FORWARD CONTRACTING REPORT.

SEC. 334. FORWARD CONTRACTING REPORT. (a) Report.—Not later than 60 days after the date of the enactment of this Act, the Secretary of Agriculture shall prepare and submit, to the Committee on Agriculture of the House of Representatives and the Committee on Agriculture, Nutrition, and Forestry of the Senate, a report on the financial effect that forward contracting, 102 STAT. 953hedging, and associated margin requirements for wheat, feed grains, and soybeans during the recent drought-related period of price volatility have had on producers and on grain marketers, particularly local elevators and intermediaries. (b) Contents of Report.—In the report, the Secretary shall include a discussion of— (1) the extent to which currently planted or stored crops are subject to cash forward contracts or otherwise are hedged, and what portion of such forward contracts are in danger of being defaulted on as a result of drought-related crop losses; (2) the extent to which local grain elevators may experience severe financial stress due to defaults on cash forward contracts or due to margin requirements on futures market positions; (3) the extent to which producers have been able to renegotiate forward contracts in light of drought-related changes in economic conditions; (4) the extent to which hedging and forward contracting practices may produce unusual demands for credit among farm producers and marketers in light of drought-related conditions; and (5) such other areas of related concern as the Secretary may find appropriate. (c) Immediate Notification.—The Secretary shall immediately notify, in advance of the report, the Committee on Agriculture of the House of Representatives and the Committee on Agriculture, Nutrition, and Forestry of the Senate if the Secretary finds, in the course of the study required under this section, that serious economic or financial problems related to forward contracting, hedging, and margin requirements for grains are likely to arise. (d) Consultation.—The Secretary shall consult with the Chairman of the Commodity Futures Trading Commission on issues concerning futures markets that arise in the course of the study required under this section.