[Federal Register Volume 59, Number 218 (Monday, November 14, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-27982]


[[Page Unknown]]

[Federal Register: November 14, 1994]


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COMMODITY FUTURES TRADING COMMISSION

 

Coffee, Sugar & Cocoa Exchange: Proposed Amendments Relating to 
Locational Price Differentials for the Nonfat Dry Milk Futures Contract

AGENCY: Commodity Futures Trading Commission.

ACTION: Notice of Proposed Contract Rule Change.

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SUMMARY: The Coffee, Sugar & Cocoa Exchange (``CSCE'') has submitted 
proposed amendments to its nonfat dry milk futures contract that will 
eliminate all existing locational price differentials for product 
delivered on the futures contract. 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 
comment on this proposal.

DATES: Comments must be received on or before December 14, 1994.

ADDRESSES: Interested persons should submit their views and comments to 
Jean A. Webb, Secretary, Commodity Futures Trading Commission, 2033 K 
Street NW, Washington, D.C. 20581. Reference should be made to the 
proposed elimination of the locational price differentials for the CSCE 
nonfat dry milk futures contract.

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

SUPPLEMENTARY INFORMATION: The nonfat dry milk (NDM) futures contract 
currently provides for delivery of product from processing plants 
located anywhere in the continental United States. Under the contract's 
existing terms, the continental United States is divided into three 
regions for purposes of defining delivery locations: the Western, the 
Central, and the Eastern Regions.1 Delivery at any location within 
the Western Region is at par. Delivery at any location within the 
Central and Eastern Regions may be made at a premiums of 3.5 and 5 
cents per pound, respectively.
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    \1\Under the contract's existing terms, the Western Region 
includes all locations west of longitude 103 degrees West; the 
Central Region includes all locations east of longitude 103 degrees 
West, and west of longitude 82 degrees West; and the Eastern Region 
includes all locations east of longitude 82 degrees West.
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    The proposed amendments will eliminate all of the contract's 
existing locational price differentials, with the effect that delivery 
may be made at any location in the continental United States at par. 
The CSCE proposes to apply the proposed amendments to all currently 
listed contract months following the last contract month in which there 
is an open position on the date that the amendment is made effective 
and to newly listed contract months.
    The CSCE indicates that the proposal to eliminate the locational 
price differentials reflects current cash market pricing conditions. 
The Exchange observes that changes in the pricing of raw milk used to 
produce NDM under Federal milk marketing orders has encouraged a 
significant increase in the production of NDM in the Central and 
Eastern regions. The CSCE indicates that, consequently, these regions 
no longer have their traditional deficits of NDM requiring the purchase 
of product from the Western region and that, as a result, the 
contract's existing locational price differentials no longer reflect 
cash market conditions.
    The Commission is requesting comments specifically in regard to the 
extent to which the proposal to allow delivery of NDM at par at all 
eligible delivery locations in the continental United States falls 
within the commonly observed or expected range of cash market price 
differences between each potential delivery location on the futures 
contract.
    Copies of the proposed amendments will be available for inspection 
at the Office of the Secretariat, Commodity Futures Trading Commission, 
2033 K Street NW, Washington, D.C. 20581. Copies of the amended terms 
and conditions can be obtained through the Office of the Secretariat by 
mail at the above address or by telephone at (202) 254-6314.
    The materials submitted by the CSCE 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 Commission's 
headquarters 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, 2033 K Street 
NW, Washington, D.C. 20581 by the specified date.

    Issued in Washington, D.C. on November 4, 1994.
Blake Imel,
Acting Director, Division of Economic Analysis.
[FR Doc. 94-27982 Filed 11-10-94; 8:45 am]
BILLING CODE 6351-01-P