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One form this cooperation could take is the one that has traders worried but only to a point these days. The Wall Street Journal reports this morning that:

Food's surging cost has coincided with unprecedented levels of financial speculation in grain futures markets. Now consumers and Farm Belt market participants hurt by more volatile prices are asking Washington to rein in increasingly powerful commodity investors.

Some grain buyers say speculators' big bets on relatively small grain exchanges, especially recently, are pushing up prices for ordinary consumers.

When you get a huge influx of speculative money, as happened in December and January, the price inflates beyond what the fundamentals would dictate and creates a sort of balloon, Daren Coppock, chief executive of the National Association of Wheat Growers, said in an interview. The rules of the game need to be changed to make the market function better.

There's heartburn in the heartland, CFTC Commissioner Bart Chilton said. He said he recognizes that financial investors add necessary liquidity to commodities markets, providing more robust buying and selling. But he said the commission should study more carefully the effects of these investments because of concern about how these risk management markets are working.

Another issue likely to dominate the hearing is the notion of convergence and whether financial investors have distorted it. A futures contract is an agreement by one side to buy, and the other side to sell, a commodity at a set price on a set date. Often traders make offsetting trades to get out of their bets, but if they don't, futures contracts often result in physical delivery of a commodity. As a futures contract gets closer to its expiration date, the price is supposed to converge with the price that actual wheat or corn, for example, is trading at on the open cash market. The commission will be looking some instances of discrepancies in those prices.

Perhaps nothing will be done as yet. Perhaps the issues are just coming under consideration. It is, however, important to ponder the potential for change in these markets that have been ablaze over recent months. It certainly cannot be a case tight supplies across the board.

As yesterday, watch the dollar and oil but more importantly watch how gold correlates (or does not) to the group.

Jon Nadler is s Senior Analyst with Kitco Bullion Dealers Montreal