|
Ontario's middle east | When farmers sell to a basis trading commercial , the commercial sells futures. When the commercial sells to an end user (domestic or overseas) they buy those hedges back. It is important to note that it doesn't have to happen in that order. If the exporter is seeing a basis opportunity because a buyer likes the lower flat price for instance, the commercial can establish a flat price with that buyer but he immediately turns around and buys the board. This hedges his position and let's him pay the bigger flat price to Mr Farmer if and when the board rallies. I commented last week that the growing commercial long position is a good sign, endusers somewhere are buying. Hope that makes sense. | |
|
CFTC #'s Frosty's Style
