This article is intended to ease some of your concerns about the topic or give you useful arguments for conversations with friends and family—if you choose to engage in that sometimes exhausting discussion at all.

One central criticism of speculative futuresA future is a standardized forward contract that obligates the trading partners to a transaction in the future. trading is that the contracts being traded can become detached from the goods actually available. First, however, we need to distinguish between settlement methods: some futures provide for physical delivery, while others are cash-settled. If you do not want delivery, you must observe the exchange and broker deadlines and close or roll your position in time. Automatic liquidation by your broker is not a general guarantee. Profits and losses are settled through clearing. Your counterparty does not have to share either your time horizon or your purpose.

Contracts, delivery obligations and physical backing

The gold market helps illustrate this distinction. The number of derivatives alone does not tell us how much metal must be available for the particular settlement process. Futures, gold ETFs and gold ETCs differ in their legal structures and terms. Some products confer a delivery entitlement; others only provide exposure to price movements. Physical backing does not automatically make you the owner of specific bars. Whether and how a product is backed must be checked for that particular product. A general shortage cannot be inferred from the number of contracts.

The same applies to our money. Commercial banks create deposit money when they lend. There is no general rule allowing them to lend exactly ten times the money they already hold. Regulation, funding requirements and demand for credit constrain lending. Loans can finance economic activity; they do not automatically increase prosperity.

Bank deposits are claims against a bank, not stocks of cash. Large-scale withdrawals can cause liquidity problems; that does not mean deposits are merely imaginary.

Trust is part of the monetary system. Deposit money also has a legal basis and is recorded on balance sheets.

Criticism of futures trading concerns, among other things, possible price distortions and their consequences for people who can barely afford food. But which economic effects can be substantiated, and how should we assess them morally? We need to distinguish these two questions before drawing a conclusion.

Speaking to the FAO on 11 June 2015, Pope Francis criticised the possible effects of financial speculationSpeculation is buying or selling an asset because you expect its price to change. on food prices and poor people. The phrase “This economy kills” comes instead from Evangelii gaudium, published in 2013, paragraph 53. There it refers to an economy of exclusion and unequal incomes. The documents and their contexts must be kept separate. These statements invite an economic and moral discussion; they are not a blanket scientific judgment on every futures transaction.

Our current economic system is, of course, far from perfect, and there are many areas where it needs to improve in the future.

We should also remember the economic and social progress of recent decades. Health, living conditions and incomes have improved over the long term in many countries. These gains are real but unevenly distributed; they do not rule out setbacks.

For a perspective on these developments grounded in data, I recommend “Factfulness” by Hans Rosling, Ola Rosling and Anna Rosling Rönnlund. Published in 2018, the book encourages readers to test widely held assumptions against data. Its historical figures do not, however, replace current datasets.

Extreme poverty has fallen over several decades. According to the World Bank’s September 2026 update, around 824 million people, or 10.1% of the world’s population, lived below the international poverty line of USD 3.00 per person per day in 2024, expressed in 2021 purchasing power parity terms.

Trade and access to markets can support development. Their contribution also depends on institutions, infrastructure, education and the distribution of income. Progress at a global level does not directly reveal how much of it is attributable to the removal of trade barriers.

Global income distribution

180019752015

International dollars per day ·2011 PPP · logarithmic

EuropeAmericasAfricaAsia/Pacific

Source and context

The original graphic reconstructs income distributions from national income, population and within-country inequality. Income is adjusted for purchasing power and inflation; non-market income is included. Curves were traced visually from that graphic. They represent 1800,1975 and 2015 and are not current measurements.

The same applies to futures markets: their economic function needs to be examined separately.

Global progress

Many health indicators have improved over the long term. According to the current World Bank series, life expectancy at birth rose between 1960 and 2024 from 58.0 to 74.7 years in Vietnam, from 39.6 to 67.6 in Ethiopia and from 46.9 to 65.7 in Ghana. Mortality before the fifth birthday has also fallen globally over several decades, although progress has slowed recently. Developments are not uniform across countries or years. Global life expectancy temporarily declined during the COVID-19 pandemic.

These gains deserve recognition. They do not answer every moral criticism of the economic system or establish the effect of a particular form of commodity trading.

The historical chart below shows estimated global income distributions for 1800, 1975 and 2015. It illustrates how many incomes shifted upwards from very low levels. Income and wealth are different measures, however. The chart establishes neither an even distribution of wealth nor that everyone can meet their needs today. It is a historical approximation in international dollars with a 2011 purchasing power basis, not a distribution statistic for 2026.

So what influence do speculators have on commodity prices?

Research reaches different conclusions about speculation and commodity prices depending on the market, period and method. A 2014 FAO paper identifies predominantly fundamental causes in several episodes it examines; a 2011 modelling study by Lagi and colleagues instead attributes a substantial role to speculation. It would therefore be too sweeping to deny critics any empirical basis. Such studies need to be read with their respective assumptions and limitations in mind.

International trade can cushion regional crop failures if alternative sources of supply are accessible. At the same time, international price and supply shocks can be transmitted to domestic markets. Transport capacity, trading conditions and inventories are among the factors that matter. Comparing two precious-metal charts therefore does not establish a general effect of free markets on food prices.

Two distinctions are important for the discussion that follows:

1. A deeper order book can reduce the immediate price impact of a trade; the number of traders alone does not measure this depth.
2. Liquidity and longer-term price volatility are different characteristics of a market.

More trading can mean more executable orders. Whether a market actually becomes more liquid depends on their size, price and availability. The identity of the participants and how they trade are therefore far from irrelevant.

Market depth and the price impact of orders

Consider a simplified example: you are at a market and want to buy eggs. Three sellers offer eggs of identical quality, each with the same quantity. Seller 1 asks EUR 1 per egg, seller 2 asks EUR 2 and seller 3 asks EUR 3. Let us also assume that no new offers appear and nobody changes their prices. You buy from seller 1 first. Once that seller’s stock is exhausted, you move to seller 2 and then seller 3. This is a constructed teaching example, not a description of an observed market.

Under these assumptions, the lowest available egg price is initially EUR 1. Once those eggs have been sold, it is EUR 2; once that stock is exhausted too, it is EUR 3. At the lowest price, only one seller’s quantity is available at a time. How quickly it sells also depends on how many eggs buyers demand.

Now imagine 30 sellers instead of three, still with the same quantity per seller. The first 15 ask EUR 1 per egg, another ten ask EUR 2 and the remaining five ask EUR 3. All other assumptions stay the same. What changes?

More quantity is now available at EUR 1. With the same demand, it therefore takes longer to exhaust this quantity. This illustrates market depth. It does not prove that every market with more participants experiences less fluctuation over the long term: real exchanges receive new orders, while others are changed or withdrawn.

Exchanges bring buy and sell orders together. A trader who places an executable passive limit order can provide liquidity; an immediately executed marketable order consumes available liquidity. A speculator is therefore not automatically a liquidity provider in every transaction. A liquid futures market can make hedging easier, but it does not guarantee stable commodity prices.

Producers, processors and other market participants use futures to hedge price risks. A producer might hedge a selling price, while a processor hedges future input costs. Speculators can take on risks and contribute to trading. How affordable and accessible a hedge is depends on the particular market and its conditions.

Exchange trading can be understood as bringing buy and sell orders together. This auction process helps explain how different interests meet. To assess the price impact, however, order size, market depth and the particular conditions must also be considered. This alone does not provide a general rule for a trader’s influence.

Scalpers, daytraders and algorithmic trading systems often operate over short time horizons. Depending on their orders, they can provide or consume liquidity. Their influence on prices cannot be determined from holding periods alone. Even short-term orders moving in the same direction can have a noticeable price impact in a thin market.

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Speculators and price movements

Longer-term price movements depend on several factors, including supply, demand, inventories and expectations. They do not necessarily require a single well-capitalised trader. There is therefore no basis for ruling out the influence of speculators in general. Regulators also consider the risks of excessive speculation; that likewise does not establish that every speculative transaction causes a specific supply crisis.

The historical gold and tungsten charts show different price paths. These commodities differ in their uses and supply structures, among other things. Without matching periods, price definitions and a transparent measure of volatility, no general effect of speculators can be inferred. Tungsten is also not an agricultural commodity. A more volatile chart therefore establishes neither greater power over farmers nor its cause. The illustration should be read as a historical comparison with these limitations.

Another disputed question is whether speculation can affect the price level. It is sometimes claimed that speculators want to drive commodity prices permanently upwards. Yet speculative actors do not have uniform interests. Neither this sweeping attribution nor its complete rejection follows merely from the existence of buyers and sellers.

Investment

Buying a newly issued share can provide capital to the company. If you buy an already traded share on the secondary market, however, the purchase price generally goes to the seller. You acquire an ownership interest in the company and can participate in its development through distributions or price changes, for example. A profit is not certain. A seller can also have very different reasons for selling later: realising a gain, limiting a loss, needing money or changing their portfolioThe portfolio is the collective term for all assets owned by a client, a company or an investment fund.. The sale alone does not reveal their previous returns.

A previous capital gain for the seller is therefore by no means a prerequisite for this trade.

Speculation

Every open future has a long position and a short position. The contract’s price changes affect their profits and losses in opposite directions. Their overall economic objectives can nevertheless differ, for example when a position hedges a transaction in physical goods.

Shares can also be traded on expectations of rising or falling prices. Speculation is not necessarily short-term, and its participants do not all pursue the same direction. The ability to go long or short establishes neither a continuous rise in prices nor its impossibility. Historical charts show particular past patterns; they do not establish a general law under which commodity prices always stay within fixed ranges.

Example: historical maize prices

The chart below uses monthly World Bank reference prices for U.S. maize, yellow, No. 2 grade, f.o.b. U.S. Gulf ports, in USD per tonne from 1974 to 2020. It shows nominal prices in physical commodity trading, not OHLC prices for a particular futures contract or a reconstructed sequence of futures rolls. For the 2007/2008 food-price crisis, the USDA identifies several interconnected factors, including energy and production costs, demand for bioenergy, weather and policy responses. A price chart alone does not determine the contribution of these factors or speculative behaviour, however. The historical series also does not establish that the price level remained unchanged through 2026.

The prices shown are not adjusted for inflation. They therefore do not directly reveal how the real purchasing power of a maize price changed. That would require a suitable deflator, a base year and a transparent calculation method. A freely drawn line does not replace this calculation. The chart therefore contains no purported real-price series; it initially allows a comparison of nominal historical reference prices.

Speculators have different interests: some positions benefit from rising contract prices, others from falling prices.

The CoT reports can be used to examine which trader groups hold which open positions in a particular market. Open positions do not directly measure liquidity or the cause of a price movement, however. They do not establish a general dominance of commercial traders in every market.

A futures contract has a long side and a short side.

Another criticism concerns the burden higher food prices place on poor households. Yet households are not all in the same position.

Writing for IFPRI in 2014, Derek Headey reported a statistical association between higher domestic food prices and lower poverty after economic adjustments. He also identified uncertainty about the mechanism and possible short-term disadvantages. This is an important finding for the discussion, but it does not establish a universal benefit from every price increase.

A household may produce food, buy food for itself and also earn income from work. Higher selling prices can increase revenue; higher purchase prices add to expenditure. Production costs and possible wage adjustments also matter. Whether a household benefits overall depends on this combination and the period considered. This is precisely why a poor country cannot be assumed to experience the same effect for everyone living there.

A study published in 2023 by Headey and Hirvonen examined 33 middle-income countries over 2000–2019. It found a conditional association between higher domestic food prices and lower poverty, particularly in more agrarian countries. The authors explicitly state that they do not establish causation. The studies also do not demonstrate that futures trading causes this prosperity effect. Futures markets can offer price information and hedging opportunities; actual access and effective use are separate questions. Other research by Headey and Ruel also identifies risks to children’s nutrition from food inflation. Poverty rates and nutritional status are different outcomes that should be considered together.

Digital information services can make market and price data more accessible to producers. But access is not uniform: technology, network coverage, costs and skills create constraints. Information alone does not provide access to a futures market or effective hedging.

Research examines links between speculative behaviour, food prices and supply crises using different methods and reaching different conclusions. A price study does not establish that a single futures transaction causes hunger. Conversely, saying there are no empirical indications at all would be too sweeping. The market, period, people affected and other causes need to be identified.

Infrastructure, storage, distribution, policy interventions, conflict and institutional conditions also need to be considered in supply crises. Their importance depends on the particular case. They deserve attention, but they do not rule out a possible contribution from financial markets in advance. We should therefore not turn a single explanation into an answer to every supply crisis.

Government interventions can disconnect domestic food prices from international markets. Their effects need to be assessed for the particular period: relief within individual countries can amplify international price fluctuations when several countries intervene at once. World-market, spot and futures prices should also not be treated as equivalent without checking. A quantitative country comparison therefore requires comparable products, dates, currencies and an identified price source.

Post-harvest losses are another relevant problem. India’s official 2022 NABCONS survey reports different rates for different products, such as 3.89–5.92% for cereals and 6.02–15.05% for fruit. These figures relate to defined post-harvest losses. They are not a proportion of all food rotting before reaching the market; nor can individual product ranges be combined into a blanket overall rate.

In my view, these issues deserve closer consideration. In a 2015 commentary, Philip Booth argues that the debate should not focus exclusively on financial markets. According to his current profile at St Mary’s University, he is Professor of Catholic Social Thought and Public Policy. His position can contribute a perspective, but it does not replace scrutiny of individual claims. One principle therefore remains important for our own assessment:

Commodity trading cannot be morally justified by a price chart alone, nor can it be blamed indiscriminately for supply crises. What matters is the function a transaction serves and which consequences can actually be substantiated.