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January 28, 2008 

Mr. David Stawick 

Secretary 

Commodity Futures Trading Commission 

Three Lafayette Centre 

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Washington, DC 20581 

RICHARD L. BOND 

PRESIDENT & CHIEF 

EXECUTIVE OFFFICER 

COMMENT 

RE: Risk Management Exemption From Federal Speculative Position Limits 

Dear Mr. Secretary: 

On behalf of Tyson Foods, Inc., thank you for the opportunity to present comments on 

the proposed rulemaking to allow for certain types of funds Risk Management Exemption 

From Federal Speculative Position Limits. Our firm is one of the country's largest com 

and soybean meal end-users. As such, it is vital that the financial markets reflect the 

fundamentals of the supply and demand for the grain markets. Based on the current 

money flows into agricultural c9mmodities, we believe that allowing certain types of 

positions held by funds to be classified as "riskmanagement positions" will further 

encourage more speculation to occur in these commodities. This in turn will cause 

increased distorted price action and a continued increase in unwarranted volatility for 

end-users like us. · 

Regardless of the type of fund and its stated purpose, the original invested equity moving 

into funds is always invested as speculative money. That money moves into the hands of 

a fund, whether traded actively or passively, does not riegate the fact that the original 

money and purpose for that money was speculative. , 

There seems to be a virtual endless supply of such speculative capital, and that capital 

already is dominating the agricultural futures markets today. There are agricultural 

markets where the entire U.S. crop is traded almost on a daily basis adding unnecessarily 

to volatility, which does impact both pricing and hedging performance of markets. The 

ultimate value of hedging is to allow grain to move from producers to ultimate 

consumption at a lower risk and maximlim efficiency, thereby creating better returns for 

producers and lower pric~s for consumers. Recent dramatic increases in volatility and 

growing investm,ent by large, nontraditional market participants have dramatically raised 

t}le risk and cost of moving grain through the system. · · 

2210 WEST OAKLAWN DRIVE • SPRINGDALE, ARKANSAS 72762-6999 

(479) 290-2970 • emaiL richard.bond@tyson.com 
If the CFTC allows for certain types of funds to be exempted from regulated speculative 

limits, the trading volume will continue to increase and significant daily price swings will 

be further encouraged. 

In addition, because ofborrowing limitations, many companies -large and small- are 

significantly reducing bids, or eliminating bids altogether, on deferred grain purchases. If 

this trend continues, it defeats the fundamental purpose of futures coupled with the cash 

forward exclusion to provide producers access to deferred cash sales to manage price 

risks. 

With this in mind, we recommend that CFTC not adopt the proposed rule change related 

to the hedge exemption for funds, with the understanding that agricultural futures markets 

were established with an economic purpose to serve as efficient, central public pricing 

and hedging vehicles for grain and oilseeds. That purpose is not being fulfilled as well as 

it should be under today's conditions, and the current broadened definition of hedging to 

include certain types of funds has contributed to this situation. 

In sum, this proposed rulemaking by the CFTC is not beneficial to the end user 

community. Since Tyson Foods, Inc. is a significant end-user, we do not support 

allowing for certain types of funds to be classified as risk managers. 

Again, thank you for allowing us to share our comments. If you have further questions, 

please feel free to contact me. 

Sincerely, 

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