- Location
- Devon
Hello Farmers, I'm a Day-trader in the United States.
We just had 2 hurricanes and it got me thinking about Gas prices.
And that made me wonder about prices of Commodities in general.
I posted my thoughts and questions on a Trader's Forum:
Then I realized, for me to truly understand, I need to ask Farmers - so I just signed-up here today.
Hello Farmers. Thank-you for everything you do every day.
(My grampa was a 99 acre farmer, so I know it is the hardest work on Earth - he died in his 60's)
So here's my questions:
When you watch the news on TV, do events on the opposite side of the world cause you to say, "Oh boy! That's going to affect my prices." ? ...for example... If you live in the U.S. and there is an outbreak or disaster in China.
Or, do you blame Traders for the prices of Commodities?
Do you ever say, "I wish they would ban Traders from the Market. They always mess-up the prices for stupid things happening in China." ?
Thanks for any insights.
(by the way, I do not trade Commodity Futures or plan to. I'm just curious.)
I would say I'm always on the look out for trends. Due to being at the bottom of the production line, we are generally to late to hear of an event and too tied up in the long term to make many immediate decisions.
We absolutely rely on futures to manage finances of sales and purchases but it does hurt to be dragged through the sh!t just because traders decide to gamble on a commodity, risking our pension funds just to try and earn themselves a bonus.
You only need to read a few threads on this site to realise how it is pretty impossible to make any predictions in farming. Any reasonable prediction is undone by the fact that so many have come the same conclusion.
For example,if there is clear evidence of a shortage of milk in 4 months time;
Many farmers will try to increase production for this period and at the same time, processors adjust their storage and processing to make more liquid available. Meanwhile the supermarkets have sourced extra in case of shortfall.
The primary issue is the lack of 'slack' in agriculture. You can't just switch on an extra line, employ a few staff and double production. Most land, buildings etc. are in use. It would be very difficult to have a farm on stand-by to stock when the 'time was right'.
I wonder if actual commodities are really traded to the same highs and lows as the bits of paper. Surely this is often moving money when in practice the quantity of product moved at the highs and lows must be comparitively small?