Effective Monday, June 25, 2001, the rules governing expandable daily price limits on certain Agricultural contracts will be revised. Specifics of the rule changes are included in the attached Special Executive Report, S-3689. Products affected by these rule changes include Random Length Lumber, Oriented Strand Board, Dry Whey, Cheddar Cheese Block and Nonfat Dry Milk.

If you have any questions concerning these changes, please contact Lisa Amato at (312) 338-2654. Thank you.

S-3689 June 22, 2001

REVISED RULES FOR EXPANDABLE DAILY PRICE LIMITS

FOR RANDOM LENGTH LUMBER, ORIENTED STRAND BOARD, DRY WHEY, CHEDDAR CHEESE BLOCK AND NONFAT DRY MILK

Please be advised that the rules governing expandable daily price limits for futures on Random Length Lumber, Oriented Strand Board, Dry Whey, Cheddar Cheese Block and Nonfat Dry Milk have been revised, effective at the start of trading on Monday, June 25, 2001.

Expandable limits are triggered by price settlements at the limit bid or limit offer. The rules governing expandable limits were intended to allow expandable limits to be retained as long as prices continue to settle at limit bid or limit offer levels, regardless of the direction of the subsequent price movement. Recent questions made it necessary to clarify these rules to specify that limit movements subsequent to the triggering of expanded limits need not be in the same direction as the original move that triggered the expanded limits.

The amended rules are presented below, with additions underlined and deletions bracketed and overstruck.

RANDOM LENGTH LUMBER FUTURES

1702. FUTURES CALL

D. Daily Price Limits

There shall be no price limit in the spot month.

There shall be a daily price limit of $10.00 per thousand board feet above or below the previous day's settlement price.

If the contract nearest to expiration that is subject to a daily limit settles on the limit bid for two successive days or on the limit offer for two successive days, then the price limit shall be raised to $15.00 per thousand board feet for all contracts subject to a daily limit.

If the contract nearest to expiration that is subject to a daily price limit of $15.00 does not settle at [the] a limit bid or limit offer, without regard to market direction, the price limits shall revert to $10.00 per thousand board feet on the next business day.

ORIENTED STRAND BOARD FUTURES

7302. FUTURES CALL

D. Daily Price Limits

There shall be no price limit in the spot month.

There shall be a daily price limit of $10.00 per thousand square feet above or below the previous day's settlement price.

If the contract nearest to expiration that is subject to a daily limit settles on the limit bid for two successive days or on the limit offer for two successive days, then the price limit shall be raised to $15.00 per thousand square feet for all contracts subject to a daily limit.

If the contract nearest to expiration that is subject to a daily price limit of $15.00 does not settle at [the] a limit bid or limit offer, without regard to market direction, the price limits shall revert to $10.00 per thousand square feet on the next business day.

CHEDDAR CHEESE BLOCK FUTURES

8102. FUTURES CALL

D. Daily Price Limits

There shall be no trading at a price more than $0.025 per pound above or below the previous day's settlement price, except that there shall be no daily price limits in the spot month during the last 5 days of trading.

If any contract that is subject to a daily price limit settles on the limit bid or the limit offer, then the daily price limit shall be raised to $0.05 per pound for all contracts subject to a daily limit. If none of the contracts that are subject to a daily price limit of $0.05 settles at [the] a limit bid or limit offer, without regard to market direction, the price limits for all contracts subject to a daily limit shall revert to $0.025 per pound on the next business day.

NONFAT DRY MILK FUTURES

8902. FUTURES CALL

D. Daily Price Limits

There shall be no trading at a price more than $0.025 per pound above or below the previous day's settlement price, except that there shall be no daily price limits in the spot month during the last 5 trading days in the spot month.

If any contract that is subject to a daily price limit settles on the limit bid or the limit offer, then the daily price limit shall be raised to $0.05 per pound for all contracts subject to a daily limit. If none of the contracts that are subject to a daily price limit of $0.05 settles at [the] a limit bid or limit offer, without regard to market direction, the price limits for all contracts subject to a daily limit shall revert to $0.025 per pound on the next business day.

DRY WHEY FUTURES

9102. FUTURES CALL

D. Daily Price Limits

There shall be no trading at a price more than $0.020 per pound above or below the previous day's settlement price, except that there shall be no daily price limits in the spot month during the last 5 trading days in the spot month.

If any contract that is subject to a daily price limit settles on the limit bid or the limit offer, then the daily price limit shall be raised to $0.040 per pound for all contracts subject to a daily limit. If none of the contracts that are subject to a daily price limit of $0.040 settles at [the] a limit bid or limit offer, without regard to market direction, the price limits for all contracts subject to a daily limit shall revert to $0.020 per pound on the next business day.

If you have any questions regarding this matter, please contact Mr. Jack Cook, Economist, Commodity Product Development, at (312) 930-3295, or Mr. Paul Peterson, Director, Commodity Product Development, at (312) 930-4587.