Or they simply are unwilling to bear the risk. To them, it's a risk, the prices the know are the prices they expect and it would be a gamble to predict otherwise.
If there is anything I notice it is that people and are absolutely terrible at predicting future demand.
Isn't futures designed specifically to allow for this kind of hedging? eg. everybody thinks that food prices are going to the moon next harvest, but farmers don't want to pay the risk, so futures allow farmers to lock in prices now and not have to worry about a price crash come harvest time.
I was precisely thinking about futures when typing the post. That is why I did not say "the economy" and said people instead. But I do not understand them so I tried to steer away from them.
Truth be told... I don't know. I wonder how futures look right now. I wonder how many futures are being traded in the agricultural domain, I wonder what is their actual, functional impact on the market. I simply admit my ignorance here.
Comments
Or they simply are unwilling to bear the risk. To them, it's a risk, the prices the know are the prices they expect and it would be a gamble to predict otherwise.
If there is anything I notice it is that people and are absolutely terrible at predicting future demand.
Isn't futures designed specifically to allow for this kind of hedging? eg. everybody thinks that food prices are going to the moon next harvest, but farmers don't want to pay the risk, so futures allow farmers to lock in prices now and not have to worry about a price crash come harvest time.
I was precisely thinking about futures when typing the post. That is why I did not say "the economy" and said people instead. But I do not understand them so I tried to steer away from them.
Truth be told... I don't know. I wonder how futures look right now. I wonder how many futures are being traded in the agricultural domain, I wonder what is their actual, functional impact on the market. I simply admit my ignorance here.