CFTC Extends Review Period For CBOT Wheat Contract Changes
The CFTC has said it has extended its review period for proposed changes to the Chicago Board of Trade wheat futures contract by 45 days, until Dec. 4.
Separately, the National Grain and Feed Association, a major U.S. grain trade group, was expected to make a statement this week on how an alternate proposal, "compelled load-out," might work.
Recently announced tinkering with some quality and storage issues are not nearly far-reaching enough for many major market participants, concerned about the lack of divergence at expiration of wheat contracts recently.
The CFTC said in a letter to the exchange dated Friday that it would extend its review "in view of the novel and complex issues" raised by the CME Group's (the owners of CBOT) plan.
In their public comments recently, Cargill Inc. and Bunge Ltd, along with food maker Kraft Foods Inc, said the CME's current proposals would not do enough to ensure price convergence.
Several companies said the exchange should consider compelled load-out, a system of delivery certificates that would require those holding long positions in CBOT wheat futures to load the physical grain out of delivery elevators as each contract nears expiration.
The idea is to prompt those long holders to sell futures to avoid such a scenario -- theoretically pushing front-month futures prices down, closer to cash values.
The National Grain and Feed Association has been studying how such a concept might apply to CBOT wheat.
Separately, the National Grain and Feed Association, a major U.S. grain trade group, was expected to make a statement this week on how an alternate proposal, "compelled load-out," might work.
Recently announced tinkering with some quality and storage issues are not nearly far-reaching enough for many major market participants, concerned about the lack of divergence at expiration of wheat contracts recently.
The CFTC said in a letter to the exchange dated Friday that it would extend its review "in view of the novel and complex issues" raised by the CME Group's (the owners of CBOT) plan.
In their public comments recently, Cargill Inc. and Bunge Ltd, along with food maker Kraft Foods Inc, said the CME's current proposals would not do enough to ensure price convergence.
Several companies said the exchange should consider compelled load-out, a system of delivery certificates that would require those holding long positions in CBOT wheat futures to load the physical grain out of delivery elevators as each contract nears expiration.
The idea is to prompt those long holders to sell futures to avoid such a scenario -- theoretically pushing front-month futures prices down, closer to cash values.
The National Grain and Feed Association has been studying how such a concept might apply to CBOT wheat.