Notice to Members
Notice No. 245 06/24/2004
COMEX Spot Month Copper Position Limit Reduction
On June 15, 2004, the Exchange issued Notice to Members No. 230 regarding the copper futures spot month position limit. The Notice set the copper spot month limit at 3,000 contracts (this level was set on December 2003 when copper went into backwardation), and allowed for the limit to be further reduced below the current 3,000 contracts, at the discretion of the Control Committee, if at any time registered warehouse stocks fall below 20,000 contracts equivalents. COMEX warehouse stocks for copper, as of close of business 6/22/04, total 105,340 short tons or 8,427 contract equivalents. Pursuant to the CFTC Regulation 150.5(1), Exchange-set speculative position limits, "for physical delivery contracts, the spot month limit level must be no greater than one-quarter of the estimated spot month deliverable supply to minimize the potential for manipulation or distortion of the contract's or underlying commodity's price." Therefore, the Control Committee today decided to reduce the copper futures spot month limit to 1,500 contracts effective for the July 2004 contract. By rule, the spot limit is effective as of the close of business on the second to last business day of the calendar month preceding the delivery month. Hence, the effective date for the 1,500 contract spot month limit is close of business June 29, 2004.
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