A Senate investigative committee has concluded that excessive speculation by commodity index investors has inflated the price of wheat and distorted trading in the wheat futures markets. In a report to be released on Wednesday, the Senate Permanent Subcommittee on Investigations will recommend that regulators sharply limit the amount of futures trading by index investors. The report offers what its authors called 'significant and persuasive evidence' that these index investors were 'one of the major causes' of higher wheat prices and episodic gaps that occurred between futures market prices and prices in the cash market for wheat. Index funds operate in the futures markets under waivers from the Commodity Futures Trading Commission, which ruled that they were legitimately hedging their financial exposure to the commodity index products they sell to investors. The report recommends that the commission revoke those waivers and subject index traders to the limits imposed on other speculators. Although that policy change would not require congressional action, it has the backing of the subcommittee chairman, Sen. Carl Levin, D-Mich., and Sen. Tom Coburn of Oklahoma, the panel's ranking Republican. It also has the support of Dan M. Berkovitz, who worked on the report as counsel to the Senate investigative panel and is now the CFTC's general counsel. But the report's conclusion is disputed by some recent academic research, which suggests that storage rates and contractual terms covering the delivery arrangements for wheat are more likely the root causes of these distortions in the futures market. In a recent report, a team of professors at the University of Illinois at Urbana-Champaign noted that 'index fund positions did not appear to change much after reaching a peak in 2006' although there was 'considerable variability' in the magnitude of the price disparities attributed to the index fund trading. 