What's This, A Bullish Grain Merchant?

Grain merchants are a dour doom and gloom lot normally aren't they? Nobody wants it, we can't give it away etc, etc.

Which makes it all the more surprising when they finally do turn bullish. They weren't bullish at GBP100/tonne, but they are at GBP170/tonne, what's going on?

A farmer I know emailed me yesterday to say that he's got his new crop wheat and OSR safely in the barn. He's luckily not sold it all at the bottom of the market, so he puts a call into his regular two merchants to see what price they'll offer. He hasn't told me who the two are, and I haven't asked.

He's surprised to hear both effectively say "don't sell it, it's going up."

He's only been growing wheat for forty odd years, he's waited all this time for a bullish grain merchant then two come along at once.

Why would they do this? Could it be:

a) they think that the market is going higher, and are trying to do the guy a favour.

b) they think that the market is coming down, and are trying to stitch the cocky little rascal up. Tee, hee.

c) they haven't got a clue which way the market is going, and frankly don't really care. I mean who can call this one, they aren't Paul McKenna are they? What they do know though is unless they can find a physical buyer at these levels and don't want to lift a leg, buying it means hedging it with a sale on the futures market, where every ounce of cash they've got is already on deposit to cover margin calls on losing sales waiting to be unwound.