The entire point of the free market is to provide for speculation. People buying and selling goods for real dollars where they have real risk is called 'price discovery.' It incentivizes discovery of information relevant to the market and dissemination of that information to the market via price.
Lets take the example of corn flakes, I'll be a speculator, every day I watch the corn fields, one day I see a fire start on one of a field ostensibly representing half of that year's corn, I buy corn at any price knowing it will go up because the world's supply has just been cut in half. Next week I sell all that corn and take the profit as fruits of my labour.
People who trade Wal-Mart stock will often request satelite images of Wal-Mart parking lots to estimate sales. Just imagine the ingenious ways commodities traders use to discover information about supply and demand.
Farmers are completely free to sell their corn direct to consumers, but most prefer not to because that isn't an efficient or effective way of selling. Don't blame Cargill, blame farmer John down the street who wants the best price for his corn.
For big commodities like corn, that might not be a solution, but I'd like to build a startup that covers some huge market inneficiencies - for example, peppers grown 500 km from the city I live in are sold at U$ 1, while they cost U$ 4 at the supermarket.
Yeah. Thanks. But the point of the article is that is is surprising (regardless of it making a difference), that companies who you would expect to be using commodities primarily for hedging are using it much differently.
