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elcheapo
Veteran Advisor

Foul

As reported here on this website and also this story

www.nasdaq.com/article/cme-group-expands-private-trades-in-grain-markets-raising-worries-20180105006...

 

As stated, large trades will be allowed, but done "off board", but then reported at the end of the week.....

 

this is plain wrong.........and so was the reason it was done.

 

First, the reason way it was done......money.....plain and simple......the CME has not been capturing money by agreements made

between buyers and seller on some contracts.......that they say deferred month trade activity has went down, since all interest

in in the front months using computer program trade......

this statement opens two things.......first, proof from the horse mouth, that the new computer system is having an impact

on markets......one that we were told it would not.....the second, why form a policy that just makes you money, yet makes

the market less transparent ?

 

we are told we need to hedge.......in other words when we see a goo price we lock it in. Usually it is months out, or mostly a

"deferred contract".......we are now told the electronic trade has changed that, that trade is only in the front months and less

to the deferred.......folks, that hits us square in the face......how are we to do good marketing when the structure of the

trade does not reflect future contdions ?

then second, large trades in deferred months will not be reported until perhaps days after the trade.......to the cme that makes

no difference, because the trade is "front" months......but to us, that is a HUGE IMPACT.....in how we market.  The cme says

it will impact just a small number of trades.....but those small number of trades could be large trades, which could impact us.

 

And why is this being done.......as one group says, it "the transactons help traders execute large-lot orders at a "fair and reasonable" single price and avoid disrupting prices in markets with lower liquidity, such as deferred-contract months, according to cme group

 

kids, go back and read that................

 

in other words, so they can make a big sale at one price, so they can make more money.......in a open market, which we are told

this is, and according to ideas of economics, price is decided by demand.........this is a clear move to end the idea of a

open market........so a big deal is on, and that should, in fact, cause prices to go up, but since we are doing this behind closed

doors, you will not know about it, we can buy up all the grain, and do the deal, and so we don't have the "additional expense"

of higher prices.....why higher prices.....because there is a demand....but we don't want that, we want to make money.

 

and this is done in a deferred month......so say we have a huge delivery of beans in DEC of the following year.......say

this year, we have no idea this has happened.......therefore our ability to hedge is gone.......

 

This is just plain wrong, and if the CFTC does not step in and stop it, that tells us the whole story.....

 

where are the commodity groups and the FB............they should be hollering foul and contacting everyone everywhere to

stop this market distortion.

 

ok, some will say, "oh we have been doing this for years"........yes and no, yes some has been done, but they were having to

slowly accumulate contracts, as to not wake up the market that there is something up.........second, the cme, which is

tasked with having a open and clear market........just signed off to let people hid market activity, just so they can make money

 

this is a very very very sad day, and frankly, will make marketing impossible...........

 

 

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3 Replies
JimMeade
Veteran Advisor

Re: Foul

If I understand this correctly, it seems to me likely to reduce the amount of information immediately available for traders to use in making decisions about grain prices.  Kind of like meat packers owning the suppliers so the independents don't' really know what the price is.

elcheapo
Veteran Advisor

Re: Foul

Traders and farmers

I just don't understand where the commodity groups
Or FB is at.
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timetippingpt
Honored Advisor

Re: Foul

FB is at their annual party patting themselves on the back for getting the Pres to come and speak to them.   :-)

This move benefits a great many of FB donors...possibly...it will be impossible to tell since it is all in the dark.

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