CFTC Agricultural Advisory Committee Meets in Washington

WASHINGTON, DC – On Thursday, the U.S. Commodity Futures Trading Commission’s (CFTC) Agricultural Advisory Committee (AAC) met here to discuss topics relevant to agricultural futures and derivatives market as well as the agricultural economy, including geopolitical and sustainability issues.

During the meeting, the committee heard remarks from the CFTC commissioners, including Chair Rostin Benham who sponsors the AAC.  Seth Meyer, chief economist at the U.S. Department of Agriculture provided a presentation on global events impacting U.S. futures markets.

The major discussion point for the meeting, however, was examining futures margining and the agricultural markets, a topic introduced by Jason Wheeler with White Commercial who serves as the USA Rice representative on the AAC.  Wheeler brought the subject forward given the extremely high margin costs faced by rice market participants during the summer of 2020 which carried through 2021.

Jeff Reardon, also with White Commercial, gave a presentation highlighting these statistics.  It was noted that margin costs should have decreased quicker than occurred and that a new system is being implemented that should offer better data to provide for more accurate margin costs in these types of situations.

“I want to thank Chair Benham and AAC Chair Scott Herndon for working with me to get this important topic on the agenda for our AAC meeting,” said Wheeler.  “The discussion was fruitful and I’m hopeful that should we experience similar scenarios in the future, the margin costs will more accurately reflect the real-time situation with the rough rice futures market.”