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<p>[QUOTE=&quot;justafarmer, post: 1325129, member: 3926&quot;]Certainly futures (paper) can detach from a commodities physical (cash) market. Call it anecdotal if you want but I can give you an example of such as case happening not long ago this year. Back in early June rice current futures was trading at around $14.80 cwt on the board while the cash price being offered for physical delivery to the big boy’s facilities was just over $9.00 per cwt. </p><p>Why such a big spread you may ask – well the big boys just didn’t want to enter into any new contractual obligations at the time. The flood on the river had taken a significant amount of elevator capacity off line. Even after the flood waters receded most of the capacity had to be rewired. Also barge traffic was backed-up due to the fact the Mississippi River was closed into New Orleans for a period of time. So empty barges were also in short supply. The winter wheat crop was going into harvest and what elevator and barge capacity that was available had to be diverted here to cover and handle their standing contractual obligations for this crop. So basically the cash price you were receiving for a new contract reflected a normal profit plus the cost of default of a standing contract plus a great big nuisance fee.[/QUOTE]</p><p><br /></p>

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