On May 26, 2016, the U.S. Commodity Futures Trading Commission (CFTC or Commission) voted unanimously to issue for public comment a supplement to its December 2013 position limits proposal.  Please find attached a summary of the supplemental proposal prepared by Delta Strategy Group.  The summary includes:

  • General background and important aspects and issues raised by the supplemental proposal;
  • A table of the cost benefit analysis and regulatory flexibility act sections; and
  • 68 questions posed by the Commission.

The Commission will solicit comments on the supplemental proposal for 30 days after its publication in the Federal Register.

DSG: CFTC Approves Supplement to Position Limits Proposal


Friday, the U.S. Commodity Futures Trading Commission (CFTC or Commission) voted unanimously to issue for public comment a supplement to its December 2013 position limits proposal that will:

  • Provide a new process for exchanges to recognize certain positions in commodity derivative contracts as non-enumerated bona fide hedges or enumerated anticipatory bona fide hedges;
  • Exempt from federal position limits certain spread positions;
  • Further amend certain relevant definitions, including the general definition of “bona fide hedging position” for physical commodities; and
  • Delay the requirement to establish and monitor position limits on swaps for designated contract markets (DCMs) and swap execution facilities (SEFs) that lack access to sufficient swap position information.

All other aspects of the 2013 position limits proposal will remain the same.  Chairman Massad said “this proposal is a critical piece of [the CFTC’s] effort to complete the position limits rule this year” and that the “[Commission] is working to review exchange estimates of deliverable supply so that spot month limits may be set used on current data.”  Commissioner Giancarlo said “the supplemental proposal leverages exchange expertise and resources to enable exemptions to be granted in an efficient and timely manner without sacrificing market integrity,” and that “the Commission would remain the ultimate arbiter of exemptions from position lists by retaining the authority to review and reverse any exchange-granted exemption.”


Delta Strategy Group (DSG) will be providing a summary of the supplement in the near future, but please see attached three documents for your recollection:

The Commission will solicit comments on the supplemental proposal for 30 days after publication in the Federal Register.


Please let us know if you have any questions.



China Rolls Out Cotton Reserve Auction Plan


FRIDAY, 2016-April 15:


Today, April 15th, the National Development and Reform Commission (NDRC) and the Ministry of Finance (MOF) jointly issued a notice to regularly auction off national cotton reserves.  We summarized the highlights for your review and further internal distribution as you see appropriate.   We will follow an analysis next week.


  • China will follow a principle which is to mainly auction off current reserves and moderately refill new reserves.  The National Cotton Exchange is responsible for the release based on an open bidding process.


  • China will regularly auction off the reserves from March to August each year.  The Chinese government set a cap for daily auction amount at 50,000 MT at dynamic market price.  The price will be updated on a weekly basis.


  • The sales of cotton reserves will halt from September to the following February when the new domestic cotton harvest is in the market.  During this period, the Chinese government plans to purchase high quality cotton to refill their reserves at market price.  The total refill amount will not exceed 30% of the total amount for the reserves sale.


  • For 2015/16 auction, China will release cotton reserves from May 3rd to August 31st, The daily auction amount will not exceed 30,000 MT, and total amount will not exceed 2MMT.  The auction will give priority to imported cotton.


Provided by Yuan & Associates


Cotlook Price Quotes

Attached is a memo from Gary Adams – regarding Cotlook Limited’s response to the U.S. cotton industry’s request for continuation of the collection and publishing of price quotes for Middling 1-3/32” cotton.  You will note that Gary’s memo also encourages U.S. merchandising firms to provide quotes for Middling cotton of both 1-1/8” and 1-3/32” staple lengths.

Gary Adams – Memo

A Index Attachment

2015-2016 Emerging Leaders Program Nominations

The National Cotton Council is accepting nominations for the 2015-16 Emerging Leaders Program through April 7, 2015.  The program is an educational project of The Cotton Foundation and is sponsored through a special grant from Monsanto.

 A nomination form, which includes a summary of the program’s objectives and eligibility criteria, is attached for your review.  Please contact John Gibson at jgibson@cotton.org or (901) 274-9030 with any questions.

 Emerging Leaders Nomination Form