Federal officials will examine the role of large institutional investors in grain markets -- institutions such as pension systems and hedge funds.
Their role in the grain trade has grown steadily over the past few years, and can lead to wide swings in the prices that farmers get for their crops.
Bill Gordon, who raises soybeans on his farm near Worthington, Minn., says he expects a good yield, and a good price, on his crop this year.
"They're decent yields," he said. "It's a good soybean crop, not an awesome soybean crop."
Gordon and other Minnesota farmers are making good progress on their harvest, now that fields have dried up after last month's heavy rains. The number of bushels per acre is running above average, and the prices farmers are getting for their crops make for a profitable year.
But the pace of change in the grain markets is a constant topic of discussion among farmers, concerned that trading by companies far removed from agriculture increasingly plays a bigger role in setting prices.
At current prices, Gordon will earn about $10 a bushel right now for his soybeans. If that holds, he'll see about a 15 percent profit over the cost of growing the crop. The entire Minnesota soybean harvest would be worth almost $3.5 billion. That's a lot of money, and makes farmers pay close attention to price changes.
For Gordon, a change of even a few pennies can quickly earn or cost him money. He said he has to watch closer than ever, because the speed of those price moves seems to have at least doubled since he started farming.
"You can see a $1 movement in soybeans in two to three days," Gordon said. "In the past, 10 to 15 years ago, you might only run up 50 cents."
Failing to lock in that $1 gain would hurt, cutting his profit per bushel by two-thirds.
One reason for the speedup is computer-based trading. Another factor is a change in the major players.
It used to be fairly straightforward: Farmers sold to grain elevators, who resold the product to the ultimate users -- livestock producers, food companies and industrial concerns like ethanol plants.
But that has changed in the last decade. Today, there are many more buyers of grain who wear suits and work in the world's financial centers.
"The fund growth over the last 10 years has been phenomenal," said Frank McDowell, who manages the New Vision farm co-op headquartered in Worthington.
The funds he's referring to are pension and hedge funds and other outside investors with lots of cash. Such groups trade grain like they do stocks, hoping to buy low and sell high. McDowell said they hold corn contracts equal to about 20 percent of this year's crop.
They're not actually buying the grain itself, but financial instruments that rise and fall in value as grain prices change. But McDowell said the dollars involved can move markets.
"They've got enough capital to where they're going to influence prices," he said.
Corn, for example, is in a bull market, up 40 percent since June. McDowell said all the new money helped fuel the increase.
Such influence becomes a problem for McDowell and his grain elevator when it leads to quick price spikes, making the elevator's futures contracts more expensive to maintain.
During a record move upwards in corn prices two years ago, some elevators decided to stop offering certain grain contracts altogether because the rapid price changes created too much financial risk. That prevented some farmers from getting the price and terms they wanted for their crops.
But the big investors say they're blameless.
"We've never really accepted that thesis -- that commodities investing by people like us has a huge impact in terms of pricing," said Clark McKinley, a spokesman for the California Public Employees Retirement System.
McKinley said the California retirement system, one of the nation's largest, has about $800 million invested in grain and other commodities. But he said that's not enough to influence the multi-billion dollar grain trade.
University of Illinois research supports that position -- at least in part. The school found institutional trading had no long-term impact on prices.
But farmers like Bill Gordon say it's the short term they worry about -- quick price changes they might miss.
Government regulators hope to settle the question. The federal financial services overhaul bill signed last summer requires the Commodity Futures Trading Commission to examine the role of institutional trading in grain markets, and whether that role should be restricted.