Wheat is among the commodities whose prices have soared.

In late May, following a Senate hearing on oil trading, the Commodity Futures Trading Commission announced its intention to investigate—and eventually more heavily regulate—commodity speculation. The announcement was initially aimed specifically at trading in oil futures, but last week analysts said the commission may soon be probing other commodity markets, including wheat, corn, soybeans and rice, which have all skyrocketed over the past year.

"We will possibly see some more investigations into commodity markets, and you will see (CFTC) at least investigate the rules as they now stand, the loopholes ... that some of the large hedge funds can utilize to skirt around some of the limiting rules," Chad Hart, an agricultural economist with the Center for Agricultural and Rural Development at Iowa State University, told British newspaper The Guardian.

In light of the increased scrutiny and regulation likely to affect commodities trading, it may come as no surprise, then, that several large hedge funds and private investment banks have quietly begun investing large sums in agriculture. Owning the commodity at its source could give investors greater control over both prices and the risks associated with commodity trading. While some institutional investors are investing in farmland, others are buying up grain elevators, which enable them to trade actual bushels of wheat or soybeans rather than financial derivatives, and thereby avoid the regulatory issues associated with speculative commodity trading.

"There is considerable interest in what we call 'owning structure'—like United States farmland, Argentine farmland, English farmland—wherever the profit picture is improving," Brad Cole, the president of Cole Partners Asset Management in Chicago, which runs a fund of hedge funds focused on natural resources, told the The New York Times.

Critics charge that by buying up the actual land and commodities themselves investors will have more power to manipulate food prices. Others are cautiously optimistic that giant ag-focused funds (such as London's Emergent Asset Management, which is raising $400 to $750 million to invest in farmland in sub-Saharan Africa to grow jatropha for biofuel as well as various food commodity crops) could help bring food prices down, provide more agriculture jobs and supply increasing mandates in Europe for biofuel. According to Susan Payne, Founder and CEO of Emergent, the fund has received a very strong response from institutional investors, including pension funds, insurance companies, endowments and some sovereign wealth funds.

Proponents claim the investments will put more money in farmers' pockets as well, but so far giant agribusiness companies such as Cargill and ConAgra seem to be reaping the most benefit through sales of grain elevators. As part of a deal set to close by late June ConAgra will receive $2.1 billion for 66 grain elevators.