1. Truly crazy times we are in right now in commodity markets! I had never run across negative prices before for physical commodity prices. In the grain markets I don't think this could ever happen. Thanks for the examples that several of you have shared.
2. After doing some digging, here is the way I explain the negative prices for physical commodity markets. Let me know if this makes sense. Let's take a market like milk. Assume supply is so large that there is no demand for current consumption and no place to store it.
3. Also assume not enough time to cut production of milk back fast enough to match demand. In this circumstance, the best alternative for the milk producer is to dump the excess milk down the drain. In effect, the selling price of the milk is zero.
4. And we know that some milk production and eggs have been dumped like this in recent weeks. So, a price of zero for this stuff. The key is that there is a zero price option for milk. Dump it down the drain.
5. Now let's change the commodity to crude oil. Everything else is the same. 100 years ago producers would have just dumped the crude and the price would have been zero. I don't think crude producers can do that today!
6. Assuming you cannot dump crude oil that has been produced and is flowing through the pipelines, what options does the crude producer have? The oil has to go somewhere and here is where we can get the negative price scenario.
7. The only option at that point as a producer is to pay someone to take the crude oil off your hands. Hence, a negative price. It takes an extremely rare circumstance where the producer (sellers) best option is to pay someone to get rid of it.
8. That is the simplest and best explanation for negative prices that are showing up in some physical crude oil markets right now. Glad to be corrected if something in my logic is off. Really, today is the first time I have ever thought about this!
9. I think this very rare scenario in physical crude oil markets intersected with the delivery process for the May 2020 WTI futures today to create this unprecedented chart. May down $55.90 today!!! 
10. Here is what is really crazy about price change for May 2020 WTI. One contract is 1,000 bbl. Yesterday, OI was 108,593 contracts, or 108.593 mil bbl. So, $55.90 price drop equates to value of those contracts dropping about $6 billion in one day (if no offsets).
11. The next shoe to drop will be some traders/firms blown out by the drop in May 2020 WTI futures price. The CME margin system is likely facing some severe tests right now
