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Middle Tennessee | One way a commercial might trade in a well- or over-supplied environment...Hold physical and sell deffered (the carry)...Once "deferred" becomes spot, pressure the cash market prior to the delivery with the threat of delivery, tanking the spot futures contract, where they hold short positions from the carry sale...After they scared all the longs out of the market, scoop the bushels back up and put them back in the cave or however it works, make the market bid aggressively for physical movement, and when that process is done, resell the futher out deferreds. It's probably not accurate in detail but I see some version of this cartoon at work in the wheat market through delivery period. Hell, Look at how Nov. beans acted in a carry market through delivery. | |
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Wheat
