By Todd Kemp, Senior Vice President of Marketing and Treasurer As reported previously in the NGFA Newsletter, the omnibus spending bill for fiscal year 2018 was enacted on March 23, and included a legislative solution to correct the unintended consequences of Section 199A in the tax law passed in December 2017. In broad terms, the legislation replicated as closely as possible the tax benefits of the previous Section 199 that existed for cooperatives and their farmer-patrons, while at the same time restoring the competitive landscape of the marketplace that existed in December ... Read More
Risk Management
Grain futures market users voice concerns over CME Group’s block trading during CFTC Agricultural Advisory Committee Meeting
During a Commodity Futures Trading Commission (CFTC) Agricultural Advisory Committee meeting in Kansas this week, grain industry representatives voiced concerns to CME Group Inc. representatives about block trades, which they say reduce transparency in agricultural futures markets. The committee meeting, chaired by CFTC Commissioner Russ Behnam, also included Chairman Christopher Giancarlo and Commissioner Brian Quintenz. CME, which owns the Chicago Board of Trade and the Chicago Mercantile Exchange, began allowing privately negotiated block trades in corn and wheat markets in ... Read More
CME Group solicits NGFA members’ feedback on corn, wheat contracts
By Todd Kemp, Senior Vice President of Marketing and Treasurer The CME Group is in the process of evaluating potential changes to two of its core agricultural contracts – the CBOT corn contract and the KC hard red wheat contract. Led by the Risk Management Committee, the NGFA has provided feedback to CME throughout its review processes (including a letter submitted in Nov. 2014 with NGFA’s recommendations on the corn contract). CME’s review of the KC wheat contract is more recent, with potential changes just now being unveiled; the NGFA has not provided formal input to CME on that contract ... Read More
NGFA mounts final advocacy blitz at CFTC on speculative position limit rule
By Todd Kemp, Senior Vice President of Marketing and Treasurer A delegation of seven members of NGFA’s Risk Management Committee traveled on Nov. 29 to Washington for meetings with the three current CFTC commissioners (two vacancies remain unfilled) and their senior staffs focused on the pending final rule that would implement position limits on a broad range of commodities (in addition to grain and oilseed futures contracts that have operated successfully for decades with position limits). The effort was a follow-on to earlier meetings with the commission in late June by another ... Read More
CFTC to meet Friday on “Reg AT” supplemental proposal
By Todd Kemp, Senior Vice President of Marketing and Treasurer The Commodity Futures Trading Commission (CFTC) will convene a public meeting on Nov. 4 to consider a supplemental proposal regarding a new regulatory regime for automated trading, including high-frequency electronic trading. An earlier proposal, published by the CFTC on Dec. 17, 2015, was the first attempt ever by the agency to establish regulatory oversight of automated trading. Among other concerns, that proposal generated consternation among high-frequency trading firms that would have been required to divulge source code ... Read More
Senate Ag Committee conducts CFTC confirmation hearing
By Todd Kemp, Senior Vice President of Marketing and Treasurer Taking action to address two Commodity Futures Trading Commission (CFTC) vacancies, the Senate Agriculture Committee on (insert date) conducted a confirmation hearing for two pending nominees to be CFTC commissioners. However, in an election year that brings limited time for consideration on the Senate floor and a high level of partisan rancor, action in committee is no guarantee of confirmation this year by the full Senate. The nominees: Brian Quintenz is the Republican nominee for the seat vacated two years ago by Scott ... Read More
NGFA seeks adjustments to CFTC’s supplemental position limits rule
WASHINGTON, July 14, 2016 -- The National Grain and Feed Association (NGFA) recommended in comments to the Commodity Futures Trading Commission (CFTC) that the agency make a number of adjustments to the proposed supplement to its proposed position limits rule, after identifying several areas of concern to commercial grain hedgers. As noted in the comments sent to the Commission, the outcome of the supplemental rulemaking is vitally important for NGFA’s member firms – bona fide hedgers who are managing physical commodity risk and who depend on futures markets for price discovery and risk ... Read More
NGFA advocates on CFTC position limit rule
By Todd Kemp, Senior Vice President of Marketing and Treasurer On June 29, eight members of the NGFA’s Risk Management Committee met in Washington, D.C. for discussions with the Commodity Futures Trading Commission. The group met with personnel from the Division of Market Oversight and each of the three CFTC Commissioners on issues of concern surrounding the position limit rule proposed in Dec. 2013 – and a supplemental addition to the proposal published June 13, 2016. The clock now is ticking on a 30-day comment period that ends July 13. The CFTC’s supplemental proposal made ... Read More
CFTC’s supplement to position limits rule addresses NGFA concerns
By Todd Kemp, Senior Vice President of Marketing and Treasurer The Commodity Futures Trading Commission (CFTC) announced on May 26 that it will issue for public comment a supplement to its position limits proposal originally published in December 2013. The new supplementary proposal will significantly modify the CFTC’s re-definition of hedging strategies that will qualify as bona fide hedges, and it will modify the procedures for those seeking exemptions from speculative position limits for non-enumerated bona fide hedging. Since release of the original proposed rule in December 2013, ... Read More
CFTC maintains residual interest deadline
By Todd Kemp, Senior Vice President of Marketing and Treasurer The U.S. Commodity Futures Trading Commission (CFTC) concluded in a report issued May 13 that changing the residual interest deadline would not be practicable for clearing members and their customers. The NGFA, along with a coalition of associations representing agricultural producers, hedgers, and the clearing members who serve their risk-management needs, welcomed the report and its conclusion. The coalition includes NGFA, the Commodity Markets Council (CMC), the Futures Industry Association (FIA), the National Council of ... Read More
National Grain and Feed Association
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