Market Matters Blog

Effective Oct. 31, 2024, for trade date Nov. 1, 2024, the Chicago Board of Trade (CBOT) and the Chicago Mercantile Exchange Inc. (CME) will reset price limits for grain and oilseed futures, according to a recent news release.

"This is the second of the two price limit resets in 2024 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 stay at $0.30 per bushel, with an extended price limit at $0.45 per bushel. Oats futures price limit will stay at $0.25 per bushel, with an extended price limit at $0.40 per bushel.

Soybean futures price limit will go from $0.85 per bushel to $0.70, with an extended price limit at $1.05 per bushel. Soybean oil futures price limit will go from $0.035 per pound to $0.030, with an extended price limit at $0.045 per pound. Soybean meal futures price limit will go from $25 per ton to $20, with an extended price limit at $30 per ton.

Chicago wheat futures and Kansas City wheat futures price limit will stay at $0.40 per bushel, with an extended price limit at $0.60 per bushel. 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/…

CME Approved to Establish an FCM

In a separate news release Tuesday, CME Group announced it had received approval from the National Futures Association to establish a futures commission merchant (FCM).

"We are pleased that the NFA has approved our FCM application," said Terry Duffy, chairman and CEO of CME Group. "We remain committed to the FCM model and believe in the time-tested risk management benefits it continues to provide. At the same time, as our industry continues to evolve, our FCM will ensure CME Group is in a strong position to quickly adapt to our clients' changing business needs."

Mary Kennedy can be reached at Mary.Kennedy@dtn.com

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