[Federal Register Volume 67, Number 210 (Wednesday, October 30, 2002)]
[Notices]
[Pages 66130-66131]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-27605]


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COMMODITY FUTURES TRADING COMMISSION


Chicago Mercantile Exchange (CME): Proposed Amendments to the 
Spot Month Speculative Position Limits for the Live Cattle Futures 
Contract

AGENCY: Commodity Futures Trading Commission.

ACTION: Notice of availability of terms and conditions of proposed 
amendments to the CME's spot month speculative position limits for the 
live cattle futures contract.

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SUMMARY: The Chicago Mercantile Exchange (CME or Exchange) has 
requested that the Commission approve proposed amendments to the spot 
month speculative position limits for the live cattle futures contract. 
The proposal was submitted pursuant to the provisions of section 
5c(c)(2) of the Commodity Exchange Act (Act) and Commission Regulation 
40.4(a). Under the proposal, the speculative position limit that 
applies during the period at the close of business on the first 
business day following the first Friday of the contract month through 
the business day preceding the last five business days would be reduced 
to 300 contracts from 600 contracts. The Exchange intends to implement 
the amendments with respect to positions held in the December 2002 
through the October 2003 contract months.
    The Director of the Division of Market Oversight (Division) of the 
Commission, acting pursuant to the authority delegated by Commission 
Regulation 140.96, has determined that publication of the Exchange's 
proposed amendments for comment 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 November 14, 2002.

ADDRESSES: Interested persons should submit their views and comments to 
Jean A. Webb, Secretary, Commodity Futures Trading Commission, Three 
Lafayette Centre, 1155 21st Street, NW., Washington, DC 20581. In 
addition, comments may be sent by facsimile transmission to (202) 418-
5521 or by electronic mail to [email protected]. Reference should be 
made to the CME's proposed amendments to the spot month speculative 
position limits for the live cattle futures contract.

FOR FURTHER INFORMATION CONTACT: Please contact Martin G. Murray of the 
Division of Market Oversight, Commodity Futures Trading Commission, 
Three Lafayette Centre, 1155 21st Street NW., Washington, DC (202) 418-
5276. Facsimile number: (202) 418-5527. Electronic mail: 
[email protected]

SUPPLEMENTARY INFORMATION: The CME live cattle futures contract's 
speculative position limit rules currently specify an individual 
contract month limit of 3,300 contracts, a ``scale down'' spot month 
speculative position limit of 600 contracts that becomes effective at 
the close of business on the first business day following the first 
Friday of the contract month, and a 300-contract spot month limit that 
becomes effective at the close of business on the business day 
immediately preceding the last five business days of the expiring 
contract month.\1\ The proposed amendments will eliminate the ``scale 
down'' limit of 600 contracts, and require that speculative positions 
be reduced immediately to 300 contracts as of the close of business on 
the first business day following the first Friday of the contract 
month.
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    \1\ The last trading day is the last business day of the 
contract month. Delivery notices may be issued beginning with the 
first business day following the first Friday of the contract month.
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    In support of the proposal, the Exchange states that the proposed 
level

[[Page 66131]]

is ``more in balance with deliverable supplies'' for the live cattle 
futures contract. In particular, the Exchange states that deliverable 
supplies of live cattle meeting the futures contract's existing weight 
specifications have been adversely impacted by the ``significant 
increase in slaughter weights of cattle in the U.S.'' As a result, ``a 
growing proportion of the U.S. fed steer population is rapidly becoming 
ineligible for delivery against the Live Cattle contract.'' In this 
regard, the futures contract does not permit the delivery on a live-
graded basis of individual steers weighing more than 1,350 pounds (or 
1,375 pounds effective with the June 2003 contract month). However, the 
average carcass weight for steers has increased steadily in recent 
years, and in August 2002 was 837 pounds, for a live-weight equivalent 
of 1,329 pounds.
    The Exchange has proposed to implement the subject proposed 
amendments only for existing contracts, beginning with the December 
2002 contract month through the October 2003 contract month. The 
Exchange has separately notified the Commission that it will delay 
listing of the December 2003 contract month, pending its consideration 
of additional contract changes. In this regard, the Exchange notes that 
it is contemplating amendments that will increase the weight 
specifications for the live cattle futures contract to accommodate the 
higher observed weights in the cash market and will make additional 
amendments to the spot-month speculative position limits.
    The Division is requesting comment on the proposal. Copies of the 
Exchange's proposed amendments will be available for inspection at the 
Office of the Secretariat, Commodity Futures Trading Commission, Three 
Lafayette Centre, 1155 21st Street, NW., Washington, DC 20581. Copies 
of the proposed amendments can also be obtained through the Office of 
the Secretariat by mail at the above address or by phone at (202) 418-
5100.
    Other materials submitted by the CME in support of the request for 
approval may be available upon request pursuant to the Freedom of 
Information Act (5 U.S.C. 552) and the Commission's regulations there 
under (17 CFR part 145 (2000)), except to the extent they are entitled 
to confidential treatment as set forth in 17 CFR 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 CFR 145.7 and 
145.8.
    Any person interested in submitting written data, views, or 
arguments pertaining to the proposed amendments or with respect to 
other materials submitted by the CME should send such comments to Jean 
A. Webb, Secretary, Commodity Futures Trading Commission, Three 
Lafayette Centre 1155 21st Street, NW., Washington, DC 20581 by the 
specified date.

    Issued in Washington, DC on October 24, 2002.
Michael Gorham,
Director.
[FR Doc. 02-27605 Filed 10-29-02; 8:45 am]
BILLING CODE 6351-01-M