The Commodity Trading Futures Commission (CFTC) has not been long to take actions following the three days hearing held in Washington regarding speculation in the commodity markets. According to the Financial Times:
A commodity investment unit of Deutsche Bank and another fund group have been stripped of their exemption from speculative limits in key agricultural futures including corn and wheat.
The move by the Commodity Futures Trading Commission reflects the US regulator's growing scepticism towards commodity index investing and its concerns over the role of speculators in raw material markets.
Yesterday's move is the first time the commission has revoked an exemption from position limits, a CFTC spokesman said.
Instead of keeping a low profile, hedge funds are again in the headlines. Also in yesterday's Financial Times, we can read:
A hedge fund has made a large bet that natural gas prices will triple by the winter just as the price of the commodity slides to a seven-year low.
Traders took notice last week when the fund, as yet undisclosed, spent millions for the right to buy US natural gas at $10 (£6.03) per million British thermal units in January and February, up from today's spot level just above $3 per mBtu.
If the CFTC was looking for good reasons to impose new speculative limits on energy trading here is an easy one.