Comment Text:
I am the Grain Team Leader for MaxYield Cooperative. We are a 2700 member farmer owned grain & farm supply cooperative with 17 grain locations across northern Iowa. We want to express our concern on how the CFTC plans to change bona fide hedging rules. MaxYield uses CME futures to hedge our flat price risk as we purchase corn from our member/clients which is over 100 million bushels of corn and 7 million bushels of beans each year. We also use CME futures to lock in market carrying charges. We are concerned about these changes in particular:
Locking in futures spreads;
hedging basis contracts;
hedging delayed-price commitments;
cross-hedging;
anticipatory hedging of commercial transactions all of which we use to manage price risk and provide market tools to our farmer member/clients. The Chicago Board of Trade was established to provide a way for farmers, commercial elevators, grain end-users to manage risk. This system has worked for over 130 years. It appears because of few bad traders, we now have rules that will restrict how we can purchase and hedge farmer grain. This will result in more costs, less market involvement by farmers, and ultimately the farmer pays the cost. Solution? leave the rules the same for the farm and commercial grain industry and prosecute/eliminate those that have not followed the rule. These firms and individuals need to banned from the industry and in jail! Please consider this solution.
