And some of those farmers speculated last summer that they should hold onto that wheat, corn, etc. in those silos to get that better price as they saw the slope of the market get steeper. They ended up being very sorry for that move.

So I get your point DL. Well put.

I certainly don’t have this all figure out, no doubt.

“…whether the markets are being driven by true supply and demand or whether they’re primarily being influenced by speculation about future supply and demand… …farmers have long complained about it”

I’m sure that there are more than a few speculators among the farmers. They trade commodity futures….. and they have those huge grain silos which can be used to take product off the market.

If clawback reads that, I don’t know what he’s liable to do….

Yes, whether physical or futures, everyone is in the game as a speculator. This contango market is setting the speculators up for a huge fall. I won’t give any price predictions because it would be foolhardy to think that I know where it is going, but I wouldn’t be buying oil here.

OT: Has anyone seen that the f^cking FR is hiring a lobbyist? UFB. So much for their supposed independence. This fact alone should put any FR apologist on notice. These bastards have always been about power – the power to control money.

There’s not an easy answer to that. And it’s not new by any means. Farmers have long complained about it in ag commodities, I believe.

Maybe it’s just being exacerbated in our times by the liquidity that’s been pumped out with no real investment demand (i.e. there’s lot’s of excess capacity in manufacturing, retailing, and real estate right now) and really low bank reserve requirements still; i.e. lots of leverage at play.

In the case of the oil market, you’ve got to include other participants. For example, people who rent out vessels to store oil. Or the refiners who have a lot of storage capacity (I assume) and who take oil off the market in the hope of a price increase. The most important speculators of all in the oil market (IMO) are the producers themselves. Futures traders have a role, but it is indirect. Absent those who can take product off the market, I don’t think that futures traders themselves can affect the spot price of oil.

Re: “Speculators”

This is a favorite subject of mine. Briefing.com gets it right when it refers to “market participants.” That’s really what everyone is. Some people day trade, some people swing trade. To people who call themselves “investors,” the day traders and swing traders seem like speculators. I tend to look at everyone who cannot directly manipulate the market (e.g. primary broker/dealers and market makers) as a speculator, since it’s a ca$ino.

I think that for anyone trying to answer that question, it is important to attempt a detailed and thorough definition of the term “speculator”. Last summer, we heard this term being used over and over by economists, MSM journalists, politicians, and by contributors to this blog. Not once did I see anyone attempt to define the term.

In my opinion, if you take out all of the people who have the power and the means to limit supply, then the remaining “speculators” cannot influence the spot price of commodities. Of course, these people can only be “taken out” in a hypothetical sense.

If you make an earnest attempt to provide a detailed definition of the term “speculator”, I think you’ll then have the answer to your own question.

Is it inflation, or just speculation pushing prices up?

Or is there a difference? It feels like there ought to be, but I’m not sure.