A US Senate committee has concluded that excessive speculation from commodity index traders – which had been given permission by US regulator, the Commodity Futures Trading Commission to exceed position limits – fuelled last year's record wheat price, resulting in higher food prices.
The US Senate permanent subcommittee on investigations, chaired by prominent US politician senator Carl Levin and senator Tom Coburn published its report on June 23, called: Excessive Speculation in the Wheat Market. It follows a year-long investigation into trades conducted on CME Group’s wheat contract, finding that large speculative positions disrupted convergence between futures and cash prices and increased costs for farmers, the grain industry and consumers....