Comment Text:
We are a medium sized Missouri farmers’ cooperative. We run 10 grain elevators and we deal with various forms of risk every day. Because of this risk, we utilize several different forms and strategies of hedging to manage our risks. We understand that the CFTC is considering some new definitions that would exclude what was previously accepted as bona fide hedges.
We are especially concerned about the possible exclusion of pre-hedging. To exclude pre-hedging will have a dramatic impact on our operations such that it could easily prevent us from having cash bids to our producers whenever futures markets are not open and trading. The US grain industry has long served the US farmers with liquid cash markets at most anytime that a farmer wanted to transact business by pricing his grain.
To make the various dramatic changes that the CFTC is considering will have a huge negative effect on the entire grain industry and that negativity will flow directly to the entire base of US farmers and consumers. We strongly urge the CFTC to refrain from making these unnecessary, far reaching changes to a system that thus far has served the entire Agricultural community quite well.
