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Farmers put in the sweat equity and others try to cash in.... who cares if the investors lose money.....
Last spring the farmer put in his crop with higher than ever fertilizer cost, higher than ever fuel cost, and yes higher than ever seed cost. Than higher than ever spray cost and yes fuel was high all the way thru most of the harvest we saw a lot of fall rain which meant the grain had to be dried with high propane prices. How many dollars do you think they are losing this fall with low grain prices and tough loans. That stock seller lost a little the farmer could lose everything.
If a farmer failed to lock in their sales price last spring, jozele, they have only themselves to blame. One of the reasons the futures market exists is to provide farmers with a tool to manage risk. They are not subject to the boom/bust cycles of the commodity markets if they properly hedge themselves.
Investors used to buy stock for shelters, some short term gain or know that something was a safe long term bet. Content to make a reasonable amount of gain patiently waiting months or years. Now, you got a way to try and make a quick steal. Following advice from those such as Ivan Boesky who once proclaimed "healthy greed" as a high virtue. This wealth in reality does not exist. While a few enjoy tremendous gain most end up a victim of such perpetration in higher prices. This manipulation of markets is becoming a more prevalent theme of our time and is reflected in some of the latest movies including the last two 007 films. That said, There seems to be enough to go around in this world today...and even enough to spare, but we see how easily things can become lopsided as with food, to the degree of much suffering.
If a farmer plays the futures as you say and some do then like last year when the price went way up to around 20 for wheat they were locked in at 6 or 7 even thou other prices had allready gone up. If they do not get enough grain to fulfil their end of the market they might have to buy higher priced grain to sell at a the future price. Of course if the futures would loose they would be forgiven.
Back to when wheat was real high. Some farmers that had grain to sell could not sell it at the higher price because they were told that they had more future grain to bring in and did not have room for their grain so they had to wait tell the prices started to drop again. And of course those that had bought futures only got their 7 or so dollars while the investers made about 13 dollars.
So the Futures are not the perfect solution either.
I've got nothing against this guy, but it is obscene that this guy can make this kind of money basically gambling on our food supply.
It is the same with the stock market and short selling.
Why should someone make money betting that a stock will go down. I wish all the talking heads on Cnbc,etc would explain this simple concept,and how it is "good" for anyone except these people.
These kind of things are what have lead us to the current situation,
This is why we shouldn't allow speculators to play with peoples lives. The stock market isn't much better.
Christ drove the money changers from the temple. I would like to turn him loose at the Grain Exchange or the Chicago Board of Trade and watch the fur fly. Those thieves produce nothing, just shuffle paper and pixels in cyberspace. Supply and demand have been supplanted by FEAR and GREED
The real purpose of these exchanges was to more even out price.
Farms either could buy or sell their commodities.
i.e. corn, wheat, fertilizer.
Grain companies and food producers could hedge
purchases or sales.
This market work great as big commodity companies could make huge sales to China, Russia others and hedge to lock in a profit.
(Even the biggest commodity company couldn't take the market risk to not hedge)
Farmers could enjoy some degree of price stability. Not cheap prices in September - December and high prices in April - May.
This market had worked great until the big hedge funds and some very greedy individuals wanted to play the market.
We do need to get back to some basics in our markets and some more rules that let these commodity markets work the way they were design.
What has capitalism ever done for use anyway... Except provide the incredible standard of living that we as a nation enjoy.
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