America's threatened crackdown on commodity speculators would cause "irrevocable" economic damage, the head of the world's largest futures exchange operator has warned ahead of a showdown with regulators.

Craig Donohue, chief executive of the CME Group, said the group had not seen any "empirical" evidence that index funds and speculators distort commodity prices, as many politicians have claimed.

"Nor is there any proof that putting position limits on these market participants will have any positive effect on the marketplace," Mr Donohue said.

The comments came ahead of his appearance later on Tuesday before the Commodities Futures Trading Commission, the US derivatives markets regulator, which is considering proposals to cap commodity investors' positions, initially on energy trades.

The move follows a Senate report which blamed oversized positions by index funds, which currently have an estimated $180bn under management, for last year's spike in wheat prices and continued schisms between futures and cash prices of the grain.

Dark pools

Mr Donohue said he was meeting CFTC officials, politicians and industry figures in an attempt to deter ill-designed curbs, which risked driving trade to so-called "dark pools", off-exchange trading venues typically used by institutions, and which do not display public quotes.

"We are deeply concerned that inappropriate regulation... will cause market participants to move to dark pools and other unregulated markets, causing irrevocable harm to the entire US market," said Mr Donohue, whose appearance before the CFTC is scheduled for 13:00 GMT.

The CME, which runs the Chicago Mercantile Exchange, the Chicago Board of Trade and New York's Nymex, is responsible for 98 % of US futures trading.