NFU Calls for CFTC Investigation
WASHINGTON (May 8, 2008) – National Farmers Union President Tom Buis today strongly urged the Commodity Futures Trading Commission (CFTC) to conduct a thorough and comprehensive investigation of recent volatility within the commodities futures market.
“With inputs continuing to soar, producers need to market their commodities, yet have been pushed out of the traditional market intended to serve as a risk management tool,” Buis said. “I urge the CFTC to take swift action to inject transparency into the marketplace.
Buis urged the commission to place a moratorium on any new commodity training index until the investigation is completed. He said the CFTC needs to look at the role and impact of over the counter (OTC) trading and swaps are having on markets.
“Without a full understanding of these trades or their impact, it is impossible to say that manipulation of the commodity markets is not occurring,” Buis said.
Buis said NFU opposes any increases in the speculative positions limit, which was proposed by CFTC in 2007. He added that the CFTC needs to recognize that speculators have different interests than farmers and other traditional, commercial users of the exchanges.
The CFTC held a roundtable meeting on April 22 to gather information on whether the futures markets are adequately and appropriately performing their risk management and price discovery roles. At the time, Buis said rural America is headed for a train wreck if these challenges are not appropriately addressed.