Grassroots

The Voice of New York Farm Bureau

February 2007

Wall Street interested in agriculture

NEW YORK — Wall Street commodity fund traders that have been investing heavily in energy futures are now loading up on agricultural commodities including corn and livestock futures.

The recent flood of investment has raised concerns among grain traders and agricultural producers that speculative money is gaining an undue influence over the markets, which help set the prices of raw commodities for a host of consumer food products.

A recent study by the Commodity Futures Trading Commission, which oversees the nation’s futures markets, has found that Wall Street commodities index funds, which are investments in futures that track the underlying commodities of a particular index, have a much heavier concentration in agriculture futures markets than many had expected.

The commission found the Wall Street funds control one-fifth to one-half of the futures contracts for commodities including corn, wheat and live cattle on the Chicago, Kansas City and New York exchanges.

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