Chapter 781 I Was Dumbfounded
786. Dumbfounded
What no one expected was that this group of international grain merchants who had always been successful had "hit a wall" in China. This time, facing China's "endless" grain reserves, they were dumbfounded.
According to their calculations, China's reserves are about 350 billion Chinese yuan, and will not exceed 500 billion at most. However, after they acquired for a period of time, they found that their money was getting less and less, and China's market was as stable as a mountain.
All of a sudden, everyone was anxious. There was no way they could use the high leverage of banks and private loans. They couldn't bear the interest if they kept dragging it on, not to mention that there were still 3 months before the futures delivery.
By then, they would probably have to sell off so much grain in their hands at a loss.
International grain merchants naturally didn't know that China had a tradition of "food and grass first before troops moved" since ancient times. When it comes to grain reserves, China has never been weak to anyone, and China can afford it.
But this group of international grain merchants can't afford to waste time. In order to fully control the grain price this time, they have used 5 times leverage, and the daily interest is calculated at over 100 million US dollars.
Not to mention that there are still 3 months before the delivery period. They not only have to prepare warehouses to store grain, but it is also a very headache to sell so much grain.
If the international grain merchants are now in a headache, then the international giants who are now participating in the long position are bleeding in their hearts.
They took the real money of their foundation to participate in this long position. If the futures market does not rise for a day, they will be "cut meat" day by day. The loss is not a little bit.
Especially now that more and more people are starting to short them, this group of people have to continue to increase their positions to keep themselves from being liquidated, but the funds invested every day are not a small number.
And now even a fool can see that Asia is a hard bone to chew, and now more and more people are starting to short them in the opposite direction.
The merchants in Southeast Asia are the most ruthless. They even keep selling the grain in their hands at all costs, causing the price in the futures market to fall again and again.
Don't think they are doing good things. This group of people have already used the money they cashed out to invest in the stock market and started to short sell. Within one day, the grain futures market was hit by them by 50%.
Even the royal families in Southeast Asia are secretly short selling these people, which makes these international crocodiles very angry. Southeast Asia has always been regarded as their "backyard", but now, the backyard is on fire.
The next day, a private foundation in the United States was the first to announce that it could not hold on and directly announced a liquidation. At one time, more than 6 billion US dollars of funds were quickly divided up by the short sellers.
Other international crocodiles saw that the situation was not good, and they did not care about other things and began to short sell. This made their former "allies" start to jump and curse.
There is no way. Going long now is a dead end. There is no need to die together. It is better to go short so that you can recover some of your losses as much as possible.
The international grain merchants were dumbfounded. Where are the allies they promised? Why did they start short selling themselves? Moreover, in order to make up for their previous losses, this group of people spent money without blinking an eye.
For a time, the price of food in the futures market began to "fall" rapidly. The staple food wheat in Europe even fell by 80% at one point, which made people who were rushing to buy food the previous second dumbfounded the next second.
"What the hell is going on? Wheat that sold for 20 US dollars yesterday is only 8 US dollars today?" Some people were dumbfounded after seeing the prices.
What happened to the promised global food crisis? How did it turn into a bumper harvest in the blink of an eye? The governments of various countries in Europe were also collectively dumbfounded. Why did these big crocodiles start to "eat" themselves?
What they don't know is that these crocodiles are now "red-eyed". The profits from their short selling are almost catching up with their long losses, and they are even profitable.
In front of capital, they don't care about the life and death of your "allies". Only the money that falls into their pockets is the real money.
So more and more capital began to short themselves, and the speed was so fast that everyone was dumbfounded.
Of course, there are the lucky ones, and there are the "unlucky ones". A few foundations that did not have time to short sell, and those foundations that could not raise money to short sell could only watch their accounts blow up.
It is normal for the futures market to blow up, but it is relatively rare for an account that was still in profit the previous second to be forced to liquidate the next second.
But this time, there were too many people who were forced to liquidate. Almost in the blink of an eye, an account worth hundreds of millions of US dollars became negative. This gap is really exciting.
Why is futures the "most exciting" place? Just look at the market this time and you will understand. An account with a floating loss of 200 US dollars in the previous second may have a floating profit of hundreds of thousands of US dollars in the next second, and an account with a floating profit of hundreds of thousands of US dollars may be negative in the next second, and you will not even have the opportunity to cover your position.
To be honest, it is not necessarily a bad thing to not have time to cover your position in this situation. After all, according to this situation, all the money invested is wasted.
Now everyone is desperately shorting to make up for their losses, hoping to recover their losses, so the people who are dumping the market are more ruthless than each other and their funds are more terrifying than each other.
It is said that a South American foundation even used some money from private lending companies and even mortgaged its own company's shares to short sell at all costs.
This is a feast for the bears. The previous bulls now either have to cut their losses or spend money to fight against the bears.
But what awaits them is not just the "crazy" futures market. The delivery period three months later is what will kill them.
After all, people nowadays are not stupid. They know that you have a lot of grain waiting to be sold, but they are waiting to lower the price. Anyway, if you can't sell this stuff, the storage costs and pest problems are the most troublesome.
In addition, there are transportation losses, transportation costs, and the seller's share. People can delay, but these people don't have time and can't afford it. The daily interest on the leverage they use is an astronomical figure.
This kind of loss is no longer something that an individual can bear.
So three days later, they had to announce their titles, and countless bulls began to cut their losses. They can't care so much now. If the grain is delivered, their losses will be even greater.
Wholesalers can drag and wait for you to lower the price, but these grain merchants can't afford it. Every day they lose more, and they have to face huge interest.
So this time the "cut losses" drama in the futures market officially began.