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Uncertainty, Weather And Crop Markets

Uncertainty and weather risk can provide pricing opportunities for grain producers.

We seem to hear more and more chatter concerning grain prices the closer we get to harvest. Of course, we can understand this because this is when many of us start to calculate what our revenues might be for a year’s work. However, we may be missing opportunities to focus on better prices. Consider your buyers and their needs. O.K., not only your specific buyers, but all the grain buyers that work together effecting price levels. Supply risk for buyers is when farmers are not decided on what to plant for the upcoming season. Prices tend to be highest at this time of year. Maybe we should consider securing a portion of our annual revenues at this time of uncertainty for our buyers? Typically, the March – June time frame offers season high prices for corn and soybeans.

Many of us can recite today’s market close. Can we also recall the entire price range of these same commodities? For example, DEC 2013 corn is trading at 468 (when this article was written.) Do we also discuss that this same corn has traded from a low of 401 to a high of 665? In addition to marketing our grains during this management-intensive time of year, we may also be able to market more of our grain at other opportunities. We could find pricing levels we are comfortable with for our 2014 production well before we actually harvest the crop.

Not being able to completely resist predicting the future (which you may recall I believe is impossible) I relay to you some marketing information I cannot help but consider: Weather Trends International is projecting September in Iowa and the heart of the Corn Belt will be the warmest in 8 years with little threat of any early frost in September. September Iowa temperatures will trend 4+ degrees above average with rainfall continuing 36% below average. October will turn cooler and continue to trend slightly drier than average favoring a quick harvest. The first major killing frost/freeze in the Western Corn Belt is likely around the 23rd of October but this will have NO IMPACT on the crop at that stage. The Pennsylvania region is having a very cool start to September but a warmer and dry latter half of the month will also benefit the maturing process and allow for a great start to harvesting. The first major killing frosts and freezes in Eastern Pennsylvania are likely the latter half of October.

For free location specific long-range year-ahead daily forecasts check out their free web site or mobile apps wt360 Lite (free). Automated weather alerts on any weather condition including freezes can be set up free of charge on their web site.

Source : psu.edu


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