Comment Text:
TMA a cooperative grain marketing firm owned by Producers in Central Kansas has a long history of using the futures market to hedge off price risk on commodities. Everything which we do both as a commercial and as a farm marketing manager revolve around risk management hedges.
We have a concern that CFTC is intending to change the definition of a bona fide hedge. If changed to the point our normal product usage disqualifies our status as a hedge. This would expose businesses like ours plus farmer customers/owners whom have been using our services for pricing and marketing crops to have increased risk, lower prices and fewer risk management tools.
It is TMA's understanding today that the following items would be excluded as normal hedge transactions:
-locking in futures spreads
-hedging basis contracts
-hedging delayed-price contracts
-pre-hedging of purchases
All of these processes have been and should be hedge transactions in the truest since.
Thanks for listening.
