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Clarification-Ethanol Regular Delivery Capacity in Reg. 1690.01

Regulation 1690.01 states that a firm regular for delivery in CBOT Denatured Fuel Ethanol may register Shipping Certificates up to 15 times its CBOT registered daily rate of loading plus the amount of denatured ethanol in store. Additionally, Regulation 1690.01 states that a regular firm is required to load out ethanol against cancelled Shipping Certificates at the greater of either its registered daily rate of loading or 1/21st of the total amount of ethanol represented by outstanding Shipping Certificates.

For a regular production plant or storage facility located outside the Chicago District, the daily rate of loading is based on the regular firm’s registered daily rate of loading of railcars. For a production plant or storage facility located inside the Chicago District, the daily rate of loading is based on the regular firm’s registered daily rate of loading of trucks. In addition to 15 times the regular firm’s daily rate of loading, the firm may also register ethanol in store. However, a firm must be able to load out its entire regular capacity within 21 days. Thus, a regular firm will not qualify to issue more Shipping Certificates than the firm can physically load out in 21 days.

For example, suppose a regular firm located outside the Chicago District wants to register a CBOT daily rate of loading (railcars) of 87,000 gallons and has 1,000,000 gallons of storage. This firm may register up to 15 times its CBOT daily rate of loading or 1,305,000 gallons (87,000 * 15) plus its storage for a maximum total of 2,305,000 gallons. In order to qualify to issue 2,305,000 gallons worth of Shipping Certificates on CBOT Denatured Fuel Ethanol futures, the firm would need the physical capacity to load 109,762 (2,305,000 / 21) gallons of ethanol per day into railcars.

Suppose a storage only regular firm located inside the Chicago District wants to register a CBOT daily rate of loading (trucks) of 58,000 gallons and has 2,000,000 gallons of storage. This firm may register up to 15 times its daily rate of loading or 870,000 gallons (58,000 * 15) plus storage for a total of 2,870,000 gallons. However, if the 58,000 gallon CBOT daily rate of loading is also the firm’s maximum loading capacity, the firm only qualifies to register 1,218,000 (58,000 * 21) gallons of capacity.

Questions in this regard may be directed to David Lehman (312/347-3848) or Fred Seamon (312/347-3808) in the Business Development Department.

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