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NW Indiana | Yes. Merchandisers work on basis, so they are not speculating price(well shouldn't be). So when a farmer wants to "sell" the merchandiser goes to the board and sells contracts on the cbot. That grain could sit in their bins for months without price exposer to the market(still have basis exposure if they don't have it covered). One day an enduser says "hey I want to cover some needs and buy some soybeans" so they call up this merchandiser. At that time the transaction takes place giving the exposure to the end user, meanwhile the merchandiser buys contracts on the cbot to cover their previous short positions. In simple terms when farmers go to sell commercials are shorting the market to cover, when end users go to buy commercials are buying to cover. Basis is a whole other beast.
Edited by IN555 12/4/2018 14:04
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Are sales annoucements coming?
