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Strategies & Market Trends : John Pitera's Market Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: Hawkmoon who wrote (9215)	3/30/2008 10:05:46 AM
From: Jon Koplik	Respond to of 33421

Another angle on the "basis" (spread between spot price and the first futures contract) going "wacko" : In a month when futures "went off the board" at a price 55 cents over cash, any farmer who (prudently) hedged his or her production by shorting futures against their crop ... lost that 55 cents a bushel. This would make farmers (and the bankers who are thrilled to see farmers hedge their crops) ... want to take these idiot "long only" / "everyone knows there's inflation" / "let's all get rich with commodities" - type entities (such as CalPERS) (California Public Employees' Retirement System) ... and throw them under a piece of (operating) farm equipment. (Or, maybe just a pile of manure.) Jon.