CFTC Complaint Upheld
The hedge-to-arrive saga took another turn on November 6, 1998, with release of the Agricultural Law Judge's opinion in the Grain Land Coop case. The hedge-to arrive controversy arose in 1995-96 when grain and soybean prices rose sharply and caught many producers with multi-year contracts hedged on a nearby futures contract month. The old crop-new crop spread between the 1995 and 1996 crops widened to unprecedented proportions in the early summer of 1996 and caused huge losses to elevators which were holding the futures obligation. Litigation since that time has endeavored to ascertain who would ultimately bear the losses from margin calls, roll charges and other costs associated with the contracts.