On 7 December, the US Commodity Futures Trading Commission held its first meeting of the Agricultural Advisory Committee (AAC) under the sponsorship of Chairman Rostin Behnam.
In prepared remarks, Behnam commented about the last several years of historically high volatility in response to the global pandemic, various extreme weather events, and geopolitical issues. He noted that "the agricultural futures markets have continuously provided transparent price discovery and accurately reflected supply and demand fundamentals with convergence at expiry. "
Behnam said the goal of the CFTC should be to "examine and explore ways that we can build even greater resilience, usability, access, and availability into our markets and market structures so that the benefits can reach the widest breadth of potential users and market participants."
In her opening statement, Commissioner Christy Goldsmith-Romero reiterated her previous public recommendation that the CFTC conduct studies into trading in key commodities that have experienced "significant volatility, starting with wheat, oil and natural gas," and publish the conclusions to "bring confidence to markets and market participants that our agricultural derivatives markets have integrity, and are without manipulation or excess speculation."
The meeting, first held by the AAC since 2021, covered a wide range of issues. A USDA economist provided a presentation about the agricultural economy with a focus on the impacts of weather-related and geopolitical events. Other presentations focused on sustainability in the agricultural supply chain, an overview from the CME Group of how the agricultural derivatives markets have addressed the impact of geopolitical events through evolving price limits in the agricultural markets, and a presentation on the challenges impacting the international shipping, freight, and storage of the grain trade.
The meeting also solicited input from committee members for topics to focus on during their next meeting in 2023. Recommendations included a focus on access to FCMs for commodity end-users, proposed changes to the CME SPAN margining and how it could impact agriculture markets, the Environmental Protection Agency Renewable Fuel Standard (and the potential impacts on agriculture markets, and voluntary carbon markets. Additionally, members recommended a continued focus on supply chain challenges.