CME Group announces plans to increase speculative position limits

By Todd Kemp, Senior Vice President, Treasurer

The CME Group on Jan. 27 notified the Commodity Futures Trading Commission (CFTC) that it intends to increase both spot-month and all-months-combined speculative position limits effective March 15. 

The change is intended to coincide with the effective date of CFTC’s final rule that revises speculative position limits for corn, wheat, soybeans and other agricultural commodities, and imposes such limits on some energy, metals and financial futures contracts for the first time. 

For corn, wheat and soybean contracts, and subject to CFTC review, CME proposes to increase spot-month limits from the current 600-contract limit to 1,200 contracts, as contained in the CFTC rule. Other agricultural contracts also would see spot-month increases. 

In something of a surprise move, CME proposed to increase all-months-combined limits – derived by formula based upon open interest levels – for corn, wheat, soybeans and other agricultural commodities – to the new maximum federal limits finalized by CFTC. In some cases, that would result in very large increases from current levels. For example, the all-months-combined limit for corn would increase from 33,000 contracts to 57,800; CBOT wheat would increase from 12,000 contracts to 19,300; and soybeans would increase from 15,000 contracts to 27,300. Other commodities like soybean meal and oil also would see very large increases. 

The CME Group notice detailing proposed increases can be viewed here. The NGFA’s Risk Management Committee will review the proposed increases and provide appropriate feedback to CME and CFTC.