03/24/08 Cash wheat market called "dysfunctional"

Farm and Ranch March 24, 2008 An exporter told a joint meeting of the Washington Wheat and Barley Commissions last week that the action of investment funds in the futures markets has created a dysfunctional cash market. Mark Hausinger of CLD Pacific Grain, a Wheat Commission industry representative, said these funds are considered hedgers, not speculators, and therefore have no limit on their positions. Wheat Commission Chairman Hal Johnson said he is more concerned about marketing this year than he has ever been. Johnson says sure prices are high; Johnson: "But when you get so much speculation in these markets I think there is a real danger that things can happen that may not be positive like maybe no cash markets for a week or so. Or just things like that. We don't know, but it is certainly though provoking and scary at times." Mark Hausinger said something needs to be down about the investment funds. Whether it takes any action or not the Commodity Futures Trading Commission has announced it will convene a public meeting to discuss recent events affecting agricultural markets, including the role of speculators and commodity index traders. In a news release CFTC Acting Chairman Walt Lukken stated that these historic market conditions, particularly in wheat and cotton, require the CFTC to hear firsthand from participants to ensure that the exchanges are functioning properly to discover prices and manage risk. Hausinger expressed disappointment that the CFTC is waiting until April 22nd to hold this meeting. I'm Bob Hoff and that's the Northwest Farm and Ranch Report on the Northwest Ag Information Network.