CFTC gets an earful

摘要

The Commodity Futures Trading Commission (CFTC) got an earful from hedgers during an April forum in Washington D.C. to collect information on price discovery and record spikes in volatility in the agriculture markets. Producers didn't hold back, urging the CFTC to look at the increase in speculative money coming into the market. "The market is broken, it's out of whack, and somebody's got to step in and give some relief," said Billy Dunavant of cotton merchandiser Dunavant Enterprises. "We need to get back to trying to function as a futures market that has some stability. Traders and commercial hedgers need to be treated on a totally different basis than speculators and commodity funds." Mark Keenum of the U.S. Department of Agriculture noted that increased volatility in futures markets and sharply higher prices have led to higher margin requirements and increased cost of hedging. "Cotton shippers and some grain elevators are no longer bidding for future delivery because of risks and costs associated with maintaining hedges," Keenum said, adding that the situation has raised fears that cash and futures markets will face convergence problems.