Is USDA In Arrears? Keep Marketing Options Open

May 11, 2010 12:50 AM


Linda H. Smith, Top Producer Business and Marketing Editor
Jim Bower of Bower Trading thinks there are market factors in play that USDA has not acknowledged in its May Supply/Demand report. "Sometimes what is important is not the numbers in the report, but the market reaction,” he says. "This report initially declared negative yet trading has been rather positive.”
Bower believes the global numbers may the highest we see for these crops. "We may have gotten the U.S. crop off to a good start but it is a far cry from being made,” he says. "There's also a good chance the Chinese crop may be smaller than the 166 mmt USDA used, and purchases may also be better.
"I'd use marketing strategies that retain flexibility,” says Bower. "Leave delivery options open and keep a close watch on basis—I think there will be some interesting basis situations to take advantage of.”

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