Posted 11/13/2012 00:14 (#2694294 - in reply to #2693487) Subject: They can be bought and priced many way's
Red River Valley
They can buy them optional origin priced by basis levels only, they can be priced x-amount over cbot price- they can be bought by an enduser for a flat price with seller choice from where they orginate. they can be hedged on the Dalin (china) board of trade.
they can have a preset cancellation clause, they could be bought by speculator in china with no Intention of taking delivery unless they rally big time.
could have been bought by China crusher and cross hedged against crush spread over there and with crush margins negitive they unwind all and still make money after paying cancel fees.
and yes they might just be very unethical buyers who tell sellers go pound sand, but when you are the only game in town you get more rope so to speak.
the thought that China had a never ending demand for soy at whatever price could be dreamed up drove us to over 17.50 for beans and the thought that they will not take a bunch of beans can and might drive us to $12.00 beans maybe even $11.00 so one has to keep ones head about them when either end of that range showes its head.
When your whole market is based on one player than that player almost always gets to deal the cards.