The following article is from Business Insider:
by Simone Foxman
Wheat futures are scraping $6.49 per bushel today, their highest price since early November, and nearing their highest prices since the collapse of derivatives broker MF Global.
Wheat prices had fell sharply in November, as all the gory details of the firm’s collapse were exposed—including as much as $1.2 billion in client money still missing. The firm traded heavily in futures derivatives.
Certainly, many other factors impacted the price of the food commodity. However, lack of confidence in the futures contract likely raised premiums related counterparty risk.
Analysts have blamed the Chicago Mercantile Exchange’s clearing house for poor management of the MF Global collapse, and Reuters reports that grain traders are urging the exchange to do more to protect traders’ money.
Even so, the resurgence in wheat could indicate that the steam is finally going out of the MF Global collapse, and confidence is returning to agricultural futures markets.
Source: Business Insider
Posted by Haylie Shipp
