The large funds deal in volume so they can sell and buy to influence prices. On top of that there may be more paper futures out there than actual product. If that's the case things will appear plentiful in the futures market while their are shortages occurring down at the street level. A test for a futures market is for a large number of people holding a futures contract demand delivery when it matures. If there is not enough product this would cause a squeeze as there wouldn't be enough commodity to fill the contracts. The markets can mess with the ability to do this by setting a minimum value you can demand delivery on. This is how they manipulate the metals market as well.
The large funds deal in volume so they can sell and buy to influence prices. On top of that there may be more paper futures out there than actual product. If that's the case things will appear plentiful in the futures market while their are shortages occurring down at the street level. A test for a futures market is for a large number of people holding a futures contract demand delivery when it matures. If there is not enough product this would cause a squeeze as there wouldn't be enough commodity to fill the contracts. The markets can mess with the ability to do this by setting a minimum value you can demand delivery on. This is how they manipulate the metals market as well.
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