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Marketing Decisions Will Be Critical in 2013

Jim Riley

Will Indiana see a second drought? Will the economy recover or nose dive into recession? These and other uncertainties will make marketing decisions difficult in the new year. Jim Riley, with Riley Trading, says timing will be the key to success. For example, he is not recommending corn farmers lock in prices yet, “I am not recommending that my clients lock in any of their 2013 crop yet. I still think there is a likelihood we are going to see corn move back up toward the $6.50 level.” Riley says the market is in a trading range and corn prices will trade between $6.00 and $6.50 in 2013. On Thursday, the December corn contract finished just under $6.  The Brookston, Indiana commodity broker says soil moisture will be another factor that will impact corn prices. While western Corn Belt states remain very dry, Riley says Indiana is not out of the woods, “We have replenished our top soil but is still short on subsoil moisture.” He feels the market will begin to factor this into prices this spring.


While Riley says some of his soybean farmer customers have locked in soybeans, he is recommending holding off until November beans move back up to the 13.50 level, “That is going to depend on what the South American crop does and what the acreage mix turns out to be here in the US.”  November 2013 soybean futures have moved lower this week and traded in the $13 area on Thursday.


Riley is recommending that hog producers take a look at doing some hedging soon, “Hog prices are hovering around that $100 mark so it would be a good time to lock in some corn and soybean meal and hedge some $100 hogs.”  Overall Riley sees a more profitable year for livestock producers in 2013. He sees the livestock sector as being a good source of demand for US corn in 2013.


In addition to the normal market factors like demand and weather, Riley says monetary issues will need to be watched closely in 2013.  He told HAT that, if the US takes a dive off the fiscal cliff, it will have a market impact but that impact will be short-lived, “There is still going to be world food demand that will drive the markets.” The European debt crisis was a market factor in 2012; Riley sees it being less of a factor in 2013. You can hear Jim Riley’s daily market commentary on the HAT web site and the Hoosier Ag Today Smartphone  app.


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