World Perspectives

Still More on Position Limits

Dodd-Frank required that the CFTC set speculative position limits for futures contracts based on physical commodities “where appropriate” in order to deter excessive speculation that might cause harmful price fluctuations. The latest manifestation of the position limit debate comes from the CFTC’s Energy and Environmental Markets Advisory Committee.The subject of limits on the size of speculative positions held in derivative markets never goes away. The Commodity Exchange Act of 1936 required that positions held by speculators in agricultural futures contracts traded at the CBOT be limited in size to forestall the kind of market manipulation that had occasionally occurred since the late 1800s. Futures markets for other physical commodities...

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From WPI Consulting

Forecasting developments in production agriculture

On behalf of a private U.S. agricultural technology provider, WPI’s team generated an econometric model to forecast the movement of concentrated corn production north and west from the traditional U.S. Corn Belt. WPI’s model has subsequently provided quantitative support to a multi-million-dollar investment into short-season corn variety development. WPI’s methodology included a series of interviews with regional grain elevators and seed consultants. Emphasizing outreach and communication with stakeholders who possess intimate sectoral knowledge – on-the-ground insights – is a regular component of WPI’s methodologies, made possible by WPI’s ever-growing network of industry contacts.

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