By ANN HINCH
Assistant Editor

CHICAGO, Ill. — Some commodities markets of the CME/Chicago Board of Trade (CBOT) will undergo significant changes this Friday.
As of March 28, daily price limits for corn, mini-sized corn, soybeans, mini-sized soybeans and soil oil futures and options on futures contracts will increase, much as wheat and mini-sized wheat did in mid-February at CBOT, the Minneapolis Grain Exchange (MGEX) and the Kansas City Board of Trade (KCBT). The U.S. Commodity Futures Trading Commission approved the limit increases on March 19.
Corn will increase from 20-30 cents per bushel, soybeans from 50-70 cents and soy oil from 2-2.5 cents per pound. This is the first increase in trading limits for these commodities since 2000, according to CBOT spokeswoman Mary Haffenberg.
“The price levels and volatility for grain and oil have increased in recent years,” she explained of the change.
A trading limit determines how far a commodity price can rise or fall in one day. Back in February, all three exchanges – which trade separately from one another and are separately managed – agreed to increase their daily limit for wheat futures and options from 30-60 cents. CBOT is the only one thus far changing corn, soybeans and soy oil limits. James Facente, director of Marketing, Clearing and IT at MGEX, said Minneapolis trades lower volume corn and soy than CBOT.
“It might” change at some point in the future, he said of their limits at MGEX. “If the market needs it to, we will.”
If at least two contract months’ futures 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 reach the limit in one day at CBOT, the exchange will raise the limit by another 50 percent the following day.
This can happen only twice before the limit is capped. For example, if corn futures close at $5 one day and at least two monthly contracts move 30 cents in either direction the following day – to $4.70 or $5.30 – then the third day, the limit will be 45 cents. If that limit is met by two or more contracts, on the fourth day the limit will be 67.5 cents – and then it will go no higher.
The first day no contracts close at the new limit, however, on the following day the limit will come back down to 30 cents and the cycle will begin again.
When the wheat limit change was made in February, expanding daily limits was continuous so long as the daily criteria were met with the contract months’ futures. Further, the limit didn’t drop back to its lowest allowance until a period of three consecutive days was reached where at least two monthly futures did not close at those days’ limits.
Haffenberg said that is changing, however, for CBOT and KCBT wheat contracts, which as of March 28 will follow the new expansion and retraction pattern of corn, soybeans and soy oil. Oats and rough rice futures will also adopt this pattern. Facente said MGEX is not adopting this change to its wheat futures at this time.
“Customer feedback was that they wanted (wheat) uniform with everything else,” Haffenberg added.