CME Group, the world's largest and most diverse derivatives exchange, today announced that, pending CFTC approval, daily price limits will increase March 28, 2008, for corn, mini-sized corn, soybeans, mini-sized soybeans and soybean oil futures and options on futures contracts.
Corn price limits will be increased to $0.30 from $0.20 per bushel, soybeans to $0.70 from $0.50 per bushel and soybean oil to $0.025 from $0.020 per pound.
In addition, daily price limits for wheat, mini-sized wheat, corn, mini-sized corn, soybeans, mini-sized soybeans, soybean meal, soybean oil, oats and rough rice futures will increase by approximately 50 percent the following trading session when the price of two or more futures contract months within the first five to eight listed non-spot contract months (depending on the commodity's crop year), or the final contract month of a crop year, closes at limit bid or limit offer. Price limits can expand two consecutive times.
Daily price limits for these commodities will step back to their prior levels when no futures contract month for that commodity closes at limit bid or limit offer that day. The Kansas City Board of Trade is adopting the same price limits policy for its wheat contracts.
Price limits will continue to be removed on the current contract month beginning on the second business day preceding the first day of the delivery month.
The premiums on options are subject to the same daily price limits as the underlying futures.
Price limit increases are necessary to maintain an orderly marketplace. Price levels and volatility for these commodities have increased significantly since the current daily price limits were established in 2000. Increasing price limits will allow market participants to continue to utilize the contracts for price discovery and risk mitigation without being unduly constrained by limit price moves.
For more information, please go to http://www.cmegroup.com/rulebook/rulechanges.
CME Group (http://www.cmegroup.com) is the world's largest and most diverse exchange. Formed by the 2007 merger of the Chicago Mercantile Exchange (CME) and the Chicago Board of Trade (CBOT), CME Group serves the risk management needs of customers around the globe. As an international marketplace, CME Group brings buyers and sellers together on the CME Globex electronic trading platform and on its trading floors. CME Group offers the widest range of benchmark products available across all major asset classes, including futures and options based on interest rates, equity indexes, foreign exchange, agricultural commodities, and alternative investment products such as weather and real estate. CME Group is traded on the New York Stock Exchange and NASDAQ under the symbol "CME."
