Increased Corn Limits?

[MissouriClone]

Tuesday, July 19, 2011
2:00pm CT
Online or In-Person

In-Person:
CME Group Visitor Center Theater
141 W. Jackson Blvd, 5th Floor
Chicago, IL 60604

Online:
CLICK HERE TO ATTEND ONLINE - this link will become active at 1:30 p.m. CT.
If you are having issues connecting to the presentation, please update your flash player
The purpose of this meeting is to discuss the Exchange's recent proposal to increase daily price limits in CBOT Corn futures. All corn industry participants are invited to attend.

On April 26, 2011, the CBOT submitted a proposal for approval to the Commodity Futures Trading Commission (CFTC) to increase the daily price limit in CBOT Corn futures from 30 cents per bushel expandable to 45 cents then to 70 cents per bushel, to 50 cents per bushel expandable to 75 cents then to $1.10 per bushel. Following additional outreach to the industry, on May 10, 2011, the CBOT amended its proposal to increase daily price limits to 40 cents per bushel expandable one time to 60 cents per bushel. On June 16, 2011, the CBOT extended the CFTC review period, scheduled to end on June 24, 2011, for an additional 45 days until August 8, 2011, in order to hold an industry meeting to explain the rationale for the proposal and its relationship to volatility and the procedure used by CME Clearing to set margin levels for corn and other grains.

[Tas]

NO on days when we have had expanded limits as of late, we haven't used the full .45 so I do not see the need.Rising the limits would just give the big boys more room to run the market into stops..... I would go along with it IF WE HAD A DAILY CFTC REPORT in is computer age its just a few clicks away....................

[ses]

If corn is at $6 a $1.10 daily move would be 18%. That looks a little excessive to me.

[BinswOH]

I think they should establish the limit as a percentage of price. Who knows where the average corn price will be in 24 months. Could it be $11 or $2. By establishing a percentage formula we wouldn't be revisiting this limit issue every 8 years or so.

[Tas]

Bins I think they use a percentage of price more for margin requirements.

[davidm479]

a man could get his yang yang caugh in the barn dood their----------------------dave

[RowCropRenegade]

Another bad idea by CME. Increased limits benefit them not farmers. They say it doesn't affect volatility? I wave the BS flag on that one! Faust has it right.... The Big Casino with Comic Book reports by the magic 8 ball USDA.

300 seconds between posts is a tad long. 300 seconds is 5 minutes! Pretty easy to get caught up in a thread and post a short comment in 2 minutes. Maybe it's to get us to write longer replies. This entire second paragraph has been typed to just kill time.

[Tas]

With those limits IF we had 3 days locked limit up or down that would be 2.35 in those 3 days................. I could see those extra fee's on HTA's going up.

[dennis1]

Another bad idea by CME. Increased limits benefit them not farmers. They say it doesn't affect volatility? I wave the BS flag on that one! Faust has it right.... The Big Casino with Comic Book reports by the magic 8 ball USDA.

300 seconds between posts is a tad long. 300 seconds is 5 minutes! Pretty easy to get caught up in a thread and post a short comment in 2 minutes. Maybe it's to get us to write longer replies. This entire second paragraph has been typed to just kill time.

AND

Tas
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With those limits IF we had 3 days locked limit up or down that would be 2.35 in those 3 days................. I could see those extra fee's on HTA's going up.



and Bin...
% of price is nothing more than those with the most getting the greatest margins...just like wages.



My input for the poll:
F--- NO...just another scheme to raise fees and commissions without showing profit on the investors side. Looks like the bankers are in the CBT.
MHO

[Grainbelt2]

Those of you who are opposed to increased limits.... Are you opposed because you believe the moves aren't real and justified moves? Why shouldn't markets be able to move instaneously to the point where they clear? Why wouldn't you as producers want to be able to transact business in the cash market at any time you choose? If the markets are constrained by limits, it may at certain moments in time, be the case that you will only be allowed to transact grain in a basis only enviroment or have "protection" taken by elevators and end users that are rarely in your best interest.

Limits are in place for protection of the exchange and for no other reason. If I were a producer I would want limits removed completely. They are not efficiency promoters and someone pays for those inefficiencies.