Conan the Farmer - 2/10/2017 02:15 Theory/Question for the board: The reason that prices rise when farmers are sold out is two-fold. Firstly, there are far fewer new producer shorts entering the market making less of an anchor. Second, the commercials who hold short positions from purchasing farmer's grain over the following weeks and months short cover as they deliver or use the grain, thusly making the market rise as they purchase futures. Wouldn't that be the reason prices rise? Doesn't that explain seasonality?


Conan: Would not disagree with your reasoning, but when I think of the volume of trade on the board, makes me wonder if farmer sales have much impact on anything but basis. IE I believe it was around April 23? Single largest volume day in CBOT history 850,000ish soy contracts as I recall. If my math serves, isn't that nearly entire USA 2016 production in one day by volume? The number stunned me.

Edited by Frisky3208 2/10/2017 04:02