Last week, the U.S. Commodity Futures Trading Commission (CFTC) charged Kraft Foods Group, Inc. and Mondelēz Global LLC with manipulation and attempted manipulation of the prices of cash wheat and wheat futures. The complaint, filed on April 1 with the U.S. District Court for the Northern District of Illinois, alleges that the two companies also violated speculative position limits established by the CFTC and the Chicago Board of Trade (CBOT), and engaged in numerous noncompetitive trades in CBOT wheat. According to a statement released by the CFTC, the actions of these two organizations in December 2011 did result in market price shifts, lowering cash wheat prices and strengthening the spread between December 2011 and March 2012 wheat futures, which made the companies more than $5.4 million in profits. NAWG is concerned about potential manipulation in the wheat market that negatively impacts our wheat growers.
“Our growers operate on low margins and even pennies per bushel difference in market price can make a big difference to a farmer’s bottom line. We must be able to trust the markets, and anything that violates that trust takes away one of our tools for managing risk,” said NAWG President Brett Blankenship, a wheat farmer from Washtucna, Wash. NAWG will continue to monitor this case and provide our members with relevant updates.