The NY Times is featuring an interesting front-page story today about GS and JPM's stockpiling and/or warehousing of aluminum and copper, some of the latter owned by hedges playing commodities. The banks have lengthened delivery times from warehouse, and so caused spot prices to rise dramatically. The mega-banks have also gotten deep into the oil chain via ownership of pipelines and port facilities. It's all based on an exemption from the Fed, soon to expire, but whose extension seems to be secure. Could the big players be eyeing other commodities? Food for thought.
The unusually heavy volume––7 mil sh on a summer Friday?––didn't escape my attention; nor did the, to my mind, equally unusual price stability (Friday's entire 7 mil sh traded inside an extremely narrow .30 range). Whatever the reason(s), a potential buyout situation, signs of supply-demand turning in favor of suppliers, the trading action caused me to override the macro reality for fertilizers and the somber views of MOS's CEO. I reversed my position.