The CME Group's new variable price limits on CBOT grain and oilseed futures become effective on Thursday and will remain in place for six months.
The variable limits, determined by 45 days of settlement prices prior to and on April 16, were announced in March and will replace the current fixed limits on futures and options. The change will allow higher limits when prices are high and lower limits when prices are low, the CME said.
Also on Thursday, price limits will be removed for all grain and oilseed options.
Effective on Thursday:
• Corn's new limit will be 35 cents per bushel down from the current 40 cents, but is expandable to 55 cents
• Soybeans will go to $1 per bushel from the current 70 cents, with expansion to $1.50.
• CBOT soft red winter wheat drops to 45 cents per bushel from 60 cents, but is expandable to 70 cents.
• Kansas City hard red winter wheat drops to 50 cents from 60 cents, but is expandable to 75 cents.
• Soybean oil increases to 3 cents per lb from 2.5 cents and is expandable to 4.5 cents.
• Soybean meal increases to $30 per ton from $20 and is expandable to $45.
• Oats increase to 25 cents a bushel from 20 cents, with expansion to 40 cents.
• Rough rice increases to $1.10 per cwt (100lbs) from 50 cents and is expandable to $1.65.
The next reset date for trading limits will be the first trading day in November.
"These changes won't have a huge impact on current markets," said Bryce Knorr, Farm Futures senior grain market analyst. "Corn and wheat margins might drop a little, while soybeans are increased more."
The changes will be additional factors that farmers will need to watch to make sure orders and stops are entered correctly, especially when market moving events like USDA reports can trigger volatility, said Knorr.