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To: Brumar89 who wrote (413300)	2/26/2011 4:00:14 PM
From: Ish	Read Replies (1) \| Respond to of 794379

<<And this affects more than just corn because corn is a livestock feed and because of acreage diversions to corn.>> You might want to talk with someone who actually feeds stock. They feed a blend, part of which is distiller's grains, that's what is left over after making ethanol. By the way, the biggest acreage grabber so far this winter is .....COTTON!

To: Brumar89 who wrote (413300)	2/26/2011 5:32:43 PM
From: Katelew	1 Recommendation Read Replies (1) \| Respond to of 794379

There's a legitimate reason for a futures market in ag commodities .... producers and suppliers can use it to lock in prices and reduce price risk for themselves. So to do what I think you'd like, you'd need to somehow restrict parties not in the business from buying/selling agricultural commodity futures and I don't know who you'd do that. The players are required to self-identify. For ex., my trades are cleared through Open E-Cry, where I'm registered as an individual speculator. If I were working on behalf of a producer or processor, my account would be registered and titled differently. The distinction is made because each month, only a certain number of positions or contracts are made available to speculators and this varies with each commodity. Now as long as I only trade financial futures, such as currencies or the S&P, I'm not subject to any kinds of limits. This would only come into play if I switched over to physical commodities. In theory, the CME knows who's who. In reality, it gets a little muddled. A company like Cargill might have traders going into the forward market to lock in prices and also have a trading department that is trading for its own account, i.e. speculating. The real problem is with outright fraudulent attempts to evade the position limits. I don't understand the mechanics, but it can be done with both swaps and options to in effect control more contracts than one would normally be allowed to control. Evading position limits brings about big fines and automatic disgorgement of profits for those who get caught. The CFTC is much like the SEC in that both claim to be underfunded and understaffed and thus unable to fulfill the regulatory oversight they are tasked with. I don't know how much validity this has, but do know that the CME, the Chicago Mercantile, is said to be working overtime to try and enforce position limits on speculators. The huge percentage price swings hurt the ag producers and processors that the exchanges themselves were created to assist. Take a Safeway for example which suddenly has to lock into substantially higher prices for beef and then try to pass that extra cost along to consumers or absorb those costs in making cuts somewhere.

To: Brumar89 who wrote (413300)	3/4/2011 9:16:37 AM
From: FJB	8 Recommendations Respond to of 794379

Maybe If We Don't Mention It No One Will Notice When certain information proves challenging to entrenched political or ideological commitments it can be easy for policy makers to ignore, downplay or even dismiss that information. It is a common dynamic and knows no political boundaries. Global Dashboard catches the Obama Administration selectively explaining the causes for increasing world food prices: [O]n one aspect of US food policy, there’s a deafening silence: the government’s support for corn-based ethanol. Here’s Robert Hormats, Under-Secretary of State for Economic, Energy and Agricultural Affairs, on USAID’s blog: World food prices have been increasing over the past six months, due to weather-related production losses and strong global demand. The growing demand is fueled by rapid expansion of middle-class households in emerging markets. Er, hello? Let’s stop by at FAO’s Food Price Index (February data out today – you guessed it, another record high). What do they think is driving cereal prices upwards? The increase in February mostly reflected further gains in international maize prices, driven by strong demand amid tightening supplies, while prices rose marginally in the case of wheat and fell slightly in the case of rice. In other words, this is mainly about corn. And who’s the biggest corn exporter in the world? The United States. And where is 40% of US corn production going this year? Ethanol, for use in US car engines. And will USAID acknowledge that this has anything at all to do with spiking food prices? Don’t hold your breath. rogerpielkejr.blogspot.com