Market Matters Blog           10/29 11:10

   CME Announces Resetting of Price Limits for Grain, Oilseed Futures

   CME announced the resetting of price limits for grain and oilseed futures as 
of Nov. 1, 2024; its variable price-limit mechanism enacted in March 2014, 
resets price limits every six months in each of the CBOT grain and oilseed 
contracts.

Mary Kennedy
DTN Basis Analyst

   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/notices/ser/2024/10/ser-9446.html

   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

   Follow her on social media platform X @MaryCKenn




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