Font Size: AAA // Print // Bookmark

Comment for Proposed Rule 80 FR 200

  • From: Nathan Mangold
    Organization(s):
    Advance Trading, Inc. I help farmers and commercials companies with hedging their grain risk.

    Comment No: 60254
    Date: 1/15/2015

    Comment Text:

    I'm in support of the thoughts from the NGFA:

    • Thousands of U.S. agribusiness firms rely on many types of hedging transactions to manage risk appropriately in their daily business operations.
    • The CFTC-proposed rule unnecessarily and dramatically narrows the range of hedging transactions that would be considered bona fide hedges.
    • Many hedging transactions employed for decades by the industry, and historically considered bona fide by the commission, would be outside the new proposed definition.

    • In particular, anticipatory hedging is very important to our industry and must be maintained as bona fide hedging. Examples of hedging strategies that could be at risk include:
    o Pre-hedging purchases of producer grain outside trading hours of a futures exchange.
    o Pre-setting futures carrying charges to manage spread risk.

    • Restricting the use of long-accepted strategies will increase costs of hedging for business risk management and ultimately will lead to lower bids to producers and higher consumer prices.

Edit
No records to display.