CFTC to Probe Cotton Futures Irregularities

The Wall Street Journal reports that the Commodity Futures Trading Commission is likely this week to announce a probe into potential irregularities in the cotton-futures market, citing people familiar with the matter.

The investigation concerns a dramatic spike in cotton prices in early March, followed by a drop, the newspaper said. Unlike the grain markets, where inventories stand at multi-decade lows, cotton stocks were overflowing this spring, which might have kept prices in check, the newspaper said.

The CFTC, the top U.S. futures-market regulator, has sent out subpoenas over the past few weeks to a variety of cotton market participants, the newspaper said.

The CFTC did not immediately return a call seeking comment.

The agency is also expected to unveil new policy changes this week in the agriculture-futures markets, according to both the Journal as well as The New York Times, citing people briefed on the agency's plans.

Last week, the CFTC said it would step up surveillance of energy markets by tracking index funds and overseas trading of West Texas Intermediate contracts on a key U.K. exchange.

The regulator also disclosed a wide-ranging investigation into the crude-oil markets.

U.S. lawmakers have pressured the CFTC to crack down on speculators they blame for pushing energy prices to record levels.