Both contracts returned to regular price limits on Monday in accordance with CME's standard market procedures, which mandate that expanded daily price limits revert to their next-lowest level if they do not settle at the expanded limit during the prior trading session.
Barring additional extraordinary action by CME, daily price limits on CME's live cattle futures contracts require two consecutive days of limit moves in the same direction in either of the two "even" month contracts nearest to expiration (currently February or April 2004) before expanded limits go into effect for all expirations of live cattle contracts. For feeder cattle, the same policy applies to the two "odd" month contracts (currently January or March 2004). Expansion of price limits for live cattle do not trigger price limit expansions in feeder cattle contracts, or vice versa.
On Monday, both February and April live cattle and January and March feeder cattle settled at the "limit bid." If either February or April live cattle settle "limit bid" on Tuesday, Jan. 6, then the price limits for all live cattle contracts will expand to 3 cents on Wednesday. Similarly, if either January or March feeder cattle settle "limit bid" on Tuesday, then the price limits for all feeder cattle contracts will expand to 3 cents on Wednesday.
Chicago Mercantile Exchange Inc. (www.cme.com) is the largest futures exchange in the United States. As an international marketplace, CME brings together buyers and sellers on its trading floors and GLOBEX® electronic trading platform. CME offers futures and options on futures primarily in four product areas: interest rates, stock indexes, foreign exchange and commodities. Last year, the exchange managed an average of $1.4 billion per day in settlement payments and $37.6 billion in collateral deposits at Dec. 31, 2003, including $1.5 billion for non-CME products. CME is a wholly owned subsidiary of Chicago Mercantile Exchange Holdings Inc. (NYSE: CME), which is part of the Russell 1000® Index.
Chicago Mercantile Exchange, CME and GLOBEX are registered trademarks of Chicago Mercantile Exchange Inc. Further information about CME and its products is available on the CME Web site at www.cme.com.
