Death comes to us all. Life's but a walking shadow | If they were trading ag commodities, of course, they made money. It's the same pattern every decent crop year. There's a reason why they all bailed out of the rally on June 20th, And then when they were reasonably sure there would be enough precipitation to make a crop they proceeded to sell the crop. Why because they know that come harvest a certain number of producers will haul a certain percentage of the crop to town and the grain merchants will need shorts to hedge their purchased grain.
The sun comes up in the East, the swallows return to Capistrano.
Frankly, the reason why this works so well for them is two things. First, it's a dependable pattern, they just buy until the meteorologists tell them to sell and then bang. And they don't have to wait until the rain has arrived, they sell when the probabilities are high enough because they know they can reverse in a millisecond. And second, when the merchants hedge their purchased grain they have no incentive to argue the price because their whole business model simply revolves around their margin whatever the price. You might say that in effect the merchants sell out the producers interests for pennies.
And despite what some people say about "tin cans", those "tin cans" are one of the best ways to subvert the "Funds" program. If not enough producers sell at harvest, the Funds will be forced to liquidate their Dec contracts in Dec, other traders can run up the price and reduce the short sellers' profit. (Of course, they can alway roll their contracts but every time they have to come back into the market they expose themselves to risk.) |
Big Traders Made MONEY Last Quarter Goldman
