Correct, and to be clear, that is exactly what Kellogg's, General Mills, Coca-Cola, and other big food companies have been doing for years now. It's not uncommon whatsoever -- if anything, it's considered a best practice -- to hedge on commodities prices if your fundamental business depends on them.

In and of itself, that big food companies deal in commodities futures (call and/or put) is neither surprising nor irrational.

Things start to get scary when speculators dominate the markets for those commodities, and when commodities houses corner markets. The reverberations across various sectors of the economy would be frightening if anything went to shit at even one commodity shop.