30
CFTC Complaint Against MF Global 8/30
Managing Risk in Farming: Concepts, Research, and Analysis USDA ERS Publication
Gordon and Rouwenhorst - Yale University Paper - Facts and Fantasy's About Commodity Futures
Daily Livestock Market Report -
Fed Cattle Market Simulator Material
The Packer-Feeder Game will be conducted in Clark A-201 on 10/7 and in the CoBank Center at ARDEC on 10/21 with a back-up date reserved for 11/11. Attendance both days is a requirement for the course. A request for an excused absence must be made in writing and is not guaranteed. The request maker may be required to locate a substitute not currently taking the course. Please see the syllabus if you cannot make this requirement. You have an alternative assignment.
Trading will begin at 8:15 AM and last through 4:00 PM. Arrive earlier, by 8:00 AM, and be ready to begin trading. We will not leave the facility during the day. I will have some lunch brought in and you should bring water and a drink for lunch. And whatever snacks you need for your day.
Please read the pre-works by the posted date. Work the blank pages. And be prepared. It wont affect your grade but it will effect if and how much money you make or don't make. Please feel free to bring a laptop computer for your team to use.
Packer Feeder Game Pre-Work - Mechanics 9/18 read this week.
Packer Feeder Game Pre-Work - Cash Market 9/25 read this week.
Packer Feeder Game Pre-Work - Futures Market 10/2 read this week.
Payout Worksheet 11/9 These funds will be available with Denise Davis.
The Fed Cattle Market Simulator Grading and Assignment 11/15 due week of 11/27. Submit via email.
Past research based on the Fed Cattle Market Simulator is written up in the following:
Koontz Peel Trapp & Ward (RAE 1995) general discussion,
Ward Koontz Peel & Trapp (RAE 1996) general discussion,
Anderson Ward Koontz Peel & Trapp (JARE 1998) information economic experiment, and
Ward Koontz Dowty Peel & Trapp (AJAE 1999) captive supply economic experiment.
Read if you are interested.
Date assignments for ANEQ478 students 10/6
AREC 412 List of Exam 1 Topics exam date 10/20 - There will be five or six questions. One hedge and one storage hedge and three or four concept questions. The concept questions are short-answer requiring lists and/or discussion.
AREC 412 List of Exam 2 Questions exam date 12/1 (?) - There will be five or six questions. Two fundamental analysis questions. Two or three technical analysis questions one or two using real-world charts and the balance discussion/techniques/principles question. Finally, there will be one other discussion/context question.
AREC 412 List of Final Exam Questions (12/??) Two Hedge questions with one a Storage Hedge, one Fundamental Analysis question, two Technical Analysis questions with one or two involving charts, and two or three discussion and concept questions.
AREC 412 Quiz 1 - Customer Account 8/30 - due 9/6 beginning of class
AREC 412 Quiz 2 - Marking to Market 9/1 - due 9/8 beginning of class
Purcell & Koontz pages 5-8
Spreadsheet Key 9/18
AREC 412 Quiz 3 - Basic Hedge 9/25 due 9/27 for online students
AREC 412 Quiz 4 - Storage Hedge 10/6 - due 10/9 for online students
AREC 412 Quiz 5 Market Information 10/25 due 11/3 beginning of class
AREC 412 Quiz 6 - Charting
AREC 412 Problem Set 1 9/20 - due 9/27 (Start Parts F-K now and then complete Parts A-E when we cover that material in class.)
Problem Set 1 Data - Right Click and Save As...
Problem Set 1 Key posted to Canvas
AREC 412 Problem Set 2 10/4 - due 10/11
Problem Set 2 Key posted to Canvas
AREC 412 Problem Set 3 10/23 - due 11/1
Problem Set 3 Key posted to Canvas
AREC 412 Problem Set 4 11/8 due 11/17
Problem Set 4 Key posted to Canvas
AREC 412 Problem Set 5
Careers and Opportunities...
How to Get Rich
Savings and Investments Overheads
Savings and Investments Figures
WSJ Spreadsheet of Mutual Funds - somewhat edited