Have You Got $10,00 to Burn?
The Commidity Futures Link in the International Food Chain, Who Needs It and Why Most of Us Don't.

Publisher:  GATT-Fly, Canada
Year Published:  1977
Pages:  36pp   Resource Type:  Article
Cx Number:  CX330

This research paper traces the central role played by commodity futures exchanges in the international farm-to-table food chain, especially as it affects Canadians.

Abstract: 
This research paper traces the central role played by commodity futures exchanges in the international farm-to-table food chain especially as it affects Canadians. Wheat, the most important food staple in international trade, and Canada's largest agricultural product as well as her most valuable agricultural export, is used as the focus for demonstrating the dynamics involved in commodity futures markets. The reader is reminded that although Canada is the fifth largest world producer of wheat, she is, nevertheless, the worlds second largest exporter. Since over two thirds of Canada's wheat exports go to China, the Soviet Union, the United Kingdom and Japan, the objective in producing wheat for export is ultimately trade, not feeding the hungry of the developing nations.
The paper shows how, in summary, commodity futures markets work, what they work with and who works them. Private grain trading companies like American-owned Cargill, make speculative profits in wheat by selling futures contracts dear and buying them cheap as in a stock exchange. Wheat farmers, on the other hand, have learned that without the orderly marketing system, based on co-operatives such as the Canadian Wheat Pool and the Saskatchewan Wheat Pool of Canada or on the Canadian Wheat Board, the prices they can generally get at their nearest country elevator are much lower even when prices are high in commodity futures markets like the Winnipeg Commodity Exchange. As for the consumer, his bread prices are partially set by flour millers and bakers who also act in futures markets. A plea for support of orderly marketing and fair prices to farm producers concludes the article. Additional information is provided by appendices, a list of principle sources and tables and inserts.