I'll take a stab at it although don't claim to have the answer.

I think you have valid concerns. The up side is we get a chance to price at a higher level. The down side is when the extra market participants decide grains are not the place to be the exit door might get crowded and the downside most likely will be lower than if they had never "invested". So in my minds eye any speculation that causes prices to rise has to be paid by someone if those speculators never take delivery and consume (which they do not). That could be the end user (consumer) paying higher prices or the speculators loosing money when the market over-corrects to the down side. In a zero sum game for every winner there has to be a looser. It is either going to be the speculator, the consumer or the producer.  So if the funds make money either the producer or consumer comes up short. If the investors loose money the opposite.

Now concerning over production or storage, certainly if higher prices or the prospect of such cause farmers to plant more acres, store their grain longer, or build more bins I can see where it might lead to over production and poorer economic times for farmers.

Increased risk and volatility offers both increased opportunities and increased potential for failure. A good thing for those prepared and capable of handling it, not so good for others. It just makes the game stakes get higher, in my opinion.

John