Effective Oct. 31, for trade date Nov. 1, 2023, the Chicago Board of Trade (CBOT) and the Chicago Mercantile Exchange Inc. (CME) will reset price limits for grain, oilseed and lumber futures, according to a recent news release.
"This is the second of the two price limit resets in 2023 that is stipulated by the variable price limits mechanism pursuant to each product's respective Rulebook Chapter," stated the news release.
Corn futures price limit will go from 45 cents per bushel to 35 cents, with extended price limit at 55 cents. Oats futures price limit will go from 25 cents per bushel to 30 cents, with extended price limit at 45 cents.
Soybean futures price limit will go from $1.05 per bushel to 95 cents, with extended price limit at $1.45. Soybean oil futures price limit will stay at 40 cents per pound, with extended price limit at 60 cents. Soybean meal futures price limit will go from $30 per ton to $25, with extended price limit at $40.
Chicago wheat futures and Kansas City wheat futures price limit will go from 60 cents per bushel to 50 cents, with extended price limit at 75 cents. All other price limits affected can be found in the link below.
In 2014, CME Group put a new percentage-based daily price limit procedure in CBOT grain and oilseeds products, including corn, soybeans, CBOT wheat, Kansas City wheat, soybean meal, soybean oil, oats and rough rice.
CME noted, "The new methodology is a more flexible, transparent and market based price-limit setting mechanism. It would allow price limits to expand under high prices, but also allow price limits to retract when prices fall."
Basically, the new variable price limit mechanism will allow higher limits when prices are high and lower limits when prices are low. "The new variable price-limit mechanism resets price limits in each of the CBOT grain and oilseed futures contracts every six months, with the first reset date being on the first trading day in May," according to the CME.
Here is the entire table of all new price limits and links mentioned by the CME in the most recent announcement: https://www.cmegroup.com/…
Here is the March 12, 2014, announcement to better understand the process: https://www2.dtn.com/…
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