[Federal Register Volume 59, Number 137 (Tuesday, July 19, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-17547]


[[Page Unknown]]

[Federal Register: July 19, 1994]


=======================================================================
-----------------------------------------------------------------------

COMMODITY FUTURES TRADING COMMISSION

 

Chicago Board of Trade: Proposed Amendments Modifying the Load-
Out Requirements for Grain Delivered Into Barges at Burns Harbor, IN, 
Applicable to the Corn, Wheat, Oats, and Soybean Futures Contracts

AGENCY: Commodity Futures Trading Commission.

ACTION: Notice of proposed contract market rule change.

-----------------------------------------------------------------------

SUMMARY: The Chicago Board of Trade (CBT) has submitted proposed 
amendments to its corn, wheat, oats, and soybeans (``grain'') futures 
contracts regarding the deliverer's options for loading grain into 
barges from regular delivery warehouses at Burns Harbor, Indiana. The 
proposed amendments will modify the delivery procedures so that 
deliverers in Burns Harbor no longer would be allowed to load-out 
futures-delivery grain into barges at regular warehouses operated by 
the deliverer in Chicago as an alternative to loading the delivery 
grain into barges at regular delivery warehouses in Burns Harbor.
    In accordance with Section 5a(a)(12) of the Commodity Exchange Act 
and acting pursuant to the authority delegated by Commission Regulation 
140.96, the Acting Director of the Division of Economic Analysis 
(``Division'') of the Commodity Futures Trading Commission 
(``Commission'') has determined, on behalf of the Commission, that the 
proposed amendments are of major economic significance. On behalf of 
the Commission, the Division is requesting public comment on the 
proposal.

DATES: Comments must be received on or before August 18, 1994.

ADDRESSES: Interested persons should submit their views and comments to 
Jean A. Webb, Secretary, Commodity Futures Trading Commission, 2033 K 
Street, NW., Washington, DC 20581. Reference should be made to the 
CBT's proposed changes in the barge load-out requirements for 
deliveries at Burns Harbor, Indiana, for the corn, wheat, oats, and 
soybeans futures contracts.

FOR FURTHER INFORMATION CONTACT: Frederick Linse, Division of Economic 
Analysis, Commodity Futures Trading Commission, 2033 K Street, NW., 
Washington, DC 20581, telephone (202) 254-7303.

SUPPLEMENTARY INFORMATION: Under the CBT's existing regulations, when 
futures delivery grain in store in regular delivery warehouses in Burns 
Harbor, Indiana is ordered out for shipment by barge, it is the 
obligation of the deliverer to protect the barge freight rate from the 
Chicago Switching District, if so requested by the receiver. The 
existing regulations further specify that the deliverer can protect the 
barge freight rate by either: (1) Making the grain available to load 
into a barge at one regular on-water delivery warehouse operated by the 
deliverer which is located in the Chicago Switching District; or (2) by 
paying the receiver an amount equal to all expenses for the movement of 
the barge from the Chicago Switching District to the Burns Harbor 
Switching District, and the return movement to the Chicago Switching 
District.
    Under the proposed amendments, deliverers will no longer be able to 
exercise the first alternative above; i.e., making futures delivery 
grain available for loading into barges at the warehouse operator's 
Chicago delivery warehouse. As amended, the CBT's regulations will 
continue to require that the deliverer protect the barge freight rate 
from the Chicago switching district by paying the receiver the expense 
of moving barges from Chicago to Burns Harbor and back to Chicago, as 
described above. In addition, the proposed amendments will make the 
requirement that the deliverer protect the barge freight rate from the 
Chicago switching district mandatory, rather than at the request of the 
party taking delivery.
    The Exchange intends to make the changes effective for all existing 
and newly listed contract months following receipt of notice of 
approval from the Commission.
    In support of the proposed amendments, the Exchange stated that:

    The purpose of the proposed regulation changes is to ensure that 
the party taking delivery is not economically disadvantaged by the 
Burns Harbor warehouseman's exercise of the option to provide barge 
load-out in Chicago. For example, under the current regulation[,] 
the Burns Harbor warehouseman has the right to switch its barge 
load-out obligations to Chicago even if the load-out lineup at 
Chicago is longer than at Burns Harbor. Assuming a 3-day lineup for 
barge load-out exists at Burns Harbor and a 10-day lineup exists at 
the Chicago warehouse, the taker of delivery would incur an 
additional 7 days costs for demurrage and storage if the 
warehouseman chooses to load-out the barge in Chicago * * * .
    The proposed regulation change will ensure that takers of 
delivery at Burns Harbor who request barge load-out receive grain 
with the same value as takers of delivery at Chicago, and thus, will 
improve the fairness between makers and takers of delivery on the 
[CBT] grain contracts.

    The Commission is requesting comments on the proposed amendments 
specifically in regard to: (1) the extent to which, if any, the 
proposed amendments will affect the level of deliverable supplies 
available for the CBT's corn, wheat, oats and soybeans futures 
contracts; and (2) the extent to which, if any, the application of the 
proposed amendments to all currently listed contract months will affect 
the value of existing positions in such months or impair the ability of 
futures deliverers and receivers to carryout their rights and 
obligations under these existing futures contracts.
    Copies of the proposed amendments will be available for inspection 
at the Office of the Secretariat, Commodity Futures Trading Commission, 
at the above address. Copies of the amended terms and conditions can be 
obtained through the Office of the Secretariat by mail at the same 
address or by telephone at (202) 254-6314.
    The materials submitted by the CBT in support of the proposed 
amendments may be available upon request pursuant to the Freedom of 
Information Act (5 U.S.C. 552) and the Commission's regulations 
thereunder (17 CFR Part 145 (1987)). Requests for copies of such 
materials should be made to the FOI, Privacy and Sunshine Act 
Compliance Staff of the Office of the Secretariat at the above address 
in accordance with CFR 145.7 and 145.8.
    Any person interested in submitting written data, views, or 
arguments on the proposed amendments should send such comments to Jean 
A. Webb, Secretary, Commodity Futures Trading Commission, at the above 
address by the specified date.

    Issued in Washington, DC, on July 13, 1994.
John R. Mielke,
Acting Director Division of Economic Analysis.
[FR Doc. 94-17547 Filed 7-18-94; 8:45 am]
BILLING CODE 6351-01-P