Onion market reality

Quote from Butterball:

The idiot author should have compared onion prices to lean hogs. Completely different result.
More...

:confused:

The wildest swing I see in Hogs is a 100% one between end of 2009 and spring 2011... Nothing like onions volatility...
 
Quote from misterno:

here is my logic

If you take out all the non physical demand, then only physical demand stays.

If there is only physical demand in the market and no futures no options no hedges no short sale, no speculators, the only way the price can go up is when demand exceeds supply

AFAIK there has never been an instance where PHYSICAL demand exceeded supply in the history.

With all the excess supply in the market, prices will come down very close to cost of extraction.
More...

How stupid are you, I mean really? If you take out all the non physical supply, then only physical supply stays. Hence oil would be $5,000 without speculators.

This reasoning is exactly the same as yours yet mine "sounds stupid" while yours "sounds smart" because you and everybody who listens to you doesn't understand the first thing about the markets.

It's also impossible for physical demand to exceed supply because you cannot buy what does not exist (prices would just go up until the demand goes down enough).
 
All that would happen if you ban futures contracts on an exchange, is that it would move off exchange. Banks ,investment houses and producers would still trade forward contracts just like in currency. The loser would be the retail speculator.

I doubt if the price of oil would change much.
 
You must log in or register to reply here.
Back
Top