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CME Declares Changes to Live Cattle Contracts

NCBA, cattle producers prepare to comment on new rules

Washington, D.C. (January 15, 2003) — Cattle producers and National Cattlemen's Beef Association (NCBA) staff are reviewing amendments to the Live Cattle Futures contract announced by the Chicago Mercantile Exchange (CME) this week. At its regular meeting on January 9, the CME Board of Directors approved the amendments, some of which include:

1. Increase the upper limits on deliverable live weights in live graded deliveries by 25 pounds, to an average weight of 1,350 pounds and an individual weight of 1,400 pounds;

2. Introduce a new discount category for 950-1000 pound carcasses in carcass graded deliveries;

3. Increase spot month position limits to 450 contracts between first notice day and the day before the last five business days of the contract month;

4. Restore Guymon, Oklahoma and add Texhoma, Oklahoma as live graded delivery points; and

5. Implement a uniform live grading fee at all delivery points.

Changes announced this week apply to the December 2003, February 2004 and all subsequent contracts, and were listed Monday for trading under the new rules. Contracts up to and including October 2003 will trade under previous rules.

In addition, the CME has sent the changes to the Commodity Futures Trading Commission for review under an anticipated 45 day review period, during which time cattle producers and interested parties will have the opportunity to submit formal comments. The December 2003, February 2004 and all new contracts will trade with the new changes in place concurrent with the 45 day review period.

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