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I'd speculate that it's the point at which the insurance and futures markets allow for buyers that are unprepared or unable to prepare for actually receiving a shipment.

This leads to a market in which speculation is allowed, instead of biding on the actual outcome of supply/demand interacting.

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This isn't necessarily so clear cut. Some percentage of market activity due to speculation helps to smooth capital flows over time. In an industry like fishing, profitable speculation can keep the industry afloat in tough times (e.g buying up fishing debt in a slump for pennies on the dollar because you know the fish are still there and this was just a bad season) or damp down an overheated and unsustainable market (e.g. shorting fishing futures).

It's interesting that you think speculation is bad and yet you're sitting there speculating. Kind of self refuting no?

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