02-19-2013 12:08 PM
Marketing our 2013 crops is going to be very difficult if the guy below is correct. To be safe, if you plan on selling say 33% of your production if we get a spring rally in prices, I think you really need to have an action plan to cover these 33% of sold bushels with some sort of upside protection. Probably the best conservative measure is the use of options. If not, you could end up like some guys in my area that forward contracted 2012 corn at the $5.50 level and totally missed out on the short time period when cash corn in NC Iowa was $8+. That's a $2.60 a bushel loss of revenue, that is painful.
Forecasters Worry About Another Drought In 2013. I'm a little more optimistic now, after watching the maps and trends carefully (more southern moisture from the Gulf of Mexico is finally reaching the Midwest after a long dry spell since last autumn). Here's a snippet from a story at indystar.com: "...As the spring planting season nears, forecasters have expressed concern that much of the Midwest could remain starved for moisture, though they caution it’s too early to safely predict the weather several months out. The Midwest could see a late-summer increase in rainfall, but the relief will be much too late to help farmers, according to one prediction from a University of Missouri researcher.“The continuing conditions really look like they’re setting up for a very similar level of drought in the Midwest and West,” Roger Pulwarty, a director with the National Oceanic and Atmospheric Administration who focuses on drought, told lawmakers on the Senate Agriculture Committee last week..."
* the latest Drought Outlook from NOAA is here.
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