The wildest swing I see in Hogs is a 100% one between end of 2009 and spring 2011... Nothing like onions volatility...
How stupid are you, I mean really? If you take out all the non physical supply, then only physical supply stays. Hence oil would be $5,000 without speculators. This reasoning is exactly the same as yours yet mine "sounds stupid" while yours "sounds smart" because you and everybody who listens to you doesn't understand the first thing about the markets. It's also impossible for physical demand to exceed supply because you cannot buy what does not exist (prices would just go up until the demand goes down enough).
Kuwait needs $75, Saudi Arabia needs $85 now, $110 later for fiscal break-even. The OPEC cartel owns 80% of world reserves. They will make sure they get those prices most of the time. http://www.marketwatch.com/story/ar...ak-even-price-2011-05-29?reflink=MW_news_stmp http://www.cges.co.uk/media/article...-spending-pushes-breakeven-price-of-oil-up-23
All that would happen if you ban futures contracts on an exchange, is that it would move off exchange. Banks ,investment houses and producers would still trade forward contracts just like in currency. The loser would be the retail speculator. I doubt if the price of oil would change much.