Tomorrow (May 19), the CFTC's Ag Advisory Committee will hold a hearing on the Dodd-Frank proposals.  The recommendations that come out of the 15 CFTC sessions will have implications for hedgers and farmers that will impact bottom lines for a long while.  However, we have received only a couple of passing comments on the subject of hedger margin requirements and the new power of the CFTC. 

40 years ago, the organization I now represent at these hearings (National Grange) and other farm groups had a jaundice eye towards the role of the speculator in grain futures.  So much so, that the Grange called for the elimination of grain and onion futures.  In 1958, Congressman Gerald Ford sponsored the Onion Futures Act, signed into law by President Eisenhower, banning trading futures contracts in onions.  50 years later, "the genie is out of the bottle" (as Scott D. O'Malia said at our August committee hearing) and major farm groups are drowned out by "non-commercial" traders.

Over the years, I have spoken about the futures speculator and the exchange floor "local" as shock absorbers, assuming risks on behalf of the farmer.  I am no longer sure if there is still such a person as an "individual" floor trader.  We are gravitating more and more to the farmer's nemesis and an aid to volatility...electronic trading.

Source: FCStone

New Corn Crop -- Where is it headed? (Source: FCStone)

NOTE: Edgar will be in China for the next few weeks so the next Grain Market Update will be out on June 8th.