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[Federal Register: August 5, 1999 (Volume 64, Number 150)]
[Notices]
[Page 42676-42677]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr05au99-67]

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COMMODITY FUTURES TRADING COMMISSION


Proposed Amendments to Chicago Board of Trade Rough Rice Futures
Contract Regarding Locational Price Differentials

agency: Commodity Futures Trading Commission.

action: Notice of availability of proposed amendments to contract terms
and conditions.

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summary: The Chicago Board of Trade (CBT or Exchange) has proposed
amendments to Chicago Board of Trade rough rice futures contract that
would remove the discount for deliveries at non-mill site warehouses.
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 10, 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
publication of the proposals for comment is in the public interest,
will assist the Commission in considering the views of interested
persons, and is consistent with the purposes of the Commodity Exchange
Act.

dates: Comments must be received on or before August 20, 1999.

addresses: Interested persons should submit their views and comments to
Jean A. Webb, Secretary, Commodity Futures Trading Commission, Three
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

[[Page 42677]]

made to the proposed amendments to the CBT rough rice futures contract.

for further information, contact: Please contact John Bird of the
Division of Economic Analysis, Commodity Futures Trading Commission,
Three Lafayette Centre, 1155 21st Street NW, Washington, DC 20581,
telephone (202) 418-5274. Facsimile number: (202) 418-5527. Electronic
mail: [email protected].

supplementary information: The existing terms of the rough rice futures
contract provide for the delivery of rough rice in store at exchange-
designated warehouses located in specified counties of central and
eastern Arkansas. Regular delivery facilities are either co-located
with mills and thus are known as ``mill site warehouses,'' or they are
not co-located with mills and thus are known as ``non-mill site
warehouses.'' Deliveries made at mill site warehouses are made at the
contract price (par) while deliveries made at non-mill site warehouses
are subject to a discount of 15 cents per hundredweight.
    The proposed amendments will remove the current discount applicable
to deliveries at non-mill site warehouses. Thus, rough rice at all
regular warehouses would be deliverable at par. The CBT intends to
apply the proposed amendments to the September 2000 contract month and
all subsequently listed contract months following its receipt of notice
of Commission approval.
    In support of the proposed amendments, the CBT stated that:

    The 15-cent price differential at non-mill site warehouses was
specified to reflect a supposed price differential that existed in
the cash market between mill site and non-mill site warehouses. The
theoretical reason for the price differential was that holders of
warehouse receipts at a mill site could have the rice milled by the
owner of the mill, a process known as ``toll milling.'' According to
several participants in the rice industry, toll milling no longer
takes place to any significant extent, and mills will not mill rice
that they do not own. On June 9, 1999, a consensus was reached by a
rice industry group assembled by the Chicago Board of Trade that
toll milling indeed no longer takes place. The group also agreed
that because toll milling no longer takes place, no differential
exists in the cash-market price between rice at mill sites and non-
mill sites. Therefore, the 15-cent per hundredweight discount for
delivery at non-mill site warehouses is no longer appropriate.

    The Commission requests that commenters address the extent to which
the proposed amendment would reflect the relative value of rough rice
stored at mill site warehouses versus rough rice stored at non-mill
site warehouses and the potential effects of the proposed amendment on
the supply of rough rice likely to be economically available for
delivery on the contract as well.
    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 on the CFTC website at www.cftc.gov under ``What's
New & Pending''.
    Other materials submitted by the CBT 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 CFR 145
(1987)), 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 submitted written data, views, or
arguments on the proposed amendments, or with respect to other
materials submitted by the CBT, should send such comments to Jean A.
Webb, Secretary, Commodity Futures Trading Commission, Three Lafayette
Centre, 21st Street NW, Washington, DC 20581 by the specified date.

    Issued in Washington, DC, on July 20, 1999.
John R. Mielke,
Acting Director.
[FR Doc 99-20150 Filed 8-4-99; 8:45 am]
BILLING CODE 6351-01-M
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