I get the idea of future trading and its original purpose. However, I cannot quite understand how things work when traders and speculators are involved. For example, lets say a producer actually wants to lock in a price for his product so he bought a future contract that matches his goal. What would happen if the counter party closes their position prior to the expiry date? Wouldn't the producer be left with his product and thus not able to sell at the price he intended to? Assuming he does not also closes his account prior to the expiry date, who is the counter party that is ready to buy the product in the end?
In short, doesn't speculators and trader disrupt trading for those who actually want to trade commodity physically by moving prices up and down? My only theory is that producers and manufacturers rarely uses the future exchange and when they do its to hedge the procurement contract they already have in hand, so any gains or losses in the futures can be offset. Is this correct?