[Federal Register: October 30, 2002 (Volume 67, Number 210)]
[Notices]
[Page 66130-66131]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr30oc02-52]

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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 secretary@cftc.gov. 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:
mmurray@cftc.gov

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