Should We Allow Speculators in the Commodity Futures Market? - Tim Andriesen, CME Group

[shaney]

There has been quite a bit of commentary in the media recently from certain farm groups like the NFU and R-Calf regarding the need to eliminate or more strictly regulate speculators in the market. Interest in commodities has greatly increased in recent years which has increased the volume of speculators trading in corn, beef and wheat futures.

Are speculators really causing damage to the marketplace? Are the commodity ETF's in your RRSP's destroying your ability to hedge your farm products? When I was in University I was taught that speculators play a key role in establishing liquidity in the market. Is this increase in volatility of prices the real cause behind rising food prices?

at the NCBA 2011 meeting in Denver I spoke with Tim Andriessen from the CME Group about the role of speculators in the market. Have speculators over played their hand and do we need tighter regulation of hedge funds investing in farm commodities.

SEE MORE [URL="http://realagriculture.com/category/farm-shows/ncba11/"]NCBA 2011[/URL] COVERAGE

If you cannot see the embedded video below <a href="http://www.youtube.com/watch?v=fysofeI01Ok">click here</a>

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[blackpowder]

IMHO. I believe it would be ridiculous to try to eliminate speculation.
Perhaps the question might be 'what harm do automated trading systems do?
We benifit when ag comms. go up. Higher highs, but lows always fundamentally grounded.
What they might do is feed the panic.
Is a review of daily limits in order to reflect this trend? I don't feel anything is fundamentally 'broken'.
Look at the pre-computer charts. I don't want to go back.

[cottonpicken]

To afraid to watch may freak out and be banned
forever.

[jethro456]

Speculators give us a chance to recieve high
prices. Sure they don't stay there for long, but
guys who use those opportunities to lock in
profits are laughing. Without them we would have
a very stable, but low, price.
I welcome these huge spikes, even though I
know they will be followed by a huge drop

[FarmRanger]

I'm always amazed that there are so called
farmer advocate groups who rail against
functioning markets and then advocate for a
dysfunctional marketer.

[grassfarmer]

Shaun maybe you could post some links to this "quite a bit of commentary" by the NFU regarding the need to eliminate or more strictly regulate speculators in the commodity futures market. I must have missed that - or was it just a cheap smear to throw in perpetuating the lie that the NFU and R-CALF are similar or associated organisations. I seem to remember that lie being propagated by Nilsson's man Roy Rutledge - does your feedlot happen to have a cosy captive supply arrangement with NB by chance? Is that the common thread tying you all together?

[broker]

if there were more speculators looking at Canadian commodity markets ten years ago there would still be grain trading on the WCE!

[mbratrud]

I Heart Speculators

[buzz]

We like the funds when they push prices higher....don't like them when they short markets and drive down prices...

I am glad they have trading limits etc, because with electronic trading and the amount of money, we are going to see more wild price swings I suspect.