[Federal Register Volume 64, Number 161 (Friday, August 20, 1999)] [Notices] [Pages 45515-45517] From the Federal Register Online via the Government Publishing Office [www.gpo.gov] [FR Doc No: 99-21671] ======================================================================= ----------------------------------------------------------------------- COMMODITY FUTURES TRADING COMMISSION Citrus Associates of the New York Cotton Exchange: Proposed Amendments to the Frozen Concentrated Orange Juice-2 (FCOJ-2) Futures Contract Providing for Delivery of FCOJ Originating in Florida and Brazil Only, Changing the Contract's Quality Specifications and Providing for Trading of the FCOJ-2 Futures Contract at a Price Differential to the Existing FCOJ-1 Futures Contract AGENCY: Commodity Futures Trading Commission. ACTION: Notice of availability of proposed amendments to contract terms and conditions. ----------------------------------------------------------------------- SUMMARY: The Citrus Associates of the New York Cotton Exchange (CANYCE or Exchange) has proposed amendments to the Exchange's dormant frozen concentrated orange juice-2 (FCOJ-2) futures contract. The proposed amendments would provide for the delivery of FCOJ originating in Florida and Brazil only, make the contract's quality specifications conform to the quality specifications of the FCOJ-1 futures contract, amend the contract's speculative position limits, and provide for the trading of the FCOJ-2 futures contract as a differential price spread to the FCOJ-1 futures contract. The Exchange also proposes to recommence trading in this dormant contract pursuant to the provisions for Commission Regulation 5.2. The proposed amendments were submitted under the Commission's 45-day Fast Track procedures which provides that, absent any contrary action by the Commission, the proposed amendments may be deemed approved on September 27, 1999--45 days after the Commission's receipt of the proposals. The Acting Director of the Division of Economic Analysis (Division) of the Commission, acting pursuant to the authority delegated by Commission Regulation 140.96, has determined that the proposed amendments are of major economic significance, within the meaning of section 5a(a)(12) of the Commodity Exchange Act (Act), and that their publication is in the public interest and will assist the Commission in considering the views of interested persons. DATES: Comments must be received on or before September 7, 1999. ADDRESSES: Interested persons should submit their views and comments to Jean A. Webb, Secretary, Commodity Futures Trading Commission, Three [[Page 45516]] Lafayette Centre, 21st Street, NW Washington, DC 20581. In addition, comments may be sent by facsimile transmission to facsimile number (202) 418-5521, or by electronic mail to [email protected]. Reference should be made to the proposed amendments to the CANYCE FCOJ-2 futures contract. FOR FURTHER INFORMATION CONTACT: Please contact John Bird of the Division of Economic Analysis, Commodity Futures Trading Commission, Three Lafayette Centre, 21st Street NW, Washington, DC 20581, telephone (202) 418-5274. Facsimile number: (202) 418-5527. Electronic mail: [email protected] SUPPLEMENTARY INFORMATION: The Exchange currently is designated to trade two FCOJ futures contracts, the actively traded FCOJ-1 futures contract and dormant FCOJ-2 futures contract. The terms and conditions of the FCOJ-1 and FCOJ-2 futures contracts are identical, except with respect to the contracts' quality specifications. In this regard, the FCOJ-1 futures contract provides for the delivery of FCOJ having a Brix value of acid ratio of not less than 14.0 to 1 and not more than 18.0 to 1 and a minimum score of 94, with minimum component quality factors of 37 for color, 37 for flavor, and 19 for defects. In contract, the FCOJ-2 futures contract provides for the delivery of FCOJ having a Brix value to acid ratio of not less than 13.0 to 1 and not more than 19.0 to 1 and a minimum score of 92, with minimum component quality factors of 36 for color, 36 for flavor, and 19 for defects. The existing terms of the FCOJ-1 and FCOJ-2 futures contracts permit delivery of FCOJ of all origins, imported or domestic. In addition, both futures contracts provide for the delivery of shipping certificates, which require the certificate issuers to load FCOJ into transportation equipment provided by the certificate holder. The contracts' delivery points consist of approved delivery facilities located at Wilmington, Delaware; Newark and Port Elizabeth, New Jersey, in 11 specified counties in California; and in 16 specified counties in central Florida. FCOJ is deliverable at par at delivery facilities located in Florida, Wilmington, Newark and Port Elizabeth. FCOJ in delivery facilities in California is deliverable at a discount of 10 cents per pound. Currently, a trader's combined position in the FCOJ-1 and FCOJ-2 futures contracts is subject to speculative position limits of 3,000 contracts in all contract months combined, 1,800 contracts in individual non-spot contract months, and 300 contracts in the spot month. The proposed amendments to the FCOJ-2 futures contract would limit the origins of deliverable FCOJ to FCOJ produced in Florida and Brazil. In addition, the proposed amendments would make the FCOJ-2 futures contract's quality specifications identical to the quality specifications of the FCOJ-1 futures contract, as noted above. The proposed amendments also would provide for the trading of the FCOJ-2 futures contract as a component of a differential price spread between the FCOJ-2 and FCOJ-1 futures contracts (``FCOJ Differential Contracts'') during most of the trading life of an FCOJ-2 contract month. In this respect, the proposed amendments define a long FCOJ Differential Contract as consisting of a long FCOJ-2 futures contract and a short FCOJ-1 futures contract. A short FCOJ Differential Contract is defined as a short FCOJ-2 futures contract and a long FCOJ-1 futures contract. The FCOJ Differential Contract will be traded as a single contract until the second business day preceding the first delivery notice day for the expiring contract month. The proposed amendments would provide that, on the second business day preceding the first delivery notice day for a contract month, each FCOJ Differential Contract position in the expiring contract month will be divided into its component FCOJ-1 and FCOJ-2 positions, i.e., a trader will receive by book entry a long (short) position in the FCOJ-2 futures contract and an opposite short (long) position in the FCOJ-1 futures contract. Trading in the FCOJ-2 futures contract will then continue until the first delivery notice day, with the quoted prices reflecting the value of FCOJ originating in Florida and Brazil (not the price spread differential between the FCOJ-2 and FCOJ-1 futures contracts). Trading in the FCOJ-2 futures contract would end on the first delivery notice day for a contract month and all positions remaining open after the close of trading on that day would be settled by delivery. The proposed amendments would not change the existing trading and delivery notice periods for expiring FCOJ-1 futures contract months. In addition, the proposed amendments will provide for speculative position limits of 3,000 contracts for each of the FCOJ-1 and FCOJ-2 futures contracts in all contract months combined and 1,800 contracts for each of the FCOJ-1 and FCOJ-2 futures contracts in individual non- spot contract months. The spot month speculative position limit would continue to be applicable to a trader's combined gross position in the FCOJ-1 and FCOJ-2 futures contracts. The CANYCE intends to make the proposed amendments effective in October 1, 1999 with the commencement of trading in the revised FCOJ-2 futures contract. In support of the proposed amendments, the CANYCE indicated that the proposal to trade the FCOJ-2 futures contract as a component of a differential price spread between the FCOJ-2 and FCOJ-1 futures contract is intended to avoid diluting the open interest and trading activity in the FCOJ-1 futures contract. The Exchange also indicated that proposal to divide each FCOJ Differential Contract position into its FCOJ-2 futures contract and FCOJ-1 futures contract components two business days before the first notice day of expiring contract months is intended to allow traders sufficient time to adjust their futures positions as necessary. In addition, the CANYCE indicated that, because FCOJ that meets the proposed delivery requirements of the FCOJ-2 futures contract constitutes approximately 90% of all FCOJ currently deliverable on the FCOJ-1 futures contract, there will be an adequate deliverable supply of FCOJ available for the amended FCOJ-2 futures contract. The Division is requesting comments on the proposed amendments to the FCOJ-2 futures contract. Copies of the proposed amendments will be available for inspection at the Office of the Secretariat, Commodity Futures Trading Commission, Three Lafayette Centre, 21st Street NW, Washington, DC 20581. Copies of the proposed amendments can be obtained through the Office of the Secretariat by mail at the above address, by phone at (202) 418-5100, or via the Internet at [email protected]. Other materials submitted by the CANYCE in support of the proposal may be available upon request pursuant to the Freedom of Information Act (5 U.S.C. 552) and the Commission's regulations thereunder (17 C.F.R. Part 145 (1987)), except to the extent they are entitled to confidential treatment as set forth in 17 C.F.R. 145.5 and 145.9. Requests for copies of such materials should be made to the FOI, Privacy and Sunshine Act Compliance Staff of the Office of Secretariat at the Commission's headquarters in accordance with 17 C.F.R. 145.7 and 145.8. Any person interested in submitting written data, views, or arguments on the proposed amendments, or with respect to other materials submitted by the CANYCE, should send such comments to Jean A. Webb, Secretary, Commodity [[Page 45517]] Futures Trading Commission, Three Lafayette Centre, 21st Street NW, Washington, DC 20581 by the specified date. Issued in Washington, DC, on August 16, 1999. John R. Mielke, Acting Director. [FR Doc. 99-21671 Filed 8-19-99; 8:45 am] BILLING CODE 6351-01-M