MARION, Ohio — Growers throughout Ohio are becoming more alarmed with the growing discrepancies in the Chicago Board of Trade (CBOT) futures contracts and local prices for corn, soybeans and wheat. Essentially, the difference between the price of a bushel of grain in the cash market and the price of that same bushel of grain, as determined by the expiration price of a futures contract traded in Chicago, is showing wider than usual discrepancies.

The Ohio Corn Growers Association (OCGA) has been fielding questions and concerns from Ohio farmers, local elevators and commercial grain handlers on this issue, which is becoming a hot topic throughout the agricultural community.

A concern surrounding, or perception of a lack of convergence of cash to nearby CBOT commodity futures contracts, has some concerned about the efficiency of markets.

“The lack of convergence could have a dramatic effect on one’s ability to mitigate risk via the use of CBOT contracts,” said OCGA Board Member Rob Rettig.

The Commodity Futures Trading Commission (CFTC) has called for a public forum on April 22 to address concerns from the agricultural sector. OCGA is sending representatives in an attempt to share the uneasiness from Ohio farmers.

The organization encourages growers to contact the OCGA office with their experiences and recommendations.

“It is imperative that Ohio farmers are engaged in the process and debate,” said OCGA President Mark Drewes.

“The impact of hedge funds, index funds and pension funds are impacting the market in ways we have not seen before causing it to behave in a much different manner.”

OCGA also is investigating the liquidity concerns in the grain merchandising and banking systems.

“The discrepancies in the market are not just a farmer issue as local elevators and commercial grain handlers level of risk is significant,“ added Rettig. “Ohio farmers and the grain industry must be prepared in the event of additional run-up in prices.”
For a related story, see page 1B.

Ohio Corn Growers Assn.