[Federal Register Volume 60, Number 74 (Tuesday, April 18, 1995)]
[Notices]
[Pages 19392-19393]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-9487]
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COMMODITY FUTURES TRADING COMMISSION
Kansas City Board of Trade: Proposed Amendments Relating to
Delivery Locations, Quality Price Differentials, and Loading
Requirements and Fees for the Hard Red Winter Wheat Futures Contract
AGENCY: Commodity Futures Trading Commission.
ACTION: Notice of proposed contract rule change.
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SUMMARY: The Kansas City Board of Trade (``KCBT'') has submitted
proposed amendments to its hard red winter wheat futures contract. The
proposal will: (1) Establish a new delivery point at Hutchinson,
Kansas, with futures deliveries at this location being subject to a
discount of 12 cents per bushel; (2) increase to 3 from 1.5 cents per
bushel the discount for delivery of U.S. No. 3 grade wheat; (3)
increase the minimum daily rate at which regular warehouses must load
out wheat against warehouse receipts issued for futures delivery; and
(4) increase to seven from five cents per bushel the maximum load-out
fees chargeable by the warehouse operator. 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.
[[Page 19393]] DATES: Comments must be received on or before May 18,
1995.
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 changes in the delivery specifications for the hard red winter
wheat 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 hard red winter wheat futures contract
currently provides for delivery at par of U.S. No. 2 grade wheat in
storage or on track in Kansas City, Missouri. The futures contract also
provides for delivery of U.S. No. 3 grade wheat at a discount of 1.5
cents per bushel and U.S. No. 1 grade wheat at a premium of 1.5 cents
per bushel. Currently, the KCBT's rules specify that regular warehouse
operators must load-out a minimum of 15 rail cars per day. The
Exchange's rules also specify that regular warehouse operators may
charge warehouse receipt holders a maximum of 5 cents per bushel for
loading wheat into the holders' transportation equipment from regular
delivery facilities.
The proposed amendments will permit futures delivery at Hutchinson,
Kansas at a discount of 12 cents per bushel. Futures delivery at the
contract's existing Kansas City delivery point will be at par. In
addition, the proposed amendments will increase to 3 cents per bushel
from 1.5 cents per bushel the contract's discount for delivery of U.S.
No. 3 grade wheat.
The proposed amendments also will modify the contract's minimum
load-out requirements for regular warehouse operators by increasing the
minimum load-out rate for all regular warehouses and by requiring that
regular warehouses with higher levels of outstanding warehouse receipts
load out wheat at specified higher minimum load-out rates.
Specifically, for regular warehouses with total outstanding warehouse
receipts representing 4 million or fewer bushels of wheat, the minimum
load-out rate will be 20 hopper rail cars per day and 100 cars per
week. In addition, for each additional 1 million bushels of outstanding
warehouse receipts, the minimum load-out rate will increase by 5 hopper
rail cars per day and 25 cars per week. Finally, the KCBT will increase
the maximum load-out fee to 7 cents per bushel from 5 cents per bushel.
The KCBT proposes to apply the proposed amendments to all newly
listed contract months beginning with the July 1996 wheat futures
contract.
In support of the proposed amendments, the KCBT states that:
[T]he Kansas City terminal market on which our futures are based
has experienced a decline in recent years as have all terminal
markets. This is largely attributable to the deregulation of
railroads and their pricing policies and the ongoing changes in U.S.
farm policy. Both the reduction of government's role in grain
storage and railroad deregulation have served to discourage the
accumulation of wheat in Kansas City. The reduced supply of
deliverable stocks has been aggravated by the relative difficulty of
shipping grain into Kansas City versus the ease of shipping grain
out of the market. The intent of the Board's proposed amendments is
to create a delivery mechanism to reflect cash market conditions
better than the current system does.
The KCBT also indicates that Hutchinson, Kansas, represents the
best of the location choices considered by it for use as a delivery
point. In addition, the KCBT indicates that the proposed 12 cents per
bushel discount for futures delivery at Hutchinson reflects observable
cash market price differentials between Hutchinson and Kansas City.
The Commission is requesting comments specifically in regard to the
extent to which the proposals reflect cash market practices and would
affect the levels of economically deliverable supplies available for
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 KCBT 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 April 12, 1995.
Blake Imel,
Acting Director, Division of Economic Analysis.
[FR Doc. 95-9487 Filed 4-17-95; 8:45 am]
BILLING CODE 6351-01-P