After the dramatic increase in commodity prices in 2007-2008, a respected hedge fund manager, Michael W. Masters testified before Congress that commodity index investment was exaggerating prices trends by as much as 50%, creating a bubble. European officials blamed speculation for creating hardship and starvation in poor countries.

Thursday at the USDA Agricultural Outlook Forum, University of Illinois agricultural economist Scott Irwin debunked that theory, to the point of comparing it to unicorns.

"I can refute the Masters theory," Irwin said.

But he didn't resort to name calling. Numerous studies by economists have shown that it doesn't hold up, Irwin said.

Irwin showed a few slides of his own as well.

One showed open interest by index funds peaking in 2006, well before wheat futures spiked.

Another plotted wheat futures and long positions.

"That's as close to a scatter shot as you'll ever see. Statistically, there's no correlation," he said.

Irwin added that he's not implying that everything is perfect in the futures markets price discover mechanism.

The markets have changed more since 1995 than in 150 years, he said, with more electronic trading, high frequency trading and the recent addition of real-time release of government reports.

More investigation is needed to show whether or not they are having and effect on price discovery, he said, and it's likely that their influences would affect prices "over seconds to as long as days."

Here's an example of Irwin's own scholarly work on this subject.