Chicago (Dow Jones) – The CME Group Inc. wants more time to convince food companies and farmers the daily trading limit for US corn futures should be increased.
The exchange is seeking to raise the daily limit for corn futures at the Chicago Board of Trade to 40 cents from 30 cents. It needs approval from the US Commodity Futures Trading Commission and asked regulators to extend a review period for the proposal by 45 days from Friday’s deadline. The CFTC said Monday it had approved the request.
CME has already run into opposition to its proposal from farmers, grain elevators and food companies. They have complained that a larger limit would increase volatility in the corn market and expose hedgers to bigger margin calls if prices surge.
The exchange last widened the limit for corn in March 2008 with an increase to 30 cents from 20 cents. Corn futures at the time were trading around $5.50 a bushel and ended up climbing to a record high of $7.65 a bushel in June of that year. That record fell this year, with the market reaching a new, all-time high of $7.99 ¾ a bushel earlier this month.