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Growers offer concerns, ideas on futures marketTwo National Association of Wheat Growers grower-leaders told market participants and overseers April 3 that the commodity futures market is not reflecting market fundamentals, posing risks to local elevators and the producers who utilize them. NAWG Second Vice President Jerry McReynolds, a wheat producer in Woodston, Kan., and Domestic and Trade Policy Committee Chairman Bing Von Bergen, a wheat producer in Moccasin, Mont., made the comments by teleconference as part of a Commodity Markets Council forum on futures market issues. The producers told other participants that growers are pleased about high commodity prices seen in recent months, but also very concerned about potential producer-level impacts including magnified exposure to margin calls, the potential failure of local elevators and the complications caused in market function by large infusions of speculative capital. "While enjoying the higher prices brought about by recent events, our members have serious concerns about the functioning of these markets," the producers said in prepared remarks. "We believe that failure to apply appropriate limits to certain classes of speculative investors have interfered with the markets' function as risk management tools for grain producers and other hedgers." NAWG leaders also made a number of recommendations to the Council, including subjecting index funds to the same position limits applied to speculators and revisiting the recent decision to expand speculative position limits. McReynolds and Von Bergen suggested that the exchanges look into ways to provide more delivery flexibility to improve convergence between cash and futures; done correctly, they suggested, it should provide a dose of reality and discipline to the market. The growers also expressed NAWG's opposition to a recent proposal that would merge the Commodity Futures Trading Commission and the Securities and Exchange Commission. 4/12/08 Date: 4/11/08
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