Opening Statement of Chairman Michael V. Dunn, Meeting of the Agricultural Advisory Committee

October 29, 2009

Welcome to the Agricultural Advisory Committee of the CFTC. This is the 33rd meeting of this advisory committee. The main subject of today’s meeting is convergence in the CBOT Wheat futures contract.

On April 22nd of 2008 the CFTC held an Agricultural Forum to address concerns about the volatility of the agricultural markets in the fall of 2007. At that forum I asked who was responsible for fixing the problems identified. I stated that “I don’t think there’s a silver bullet or single solution for what ails the market place. And certainly the solutions that come up cannot be implemented overnight. But I firmly believe that the market participants are the best qualified to come up with solutions that will ensure that we have viable, fair agricultural futures markets that will provide for price discovery and risk mitigation.”

This morning you will see a chronology of how the market participants have worked together. As I predicted solutions did not come overnight. However, there has been a continued commitment by the industry to work together to seek viable solutions to the convergence concerns in the Chicago wheat contract. I commend all of those dedicated folks that have been working on this effort.

Today, we meet to discuss a variable storage rate proposal that mostly everyone agrees is the next step in the multi-year effort to solve the convergence issue. As with everything, including the variable storage rate proposal, the devil is in the details and the implementation date of this proposal has been a point of contention between the exchange that owns the contract and some of the users who rely upon it. I look forward to hearing from both sides of this debate today. I am hopeful that the discussions we have will help guide the AAC and the Commission as it moves forward to resolve the convergence problem.

I want to thank all the AAC members and the presenters for your time, effort and advice on these matters. I particularly would like to thank everyone who volunteered and was chosen to serve on the AAC Subcommittee on Convergence who will present its report and recommendations today. The Subcommittee’s report should not be viewed as a precursor to Commission action, but it will be used as an important source of information on the convergence issue.

My commitment to you is to listen with an open mind to your thoughts on everything we discuss today. Again, thank you in advance for you participation.

Last Updated: June 10, 2010