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I have been looking at corn charts today and noticed something on the monthly chart. The last monthly bar in 1997 has a volume of 5.7 million and the next monthly bar in 1998 has a volume of 1.3 million, then the volume stays low for more than 7 years. Open interest dropped by the same percentage. What happened at the end of 1997? Was there some kind of regulation policy change? Is my chart data just screwed up? It either looks like a mistake or there was a major change that effected volume for a big way. What was it?
just checked other grains and the phenomenon is in soybeans as well, but not wheat.
Can you help answer these questions from other members on NexusFi?
I'll read through that but I doubt it will satisfy my curiosity. It was like a light switch from dec '97 to jan '98. I have another pic below to show how odd it looks. I was the lowest volume since the early 70's by far. My weekly chart shows it happening in one week. It's like 60% of the positions got out before Christmas and didn't get back in for ........ 8 years.
yeah. It's talking about an event prior to the volume drop. It was published in August of 98 and probably written several months before. It doesn't address the question I am posing.
I mentioned in my first post "I guess..". So no perfect answer from my side.
And yes it would be nice or better if some one who knew stepped in and gave us the answer right away as I'm very curious myself.
But as long no one steps in I just go out and explore and came up with this document.
The document doesn't give us an answer but does give a clue. It describes the high degree of speculation because of the droughts / scarcety.
Isn't higher volume associated with speculation not an reasonable assumption?
The sudden drop is a mystery. I can only assume that demand was completely gone after period of hyper inflation. Like markets have cycles of expansion and contracting.
