As the Ranking Member of the Appropriations Subcommittee for Financial Services, I joined with Chairman Durbin to increase funding for the CFTC to $177 million--an increase of 10 percent over the President's fiscal year 2010 request.

It took the Subcommittee an entire year to compile and analyze millions of trading records from the three U.S. futures markets where wheat is traded.

Do you believe that the dramatic increase in commodity indexed trading and the futures which are purchased to hedge against a risk, has played a significant role in the failure of convergence?

But the volatility in the basis has had an effect on you.

It doesn't have to be that way.

Nor are we alleging that index investors caused high cash commodity prices or that they are somehow responsible for more expensive consumer goods.

And that there not be waivers or exemptions?

Exchanges typically charge a transaction fee and a clearing fee for each commodity trade that takes place.

Well, I am not sure I understand your explanation as to why you disagree that the storage cost shift cannot explain this increase in the gap between futures and cash prices. Try it again.

We obviously have identified a problem here that the amount of index trading has created volatility.

Ultimately, it is the American consumer who will bear the burden of these increased costs.

And yet we see this major change in the basis while the same contract was in effect, is that correct?

It is a cause, but it is not exclusive.

And we have shown the correlation between the huge influx of money from the index funds to the increase in the futures prices.

If elevators are hurt, because they cannot effectively hedge, is it fair to say that farmers who deal with those elevators would also be hurt?

Our report concludes that the increase in the number of futures contracts from 30,000 contracts in 2004 to 220,000 contracts in 2008 has created this additional demand for futures contracts unconnected to and without parallel in the cash…

I do not believe we are alleging any wrongdoing on the part of index investors or anyone else.

If it is a significant cause, it seems to me something has got to be done about it.

For more than five years now, this Subcommittee has been taking a hard look at how our commodity markets function.

According to estimates by the Commodity Futures Trading Commission (CFTC), about $15 billion was invested in commodity indexes in 2003. By mid-2008, that figure had grown to $200 billion, a thirteenfold increase.

I have introduced the Commodity Speculation Reform Act.

Farming is risky business. It is a notoriously thin margin the people in the food industry have.

And when are you going to be deciding whether to carry out that mandate--in other words, remove the exemptions, remove the waivers?

Well, I am glad to hear you acknowledge at least that it is a contributing factor.

The Subcommittee's report on excessive speculation in the wheat market is a very important contribution.