NORTHFIELD, ILLINOIS, U.S. — Kraft Foods Group Inc. and Mondelez International Inc. have petitioned a judge to dismiss two counts in a case filed by the U.S. Commodity Futures Trading Commission (CFTC) that alleged the companies manipulated wheat prices, Reuters news agency reported on June 2.
The CFTC filed a civil enforcement claim on April 1 against Kraft Foods and Mondelez alleging manipulation and attempted manipulation of futures and cash wheat prices, exceeding peculative position limits in Chicago Board of Trade (CBOT) wheat futures, and engaging in numerous noncompetitive trades in CBOT wheat.
Kraft made reasonable business decisions to maintain a steady wheat supply in the face of a "dysfunctional" wheat market where cash prices bore little relation to those on the futures market, the companies said in a court filing on June 1.
The company's actions in 2011 "tell a straightforward story of a snack-food company doing the best it could to purchase wheat at sound prices in a difficult market," they said.
Kraft spun off its snacks business into Mondelez in 2012. CFTC's complaint focused primarily on trading that occurred before the split.
The companies sought dismissal of the two counts saying CFTC's allegation that wheat prices changed as a result of Kraft's transactions was insufficient to infer it deceived or manipulated the market, Reuters reported.
Also, Kraft's attempt to obtain the best wheat price necessarily means it lacked the "ability" or "intent" to create an "artificial price," the companies said in the filing.