[Federal Register: November 12, 1999 (Volume 64, Number 218)]
[Page 61607-61608]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]



Proposed Amendments to Chicago Board of Trade Rough Rice Futures
Contract Regarding Quality Specifications for Deliverable Rough Rice

AGENCY: Commodity Futures Trading Commission.

ACTION: Notice of availability of proposed amendments.


SUMMARY: The Chicago Board of Trade (CBT or Exchange) has proposed
amendments to the Chicago Board of Trade rough rice futures contract.
The proposed amendments were submitted under the Commission's 45-day
Fast Track procedures which provides that, absent any contrary action
by the Commission, the proposed amendments may be deemed approved on
December 16, 1999. 45 days after the Commission's receipt of the
proposals. The Acting Director of the Division of Economic Analysis
(Division) of the Commission, acting pursuant to the authority
delegated by Commission Regulation 140.96, has determined that
publication of the proposals for comment is in the public interest,
will assist the Commission in considering the views of interested
persons, and is consistent with the purpose of the Commodity Exchange

DATES: Comments must be received on or before November 29, 1999.

ADDRESSES: Interested persons should submit their views and comments to
Jean A. Webb, Secretary, Commodity Futures Trading Commission, Three
Lafayette Centre, 21st Street, NW Washington, DC 20581. In addition,
comments may be sent by facsimile transmission to facsimile number
(202) 418-5521, or by electronic mail to [email protected] Reference
should be made to the proposed amendments to the CBT rough rice futures

FOR FURTHER INFORMATION CONTACT: John Bird of the Division of Economic
Analysis, Commodity Futures Trading Commission, Three Lafayette Centre,
21st Street NW, Washington, DC 20581, telephone (202) 418-5274.
Facsimile number: (202) 418-5527. Electronic mail: [email protected]

SUPPLEMENTARY INFORMATION: The existing terms of the rough rice futures
contract provide for the delivery of rough rice meeting the official
U.S. grade standards promulgated by the United States Department of
Agriculture for U.S. No. 2, or better, long grain rice. The standards
for U.S. No. 2 grade rice specify a maximum level for stained rice of
1.5 percent, which is equivalent to approximately 300 stained kernels
in a 500 gram sample containing approximately 20,000 kernels. The
standards for U.S. No. 2 grade rice also permit two heat-damaged
kernels in a 500-gram sample.
    The proposed amendments will reduce the quantity of stained rice
permitted in rough rice deliverable on the futures contract and will
prohibit delivery of rough rice which contains heat-damaged rice. The
proposed amendments will specify that deliverable rough rice may
contain no more than 10 stained and light stained kernels in a 500-gram
sample and that no more than five kernels of these 10 kernels may be
stained. No heat-damaged kernels will be permitted in deliverable rice.
    The Exchange intends to apply the proposed amendments to all newly
listed contract months following Commission approval.
    The CBT indicates that the proposed amendments will improve the
pricing accuracy and efficiency of the rough rice futures market. The
Exchange notes, in this regard, that the futures contract's existing
terms provide for the delivery of rough rice containing a maximum of
about 300 kernels of stained rice and two heat damaged kernels in each
500 gram sample of rice. The CBT indicates, however, that the vast
majority of rough rice traded in the domestic and export markets is
free of stained and heat damaged kernels. The Exchange also notes that
rice which contains any amount of stained beyond five lightly stained
kernels is normally traded at prices significantly below that of rice
that is free of stain. The Exchange indicates that futures prices
currently may reflect the value of rough rice containing stained/heat
damaged rice in excess of normal cash market standards, since
deliverers have tended to deliver

[[Page 61608]]

such rice on the futures contract. The CBT indicates that, as a result,
the proposed standards for stained and heat damaged rice will allow the
futures contract's prices to reflect more closely the majority of rough
rice traded in the cash market.
    The Commission is especially interested in comments regarding the
degree to which the proposed specifications reflect specifications
ordinarily observed in the cash market and the extent to which, if any,
the proposed amendments will affect deliverable supplies for the
futures contract.
    Copies of the proposed amendments will be available for inspection
at the Office of the Secretariat, Commodity Futures Trading Commission,
Three Lafayette Centre, 21st Street NW, Washington, DC 20581. Copies of
the proposed amendments can be obtained through the Office of the
Secretariat by mail at the above address, by phone at (202) 418-5100,
or via the Internet on the CFTC website at www.cftc.gov under ``What's
    Other materials submitted by the CBT in support of the proposal 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 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 amendments, or with respect to their other
materials submitted by the CBT, should send such comments to Jean A.
Webb, Secretary, Commodity Futures Trading Commission, Three Lafayette
Centre, 21st Street NW, Washington, DC 20581 by the specified date.

    Issued in Washington, DC, on November 5, 1999.
John R. Mielke,
Acting Director.
[FR Doc. 99-29579 Filed 11-10-99; 8:45 am]

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