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| The USA has the best & most accurate ag reporting system in the world.
I AGREE-- DP Programs feed the marketing channel with ensuing pressure on prices BUT LOOK IN THE MIRROR OF THE LAST GENERATION OF PRODUCERS.
I designed some of these programs. WHY? Because ag producers DEMANDED them!
Ag producers DID NOT WANT TO HEDGE FUTURES....THEY PREFERRED THEIR LOCAL COOP OR OTHER MERCHANT performed the hedging. AG PRODUCERS DID NOT WANT TO MARKET. Ag Producers wanted to produce only and leave the marketing up to others....you now have the consequences.
The production of grain is a huge business. Producers need to have sufficient storage to capture as much basis as possible....it is not rocket science. However, the grain business IS MARKETING NOT STORING FOR YEARS.
I remember the Grain Storage years.
Let's face the true facts. Grain prices earlier Inflated way beyond intrinsic value.....damaged the feed consumption market....This is simply common sense.
Ag has witnessed inflationary forces....times when prices advance without seeming fundamental support....WELL..in reality, fundamentals do count. Gann is dead. Fibonacci is dead.
Crude oil is near historic levels and we EXPECT ETHANOL TO ROCKET HIGHER FROM THESE LEVELS?
I am now working on Chinese ag....China is stockpiling....will they be in the market next year? I subscribe to a very detailed China data source.
The public, world wide, cannot pay high taxes (headed higher), high fuel, higher living costs and have residual funds to purchase quality food. It is a simple equation.
I have watched this cycle for 50+ years......we have gains in technology & weather is the key & regardless how hungry people become...THEY MUST BE ABLE TO PAY FOR THE FOOD.
Edited by SeniorCitizen 1/12/2010 15:19
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