• Amendments to CME Rule 704 (Approved Stockyards and Slaughter Plants for Live Cattle) and New Appendix to CME Chapter 7 (Delivery Facilities and Procedures

      • From
      • Registrar's Office
      • #
      • MKR01-27-14
      • Notice Date
      • 27 January 2014
      • Effective Date
      • 27 January 2014
    • DATE:            January 27, 2014
      MKR#:           01-27-14
      SUBJECT:   Amendments to CME Rule 704 (Approved Stockyards and Slaughter Plants for Live Cattle) and New Appendix to CME Chapter 7 (Delivery Facilities and Procedures
       
       
      Effective Monday, February 10, 2014, and pending all relevant CFTC regulatory review periods, Chicago Mercantile Exchange Inc. (CME or Exchange) will implement amendments to Rule 704 (Approved Stockyards and Slaughter Plants for Live Cattle). 
       
      The amendments allow the Exchange, in its sole discretion, to determine and publish maximum daily delivery limits at stockyards that have been approved by the Exchange for the delivery of live cattle resulting from delivery obligations resulting from transactions in CME Live Cattle futures contracts.  The amendments note that the limits are subject to change based on changes to stockyard infrastructures and the availability of USDA grading personnel.  The amendments also require that approved stockyards seeking to amend their current delivery limit must file a written request with the Exchange.  Lastly, as a result of the revisions to Rule 704, CME will adopt an appendix to Chapter 7 of the CME Rulebook setting forth the current live cattle maximum daily grading capacities at approved stockyards.  The amendments to Rule 704 and the new appendix will become effective on Monday, February 10, 2014, and will apply to deliveries against the February 2014 Live Cattle futures contract and forward.
       
      The amendments and the new appendix are set forth below, with additions underscored and deletions overstruck.
       
      If you have any questions concerning this matter, please contact Nadine Brown in the Market Regulation Department at 212.299.2223.
       
      CME Chapter 7 (Delivery Facilities and Procedures)
      704.                        APPROVED STOCKYARDS AND SLAUGHTER PLANTS FOR LIVE CATTLE
      Deliveries on Exchange contracts of live beef cattle can be made only at public livestock yards and slaughter plants designated and approved for delivery by the Exchange.
      A public livestock yard shall not be eligible for deliveries as an approved stockyard unless it is a stockyard within the definition of the Packers and Stockyards Act, 1921 as amended, and has received notice to that effect from the Secretary of Agriculture. Approved stockyards shall be required to keep such records, make such reports and be subject to inspection and regulation by the Secretary of Agriculture, as provided in said Packers and Stockyards Act.  The Exchange, in its sole discretion, may determine and publish maximum daily live delivery limits for futures contracts at approved stockyards (see Appendix to this Chapter for the current limits).  These limits are subject to change based on changes in stockyard infrastructure (e.g., scales, holding pens, etc.) and availability of USDA grading personnel. Approved stockyards that desire to increase or decrease their limit shall file with the Exchange a written request. Increases shall be effective thirty days after approval and posting by the Exchange and decreases shall be effective once a notice has been posted by the Exchange.
      An approved slaughter plant shall, at a minimum, be federally inspected, slaughter primarily fed cattle in the normal course of business, have a fed cattle slaughter capacity of at least 500 head per day, have proper facilities for weighing and grading, and be located within a 200 mile radius of one or more approved stockyards.
       
      Appendix to CME Chapter 7
       
      Live Cattle Maximum Daily Grading Capacities at Approved Stockyards
       
      The following live cattle grading capacity limits at approved stockyards are in effect beginning with the February 2014 live cattle delivery cycle:
       
      Approved Stockyard
      Maximum Daily Grading Capacity (contracts)
      Amarillo TX
      60
      Clovis NM
      15
      Columbus NE
      15
      Dodge City KS
      40
      Norfolk NE
      30
      North Platte NE
      20
      Ogallala NE
      25
      Pratt KS
      10
      Syracuse KS
      25
      Texhoma OK
      30
      Tulia TX
      30
      Worthing SD
      60
      Wray CO
      10
       

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