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NEWS RELEASE For immediate release: April 1, 2016 McCUNE COOP JOINS COMARK Effective April 1, 2016, McCune Farmers Union Coop Association of southeast Kansas will join 12 other cooperatives from across the state as a member owner of Comark Grain Marketing, LLC. As a member of Comark, McCune will benefit from more efficient grain marketing, shared profits, and a reduced risk profile, while still maintaining their local identity as an individual cooperative. Ryan McCoy, Comark Grain Marketing president, said, "Comark looks forward to a long, mutually beneficial, relationship with our new owner." McCune Coop, incorporated in 1941, is located in Crawford County and also serves producers in Cherokee, Labette, and Neosho counties. The cooperative handles corn, soybeans, milo, hard red winter wheat, and soft red winter wheat. Russ Smith, general manager, said, "Being a standalone coop, we don’t have the volume needed to be competitive, so Comark helps fill that need." Smith also said he appreciates the marketing expertise Comark brings to McCune’s operation, which made joining Comark, "a really attractive deal." Comark Grain Marketing was established in 2008 to bring efficiency to the grain marketplace while limiting risk for nine cooperative owners and a joint owned LLC in southcentral Kansas. Today, Comark Grain Marketing is responsible for grain merchandising, risk management, sales accounting, and truck and rail logistics in addition to other grain responsibilities for 12 cooperative owners throughout southcentral, southeast, and northwest Kansas. "The addition of McCune will work very well with our other member assets in southeast Kansas," said McCoy. These owners have assets that include 73 elevator locations and over 56 million bushels of grain storage capacity in Kansas, Nebraska, and Oklahoma. Because of the efficiencies created in the relationship between Comark and its members, Comark has returned nearly all profits to their owners. ----END---- Attached: Comark Grain Marketing, LLC logo Contact details: Ryan McCoy
CoMark Grain April Newsletter
CoMark Grain Newsletter October 2012
It has been another tough fall harvest in all the CoMark territory. Poor yields and poor quality were the main issues for you and CGM. Most of the wheat is in the ground by now and I hope that the old saying "plant it in the dust and the bins will bust" comes true. Hopefully it has rained by the time you receive this newsletter.
Aflatoxin has been getting a lot of press recently since it is a wide spread problem. As you know, we have been battling aflatoxin for the last several years. We are seeing many changes in the arena of aflatoxin.
I realize that aflatoxin is a sore subject for most of you. You have to understand that Mycotoxins are serious. They are poison, and cause cancer!We will not take Mycotoxins lightly nor should we. There is a huge risk and liability that goes along with handling this type of grain. We will continue to take grain that we know there is a market for and that we feel comfortable we will be able to "legally" sell into the marketplace. That being said we will try to have a better gameplan next year to handle it if it is a problem again in this area.
On to better subjects. The markets have been strong for the last several months. You have a good opportunity to sell in store grain in the upper 10% to 30% of the market over the last five years (see charts below). It is also a good time to get a marketing plan around for 2013 crops if you haven't already. The markets are showing you some pretty good opportunities.
CGM is into the last quarter of the fiscal year. Even though fall crops have not been good, the large wheat crop combined with "carry" in wheat futures has allowed CGM to maintain good levels of profitability, similar to the last few years.
Three new coop members have joined CGM this year; Wellington, Mulvane, and Oberlin. Their receipts increased company size by approximately 30%, bringing total licensed storage capacity to 60 Million bushels and annual receipts of about the same. CGM will continue to look for growth opportunities that will benefit it's coop members and the farmers that own them. Thank you for your business. Have a safe and happy holiday season. COMARK GRAIN MARKETING LLC NEWSLETTER Trying to Understand the "Big Picture"
"The Big Picture" is a term that is often used but has a vastly different meaning to almost everyone that uses it. One person may think the "big picture" is what is going on in Kansas and another may think it is what is going on in the world. Here are some of those "big picture" items that I think about in terms of the grain industry. Producers are getting bigger and that trend will continue. 20% of the farmers produce 80% of the grain in our territory. Technology and science will allow yields to continue to increase. New equipment gets bigger, old equipment gets retired. Farming gets faster and faster. Space has to be available to provide safe, long term grain storage. End users need a steady, year round supply. Grain markets are global, not local. These trends are not sudden, they have been happening since the beginning and the industry has to evolve in order to keep up. New assets for the future farmer require access to capital and profits that allow the industry to pay for those capital expenditures. As you look across the grain belt, billions of dollars are being spent on structures that can handle the needs of today's production and billions more will be needed. A long and continuing process of retiring the old and worn out with new high speed facilities to keep up with high speed farming. Comark Grain Marketing LLC was formed 5 yrs. ago as part of the evolution of the industry. With grain receipts of 60 million bu., several benefits come into play. With 60 elevators in the territory, space can be more efficiently utilized under one license. A large geographic area allows for access to more markets for all members within allowable freight distances. Allows for "big picture" marketing and transportation strategies. The larger geographic area spreads out individual coop's weather risks. Hail, drought, etc. The ability to attract the best and brightest employees. Grain marketing groups are here to stay. The benefits for a small local coop far out weight the negatives and more and more coops are figuring that out. CGM has added three new members recently (30% growth) and we are seeing more interest from others as they see the financial results from coops that are members of marketing groups. A recent comment from a coop auditing firm "marketing groups have been very successful, a lot of coops are looking to get in, but none are wanting to get out". Drive across the country and you can see the "big picture", farmer owned coops have been the leader in providing storage and facilities to serve the local need. Privately owned companies have not been willing to put their capital into country facilities the way that farmers have because of historically low investment returns. So as we look to the future, there should be some changes that we see come into clear focus. Coops and marketing groups will become larger, driven mainly by efficiencies. Coop boards will slowly evolve to see the benefits of cooperation with other coops for their members or slowly dwindle away. Sufficient profits have to be maintained at the local coop in order to keep up with the leaders of the industry pack, replacing worn out facilities and investing in new technology. Farms will become larger for the same reasons. As producers grow, they need to partner with someone to provide them with the latest marketing assistance, technology, genetics, equipment and advice. There will be a slow and steady evolution of facilities to accommodate the future farmer in a more efficient manner. CGM was formed by a group of coops that were able to see the "big picture" and the results the last five years has rewarded them for their decisions. All farmer members have benefited and their local coops are better positioned today to meet the many challenges of tomorrow. Many have built storage or are looking to do something in the near future. Equities have been retired and overall their balance sheets are stronger. Coops have served their owners for generations and will slowly but surely make the changes to serve generations to come. Dave Smith
June 28, 2011 CoMark Grain Marketing Newsletter
Wheat harvest has come and gone. Harvest was much better than expectedin both quantity and quality. Overall, CGM took 90% of an average wheatcrop. Expectations were around 65% of normal. The quality of the crop was also very good. The average test weight was 61.8 and the average proteinwas around 12.6%. Milling yield of the wheat was not as good as last years. The poor flour yield has to do with the small size of the berries in this year'scrop.What a difference a year makes. Last year wheat basis was record wide,and this year it got to levels much closer to normal. We had many thingsworking for us on the basis side going into and during wheat harvest thisyear. Basis is driven by local supply and demand. On the supply side, we had lower than normal supply. The demand side is where things really got hot. We had a good quality crop that buyers want. Terminals had space that they wanted to fill. The futures market is paying good carry from July forward so everyone wants to fill space to capture that carry. So less supply and more demand equals stronger basis, while last year we had adequate supply and weak demand. While we are talking about the strong basis during harvest it is a good time to bring up one marketing option that allows you to take advantage of strong basis. Basis contracts allow you to lock in basis and apply futures at a later date. For example if basis goes to -20 KC September you could lock that basis in and price the futures before the KC September first notice day (August 30). For now, basis values seem to be inverted (future basis wider than nearby basis), but since there is carry in the futures market it is about a wash on the cash price. For example: KC September is $7.50 and -30 Sep Basis = $7.20 Cash, and KC Dec is 7.75 and -55 Dec Basis = $7.20 cash. Basis contracts are the opposite of HTA contracts. HTA contracts give you the opportunity to lock in a favorable futures price while you wait for a basis to be offered or basis improvement at a later date. Hopefully by the time you receive this newsletter we will have received rain. Corn in our area is either struggling or in some cases already burned up. Beans seem to be hanging on, but are not looking good, and milo is also struggling or not coming up because of lack of moisture. I have heard several people say that they have seen it this dry, but never this early. Hopefully Mother Nature gets us caught up on moisture soon. Ryan McCoy
April 2011 Grain Newsletter
3-30-2011
The wheat in our area is looking good although we don't have a lot of moisture over much of the CGM trade territory. Timely rains will still be needed for a good wheat crop, but today the potential is there. The Western Kansas wheat crop is in poor condition for the most part. Below are the state wheat condition ratings as of 3/20/2011. The good to excellent ratings are only 27% which is well below average. Most of the poor to very poor is in the western 1/3 of Kansas.
The markets have continued to be very volatile. The Japan earthquake and tsunami broke the market very hard and then it bounced back in a few days. Overall, the prices for all commodities are still high. There are still good opportunities to forward contract grain well above cost of production if you figure average yields. I continue to urge you to look at those marketing opportunities and take advantage of those if they meet your goals.
The USDA Planting Intention report will be out before you get this newsletter. That report will continue to affect the markets as traders position themselves to their actual planting expectations. Acres will be at a premium this year with many commodities competing for acres. Corn, wheat, soybeans, and cotton are all at very attractive levels. We will see how the acres play out over the next couple of months.
How does CGM benefit your coop? CGM does all of the grain purchasing and sales for 11 Cooperatives in SC and SE Kansas. With that much grain volume there are efficiencies that come into play.
Moving forward we hope you have timely rains, good fall crop planting weather, and a safe and prosperous wheat harvest. Have a great summer!
CoMark Newsletter Jan 2011 Happy New Years from all of us at CoMark Grain. 2011 is shaping up to be another wild year in the markets. The markets have been extremely volatile the last few months and have given many opportunities to sell old crop and new crop grain at profitable levels. I want to take this opportunity to visit with you about marketing, not markets. I know that the markets will give you opportunities, but marketing is how you capture those opportunities. Every time I write this newsletter I write about how important it is to sell profitably and not to allow cash flow to determine when you sell. Are the prices today good enough to sell? That is for you to determine. There are some good resources at our website www.cgmllc.coop to help you market your grain. Go to the website and click on Producer marketing reports at the top of the page. On this page you can access USDA Reports as well as some very easy to use Producer Marketing tools that can help your grain marketing. Below is a list of information on that page.
release of the yearly Prospective Plantings report. All of these reports are good for you to look at regularly.
Plan Guidelines. This publication gives you a general outline to a good marketing plan. Some people want more detail and some want less. The marketing plan is the first step to becoming a better marketer of your production.
click on the link and select the region you farm in and what crop rotation you are using. It will give you some general production costs for your area given different yields, but I would encourage you to enter your own information as this spreadsheet hasn't been updated by KSU for awhile and your real numbers are what you should be making your decisions off of. At the end of the spreadsheet you will get your expected per bushel production cost which you need to know for the next step of your marketing plan.
Market Plan Guideline. This spreadsheet will allow you to put some of your plan on paper. You enter the information and open orders you want to enter and it will automatically figure your expected profits from those sales. It breaks down the plan into 4 different time periods that determine how much grain you are willing to sell in those timeframes (Pre-Plant, Growing Crop, Harvest, Post-Harvest). Just fill out the blue cells in the spreadsheet. It will work all the numbers you enter to figure your expected profit per acre. Folks that have used it so far have had really good things to say about it, so try it out.
minimize price risk. This is a general outline of the different contracts and tools that are offered to you by CoMark Grain through your local coop. So make a New Year's resolution to become a better marketer. Use the resources above and all resources that are available to you. It isn't easy and for some people it isn't fun, but it is worth the effort when you have a successful marketing year.
Board of Directors approves Equity Redemption The Board of Directors at it's August board meeting approved the redemption of the 1990 and 1991 revolving fund equities. This brings us one step closer to achieving our 15 year equity revolvement by September of 2011. The Board also approved an equity retirement policy that will provide for more flexibility in equity retirements in the future as we approach our revolving fund goals. |
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