Citing “unprecedented differences” between cash and futures prices on the Chicago Board of Trade, National Farmers Union President Tom Buis says the nation's growers “need to have assurance that market concentration is not being used to manipulate the futures market.”

In a letter to officers of the Commodity Futures Trading Commission, he asks that the CFTC investigate “the unusual difference” between prices on the Chicago Board of Trade and the local cash prices offered to farmers.

The CFTC was created by Congress as an independent agency to regulate commodity futures and options markets in the U.S. Its designated mission is “to protect market users and the public from fraud, manipulation, and abusive practices related to the sale of commodity and financial futures and options, and to foster open, competitive, and financially-sound futures and options markets.”

Buis says the wheat price issue has been addressed by farmers at NFU listening sessions held all across the country, along with similar concerns about corn and soybeans.

During the 2006 wheat harvest, the NFU letter says, local cash prices for soft red winter wheat initially ranged from 75 cents to $1 under the Chicago Board of Trade September futures price.

“As prices rose on the CBOT, the local basis widened, rather than reflecting the price improvement that was occurring on the exchange. Some have suggested that one cause of the widening basis is the limited number of delivery points for wheat traded on the CBOT and the level of control of those delivery points.”

The same situation is occurring at other exchanges and for other exchange-traded commodities, Buis' letter says.

He noted that the CFTC's Agriculture Advisory Committee has been alerted about the matter and that “news articles have also raised the price discrepancy issue.”

The issue, he says, is that the basis “has become unusually wide, first in wheat, and now in corn. In fact, it appears — given any fair analysis — that these price discrepancies represent unprecedented differences between cash and futures prices.”

Buis' letter asks that the CFTC “analyze and investigate this issue in terms of the causes for this market disconnect and its economic impact on producers across the country.”

The National Farmers Union is holding a series of 15 listening sessions across the country, dealing with the new farm bill and other concerns. Information gathered will be presented to Congress.

At the first of the sessions, held at Point, Texas, farmers and ranchers “overwhelmingly say disaster assistance is their top priority right now,” Buis says. “They'd like to see permanent disaster programs in place, and they underscore the need to develop programs that allow them to get a profitable price from the marketplace.”

The Texas farmers, he says, “expressed a strong preference” for extending the current farm bill for a year or two until the economic, political, and international trade climate is conducive to improving an already good piece of legislation.

The 2002 legislation is slated to expire in 2007 and Buis says “it is essential that Congress act deliberately in drafting a new farm bill after having gathered the input of food and fiber producers nationwide.”

At a Springfield, Ill., NFU forum, he says, farmers were “hopeful” about advances in the use of renewable fuels, but “are concerned about losing farmer control over the production of ethanol.”

The consensus of the group also was that “in this rancorous political climate, we would not be able to come up with a better farm bill than the one we now have.”

Buis says farmers “expressed a strong preference for a competition title in the farm bill, a very strong concern that current anti-trust laws are not being enforced, and that insuring fair and open markets should be a top priority for Congress.”

The Ohio group also said Congress should draft policy that helps farmers adequately distribute and market their high quality products and “expressed a tremendous amount of hope for the potential of direct producer-to-consumer marketing to help farmers get a fair price for their products.”