Oxfam recently put out a new report on the world's largest grain traders, the so-called ABCD firms (Arch Daniel Midlands, Bunge, Cargil and Louis Dreyfus). The report provides a detailed overview of the activies of these companies and their emerging competitors and offers some insights into the directions where these companies are heading. Cereal secrets: The world's largest grain traders and global agriculture One important area of business that the report touches on is the speculation that these companies are increasinlgy involved in. With the profits of the ABCD firms soaring just as agricultural commodity and food prices began to rise after 2006 (see Figures 2 and 3), many have begun to question whether the traders are genuinely hedging their risks or whether they are also speculating in order to turn a profit from the volatility of commodity prices. In particular, there is concern about whether these firms are capitalizing on their knowledge and experience (not to mention their global reach and deep pockets) to exploit futures markets to secure profits for themselves beyond genuine hedging. With the establishment of investment funds for internal purposes and external clients, these concerns have only been heightened. The question of whether these firms are engaging in such trades and derivatives as a speculative venture or as a hedge hinges largely on whether they have a commercial need for the actual physical commodity they are buying or selling. This is not always clear, particularly as they are now increasingly selling their services to third party investors. The reality is likely that both hedging and speculation are involved, though the firms have tended to hide behind their bona fide hedging activities, making the case that genuine hedging may result in windfall profits, something that they do not consider to be speculation. Because the traders do not report details of their individual business segments, it is almost impossible to determine the proportion of their income that is derived from sales of financial products or speculation on their own account. The prices of the food crops that these companies dominate the global trade in are once again touching record highs. With their control over that global trade they can essentially dictate who gets to eat and who doesn't, and at what price. It's clearly time to pull the curtain back on what these companies are up to.