Neal Kottke, Founder and Chairman of Kottke Associates was the cover feature of the November 2010 issue of Futures Magazine.
In this interview by renown futures writer Daniel Collins, Neal discuses today's agricultural markets, his long career including serving as Chairman of the Chicago Board of Trade Clearing Corporation and as Vice Chairman of the Chicago Board of Trade, the effects of regulation and the Dodd-Frank act, long-only commodity funds and much more.
Here is a brief excerpt:
Futures Magazine: There has always been a creative tension between the commercial and speculative side of trading, particularly in grain markets, how has that evolved over the years? How has the emergence of the long-only commodity funds affected that balance? How?
Neal Kottke: When the grain markets went through their explosion in the 1970s, they were led by an export demand. At that time, the commercials were the predominant influence and drivers in the grain markets. Today’s grain markets are different because you have the added impact of, particularly in corn, ethanol as a demand factor and [most recently] that has been where the expansion of demand has come from. Along with that, you have had an increase in the capital that can be employed in a speculative nature in the form of managed futures. So those two features are great influences, and therefore the commercial side is diminished to some extent.
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