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Mysterious discrepancies in grain prices baffle experts

 
ponderer
User ID: 402176
United States
03/28/2008 11:49 AM
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Mysterious discrepancies in grain prices baffle experts
anyone know why this is happening > 2 prices , same product.
Economists note there should not be two prices for one thing at the same place and time. Could a drug store sell two identical tubes of toothpaste, and charge 50 cents more for one of them? Of course not.

But, in effect, exactly that has been happening - repeatedly and mysteriously - in markets that set prices in the United States for corn, soybeans and wheat. And even economists who have been studying this phenomenon say they are at a loss to explain it.

Whatever the reason, the price for a bushel of grain established in the public derivatives markets has been substantially higher than the price of the same bushel of the same grain at the same moment in the cash market.

When that happens, no one can be exactly sure which price accurately reflects supply and demand in these crucial commodity markets, an uncertainty that can influence food prices and production decisions around the world. Prices set in the U.S. markets are used as benchmarks for grain prices globally.
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