On Jan. 11, USDA issued a wealth of information in its reports on the final estimate of the 2012 crops, the grain stocks we have on hand, how it is being used and what will be left when the 2013 crop is ready for harvest. But developing a marketing plan for that, in the face of uncertain weather will be a challenge. What are those weather facts that will be so critical?

The major headline from the USDA's Supply and Demand Report (pdf) was that corn was being fed to livestock at a greater rate than the market anticipated. Another bullet point was that corn exports will fall below one billion bushels for the first time since the 1970s, compared 2.5 billion bushels just a few years ago. But corn carryout at the end of August will be as low as it can get.


USDA projects season average prices for corn at $6.80-8, and $13.50-15 for soybeans. We are in the low end of that range now after spending most of the marketing year so far in the upper end.

Much of the consensus among those watching the grain market is that the 2012 crop corn and soybeans will have a very tight and volatile cash market with some spot shortages and a strong basis. 

As the South American crop gets closer to harvest, November 2013 crop prices will continue to fade with the potential for lower prices than last year when the crop insurance guarantee is established in February. While beans will be in demand, overall prices will be lower.