Government policies related to taxes and inflation, coupled with USDA projections for corn prices and other factors will make for years of violent market swings, says Bob Utterback, Farm Journal economist.
During a seminar at the 2013 National Farm Machinery Show, Utterback explored market trends and offered recommendations for corn, soybeans and cattle going forward. Watch his complete remarks in the video below, then read on for an overview of his suggestions.
- Plant maximum acres possible
- Buy crop insurance
- Sell December 2013 corn at $5.80 to $5.95 via deep-in-the-money puts rather than cash or short futures
- Hold to fall, then take profits and capture carry storage return
- Plant only what is needed
- Focus on selling November 2013 at $13 to $13.50 in long deep-in-the-money puts
- Sell beans off the combine
- Expect $125 to hold most of the year; could see historic high prices. Very limited price protection suggested for 2013
- Start prepping for downside risk exposure in 2014 when breeding herd expansion kicks in
- Start working on developing an aggressive multi-year feed-buying campaign each fall and focus on locking up bonds for interest rate exposure
Read more of Utterback's marketing insight with is Farm Journal column: Outlook.
See Farm Journal Media's full coverage of the 2013 National Farm Machinery Show.