Futures depend on markets
The two top factors influencing 2013 crop markets will be the weather and potential for rebound in demand, which diminished last year with high prices, which were driven by the drought, Daniel O’Brien told growers at the Agriculture Information Meeting in Marion.
“It all depends on what the market does,” the Kansas State University grain expert said. “If we continue to have a high demand, then we’ll have to produce enough to meet it. If that changes, though, who knows what we could see as far as prices are concerned. The projection just shows the expectation for the market. If the demand varies, you could see different results.”
O’Brien said growers can start to see prices dropping in 2013, but said that could change if the demand or supply shifts from the expected projections. Using graphs and charts, O’Brien showed area crop farmers how the market right now is unpredictable, and suggests that growers to either wait to sell their crops until there was some more insurance or to divide the equity that they have.
“Don’t count all of your chickens before they hatch,” he said. “Sell some of your crops now if you can, but also hold some back and sell in a couple months when we might have a better idea what the futures look like down the road.”
He said a lot still depends on how much wind and dry wind the area receives in the next coming months.
“We had some good moisture,” he said. “But it might not be enough if we have an especially dry season again this year.”
But that’s not all farmers have to watch out for. O’Brien said farmers should expect to see more global competition — and that growers should pay attention to what is happening to the crops in other countries, like Brazil and Australia. On a related note, he said if projection holds out for this year, Brazil will surpass the U.S. in soybean production and become the No. 1 soybean producer in the world.
“If other countries have a poor yield, then the prices are going to reflect that,” he said. “We’re not just dealing locally. We have to look on a global scale as well.”
Wheat currently sits at $7.40, as of the close of the day on Monday. Corn futures sit at $7.11 and soybeans at $14.79 for the May market.