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Non-Cattle Specific Topics
Coffee Shop
Speculators are necessary
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<blockquote data-quote="Jalopy" data-source="post: 799925" data-attributes="member: 7856"><p>I really appreciate everyones insight. This has a great deal of impact on our commodities whether we like it or not. </p><p>Everytime the market gets hot and goes higher we as producers have an oppurtunity to take some of that profit out by hedging or forward contracting and letting the speculators carry the risk. </p><p>As an example when corn jumped to $7/bu in July/August of 2007 the futures jumped also. And in January of 2009 I know of a couple of producers that were delivering corn on forward contracts at $6.10/bu when the local cash price was $3.35. The speculators may have caused the jump but producers took the money to the bank. I know the local coop that bought the grain had that grain protected with future contracts. So who if not the speculators "donated " this money to the equation?</p></blockquote><p></p>
[QUOTE="Jalopy, post: 799925, member: 7856"] I really appreciate everyones insight. This has a great deal of impact on our commodities whether we like it or not. Everytime the market gets hot and goes higher we as producers have an oppurtunity to take some of that profit out by hedging or forward contracting and letting the speculators carry the risk. As an example when corn jumped to $7/bu in July/August of 2007 the futures jumped also. And in January of 2009 I know of a couple of producers that were delivering corn on forward contracts at $6.10/bu when the local cash price was $3.35. The speculators may have caused the jump but producers took the money to the bank. I know the local coop that bought the grain had that grain protected with future contracts. So who if not the speculators "donated " this money to the equation? [/QUOTE]
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Speculators are necessary
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