The interesting thread below got me to thinking about the marketplace. This is not about specific marketing of this crop, but rather the overall way our system works.

Where are prices for our crops set? In the cash market or the futures market?

I would guess most people would say in the futures market, and I would not argue that they were wrong. I think that is likely the case. But is it the correct place for price to be set? Not at all. The futures market came about as a means for producers and consumers to hedge their needs, thereby making a more fluid marketplace. The futures market was never designed nor intended to be the determinant of price level for a commodity. The price level is set by supply and demand, and the futures market is a derivative of the cash market.

But, in my opinion (and I could be wrong, this is just my mind wandering), we have the cart ahead of the horse. The derivative is the tail trying to wag the dog. And there are vested interests that benefit from maintaining this status quo.

With three dollars positive basis could we be seeing the cash market push back? Is it telling us the futures derivative market is/was wrong? Does supply and demand really determine our market prices, or does speculative derivative markets?

Manipulations can last (derivatives altering the real market) for a time, but they can never last forever. Eventually fundamentals win out and supply and demand are the end game.

So is the basis wrong (the cash market), or were futures wrong?

I think maybe the real market is pushing back. The dog is trying to get back in control of his own tail.

I don't know if any of this thinking is right and am not trying to get everyone else to think this way. But I think it is worthy of discussion. Where are market prices really set??????

John