[Federal Register Volume 60, Number 229 (Wednesday, November 29, 1995)]
[Notices]
[Pages 61245-61246]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-29127]
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COMMODITY FUTURES TRADING COMMISSION
Chicago Mercantile Exchange: Proposed Amendments to the Frozen
Pork Bellies Futures Contract
AGENCY: Commodity Futures Trading Commission.
ACTION: Notice of availability of proposed amendments to the terms and
conditions of a futures contract.
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SUMMARY: The Chicago Mercantile Exchange (CME or Exchange) has proposed
amendments to its frozen pork bellies futures contract. The proposed
amendments would change the definition of the par delivery unit and
revise the discounts applicable to non-par frozen pork bellies.
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 public comment on the
proposal.
DATES: Comments must be received on or before December 29, 1995.
ADDRESSES: Interested persons should submit their views and comments to
Jean A. Webb, Secretary, Commodity Futures Trading Commission, 2033 K
Street NW., Washington, DC 20581. Reference should be made to the
proposed amendments to the CME frozen pork bellies futures contract
regarding weight differentials.
FOR FURTHER INFORMATION CONTACT: Please contact Fred Linse of the
Division of Economic Analysis, Commodity Futures Trading Commission,
Three Lafayette Centre, 1155 21st Street NW., Washington, DC 20581,
telephone 202-418-5273.
SUPPLEMENTARY INFORMATION: The frozen pork bellies futures contract
currently provides for the delivery at par of 40,000 pounds of either
\12/14\ or \14/16\-pound frozen pork bellies. Delivery of \16/18\ pound
frozen pork bellies is permitted at a discount of 2.5 cents per pound.
Under the proposed amendments, \12/14\-pound frozen pork bellies
would be deliverable at a discount of 1.5 cents per pound, rather than
at par as currently specified. In addition, the proposed amendments
would reduce to 1.5 from 2.5 cents per pound the existing
[[Page 61246]]
discount applicable to the delivery of \16/18\-pound frozen pork
bellies. Frozen pork bellies in the \14/16\-pound weight range would
continue to be deliverable at par under the proposal.
The CME intends to implement the proposed amendments with respect
to the February 1997 contract month and all subsequent contract months
upon receipt of Commission approval.
According to the Exchange, the contract's present discount
structure encourages the delivery of lighter, less desirable bellies
and discourages the delivery of heavier, more desirable bellies. The
Exchange said that the proposed amendments are intended to correct this
situation.
The Exchange also stated that:
The price differential between the \12/14\ [pound] and \14/16\
[pound] bellies in the fresh market is volatile. However, the
average is approximately zero . . . because sausage makers buy
whichever size is the cheapest, which off-sets the weak demand for
the \12/14\ pound bellies by slicers.
The \16/18\ [pound] belly is less desirable than the \14/16\
[pound belly], all other things being the same, because not all
slicers are equipped to handle the larger bellies. This is reflected
by the price differential which averages 1.6 [cents per pound]. . .
. Therefore, the proposed 1.5 [cents-per-pound] discount brings the
contract in line with industry practices and cash market
differentials.
The Exchange indicated that the proposals will not reduce the
deliverable supply of frozen pork bellies for the contract.
The Division is requesting comment with respect to the extent to
which the proposed discounts fall within the range of commonly observed
cash price differences between \12/14\ and \14/16\-pound frozen pork
bellies and between \14/16\ and \16/18\-pound frozen pork bellies. In
addition, commenters are requested to address the effect (if any) the
proposed amendments would have on the quantity of frozen pork bellies
likely to be economically available for delivery on the contract.
Copies of the amended terms and conditions 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 terms and conditions can be obtained through
the Office of the Secretariat by mail at the above address or by phone
at (202) 418-5097.
Other materials submitted by the CME 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)), 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 the 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 on the proposed terms and conditions, 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., 20581 by the specified date.
Issued in Washington, DC, on November 20, 1995.
Blake Imel,
Acting Director.
[FR Doc. 95-29127 Filed 11-28-95; 8:45 am]
BILLING CODE 6351-01-P
