News

April 27, 2008

Market Roundup: The World’s Politicians Begin To Make Noises About High Food Prices, As Market Tightness Eases

By Sally White

Soaring agricultural commodity prices and increasing volatility are driving agriculture trade users away from the commodity futures markets. An emergency meeting of the Commodity Futures Trading Commission was held in Chicago last week, after agricultural producers complained about the effects of the ever increasing inflows of speculative money.

US Department of Agriculture spokesman Mark Keenum said that “increased volatility in futures markets and sharply higher prices have led to higher margin requirements and increased costs of hedging. Cotton shippers and some grain elevators are no longer bidding for future delivery because of risks and costs associated with maintaining hedges”.

The Commission’s acting chairman, Walt Lukken, said that the Commission will deliberate very carefully before it raises speculative limits for...