Gary Gensler, chairman of the US Commodity Futures Trading Commission, addressed a meeting of the Agricultural Advisory Committee on August 5.
He said he would be asking questions about wheat price
convergence and ICE Futures US’s Cotton No 2
Futures contract, because "it is important that exchanges
periodically review contract specifications and make sure they
are keeping up with changing markets".
"For example, it is important that exchanges review delivery
points so that they best reflect the changing characteristics
of the physical marketplace," he said.
Gensler also wants advice on how rules should best be written
for agricultural swaps.
He wants to investigate the lack of convergence between
physical and futures prices in the Chicago Board of Trade wheat
market. The exchange recently changed storage rates on its
wheat contract to address this.
Gensler said: "This lack of convergence has significant
implications for hedgers and goes to the core of our markets.
Without convergence, hedgers lose confidence in the