Let’s ignore some of the mechanics and say that the movie events are possible in a movie sort of way.
A forward is a contract for delivery of a certain product at a certain time for a certain price. So you and I could contract for me to sell to you 1 ton of coal on July 2nd, 2011 for 72 dolars.
A futures market is a collection of standardized forward contracts that provide a liquid market for commodities - they allow people to buy and sell securities on an exchange. There price is determined by the price of the underlying commodity - they are therefore what is known as a derivative security. Whereas a forward contract will often anticipate delivery, futures will settle on the market. That means that I will never actually deliver you the coal that the security represents. Instead, we will simply look at the agreed upon price (say, the 72 from above) and compare it to the current spot market when July 2nd rolls around. If, for example, the coal was trading for 75 dollars on that day when our trade expires, then I would have to pay you 3 dollars. That way, you can go to the spot market and buy your coal with 72 dollars of your own money and three dollars of mine. And I can go sell my coal on the spot market for 75, but then I have to give three to you. See, we’ve entered into a hedging contract that has locked our price at 72 dollars, reagrdless of the market movements, by the use of a financial instrument. Although, there is no need to actually negage in the physical trade - it’s fairly common for one party to be hedging (a bread manufacturer hedging against fluctuations in the wheat market), while another is simply speculating (someone at a bank).
btw, the person selling the future doesn’t need to actually have access to the commodity, since it’s a purely financial deal - in some ways it’s similar to a naked short sale on a stock, but it really is better to just think of it as totally different (the similarity is that you have to buy to close the position, but you have to sell to close a position on a futures purchases, so…)
So, when you buy and sell futures, you are ultimately betting on how the commodity will perform from now until the expiration of the contract (of course, you can settle the contract prior to expiration by entering into an offsetting deal - and, honestly, nobody holds to expiration - almost everything gets closed prior). It’s this bet on the future that drives the idea behind Trading Places.
From the explanation above, we (hopefully) can see that if the price of the spot market for OJ goes up over the next 6 months, then anyone who buys futures today will make a lot of money. Conversely, anyone who sells OJ now would lose money.
The false report was (when interpretted as accurate or real) kind of like inside information. Like if you knew that Google was about to buy company xyz, so you start buying a ton of stock in the company, thinking that it’s price would soar once the general public found out (which is illegal, btw). Anyway, if you did that - and you did it enough that you drove up the price - and kept buying at the higher price, thinking that it was still cheaper it would be once the news got out - and then it turned out that Google wasn’t buying it and the price plummetted back down - well, you would be screwed.
That’s what the movie was trying to illustrate.
Except in this, everyone knows that the crop report is about to come out. When the 'big’players start buying and buying right before it comes out, people think that they are on to something - so a bunch of them play along and everyone buys.
When the real report comes out - everyone who was buying realises that they just made some really bad bets - so they all rush to try to get out of their positions and it sends the price of the futures crashing.
Now, the whole time, Winthorp and Billie were actually selling futures - so now they start buying them back (for much cheaper than what they sold) in order to close their position and reap their profits.
The reason that the report would have such an effect is because OJ, like anything else, is priced on supply and demand - so a bad report means that you would have low supply in the future (and therefore a high price). A normal report means that that prices should be, well, normal. It’s those prices that will drive the spot market in the future, and it’s the current expectations of future spot market pricing that drives the current pricing of the futures markets.
Hope that helps.