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Loading/Shipment of Ethanol Against Denatured Fuel Ethanol ShippingCerts.

Questions have been raised whether a taker of delivery who cancels CBOT® Denatured Fuel Ethanol Shipping Certificates for load-out and fails private freight negotiations can expect to receive the ethanol in-tank at Chicago within 15 calendar days even if other CBOT Denatured Fuel Ethanol shipping certificates have been previously cancelled and are currently being loaded out from the same regular shipping plant.

Regular Shippers are required in Regulation 1690.01 to load-out against cancelled Shipping Certificates at the greater of their daily rate of loading or 1/21st of the ethanol represented by Shipping Certificates issued but not yet loaded. Multiple takers who cancel Shipping Certificates on or near the same date are placed in a line-up by the Shipper based on when private negotiations for freight charges are completed or negotiations for freight charges are failed by either party. Thus, even if private freight negotiations fail, a taker must wait for any other takers ahead of him in the lineup to be loaded before the 15 calendar day count down begins. For example, suppose a taker cancels his Shipping Certificates and immediately fails private freight negotiations. Further suppose that another taker with 10 shipping certificates is first in the lineup and the Regular Shipper’s daily rate of loading is two shipping certificates per day. The first taker in the lineup must be loaded in five calendar days. Load out for the second taker in the lineup would begin on the sixth calendar day, and the Regular Shipper would be responsible for delivering this ethanol to the taker’s Chicago terminal within 15 calendar days of commencement of load out. The Regular Shipper may also deliver to the buyer’s Chicago Terminal via book transfer or other means, and does not necessarily have to load out from his production to meet his obligation. In addition, the buyer and seller may mutually agree to alternative load-out procedures.

If you have any questions, please contact John Hill (312-435-3592) in the Registrar’s Office or Fred Seamon (312/347-3808) in Business Development.

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