Wheat price hurts traders
Kraft Foods Group Inc and Mondel?z International Inc are being sued in a proposed class action on behalf of wheat futures and options traders for allegedly manipulating the grain’s price.
The lawsuit was filed on Thursday by futures trader Richard Dennis in the federal court in Chicago, eight days after the US Commodity Futures Trading Commission sued both companies. In that case, the CFTC alleged that the former Kraft Foods Inc in late 2011 bought $90 million of wheat futures despite never intending to take possession of the grain. The regulator said it did this to depress prices in the cash wheat market, where sellers might believe the companies needed less wheat, and inflate futures prices. Kraft’s strategy led to more than $5.4 million of illegal gains, the CFTC said.
In Thursday’s complaint, Dennis raised similar claims, and accused Kraft and Mondel?z of manipulating prices of cash wheat and wheat futures contracts on the Chicago Board of Trade from 2003 to January 2014, boosting revenue and trading profit.
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