Gary Gensler, chairman of the Commodity Futures Trading Commission, told the US Senate yesterday (July 21) that the “continued lack of convergence” between cash and futures prices for wheat was “unacceptable”.
He was testifying to the Senate’s Permanent Subcommittee on Investigations, in response to a report by that subcommittee called Excessive Speculation in the Wheat Market.
The report found that commodity index investors were one of the primary causes for an excessive divergence between cash and futures prices. Gensler said yesterday: “The average difference between the Chicago Board of Trade wheat futures price at contract expiration and Toledo cash wheat prices rose from an average of about 5 cents per bushel in 2005 to 47 cents in 2006, narrowed to 24 cents in 2007, but widened again appreciably to $1.07 in 2008.”
The CME Group has amended the terms of its...