Comment Text:
10-002
COMMENT
CL-02709
David Stawick, Secretary
U,S. Commodity Futures Trading Commission
Three Lafayett~ Centre
1155 21
~'
Street !qW
Washington, D,C. 2058
P.O. BOX 3~8
LAMBERTON, MINNESOTA 56152
OFFICE 762-7352
C~mmunity Since 1~D5
Subject: Comments of Proposed Speculative Position Limits for Energy (File#10-002)
Dear Mr. Stawiek:
I am writing today to endorse comments submitted by the Petroleum Marketer~ Association of America
and the New England Fuel Institute submitted on April 9, 2010 on the proposed rule to implement
speculative position limits for future and options conWact.~ for natural gas, etude oil, heating oil, and
gasoline. I am also wfting to odd my own thoughts on this matter to the public record,
Futures markets were designed as a tool for bona fide commercial businesses and end-tracts to manage
risk and "discover" prices for energy based on supply and demand economies, Businesses and
consumera rely on these market~ and are harmed when they become excessively volatile or subject to
extreme prices shocks, as we saw with the 2007-2008 energy bubble, In the past ten years, suck events
have become common and federal regulators fa~led to take agsettlve action to address the cau~e~ and to
restore Confidence in the energy Ihtttres markets.
By strengthening and p~sing this proposed nllemakin8, fl~e Commission has an opportunity to take ,an
import,'mt step in this regard, It will be addressing the main cause of recent market i~stability~
~_~e~z.~v¢ .~p~zu.ga.~on.
Financial inve~ors, including banks, hedge funds and index funds, speculate in
the energy commodities markets for profit, rather than commodity-related businesses and u~ers, who do
ao to protect themselves from volatility and risk. Speculato~
lake
on the risk that hedgers seek to shed,
however speculation should not dominate the markets. Moreover, one speculator or class of speculator
should not be allowed to take a large, eorttrolltng position in uny a single commodity,
The Commission has a s{amtory obligation, if not a compelling moral obligation, to establish hard limits
on the size of positions that speculators can tank in these markets, and ~o bar them .from any exemptions.
The rule that has been proposed is not perfect, and again, I strongly urge the teclmical improvement~
suggest by the eommen~ I have written to endorse.
In considering the rule, Commissioners mugt look past opposition by file financial community and
remember the affect that excessive speculation has on businesses like mine, my consumers and the
broader economy. It should establish res~ctive speculative po~ition limits, and implement them
expeditiously, before we se~ a repeat of the 2007-2008 energy bubble and another major shock to a
country still recovering fi-om recession.
Meadowland Farmers Coop is a cooperative-serving farmers in Southwestern Minnesota. We sell
pc-troleum products to/'armem and people that work in town. Energy is something that affects everything
we do, whether it is farming, travel, manufacturing, and heating homes. I feel very strong, that you should
control the amount of~peetdation in commodities, namely petroleum, and gmln, so that speculation doesn't
control the price move totally, like it has in the p~tst.
Thank yo~ for your consideratioth
